Second Time's A Charm? Governor Cuomo Introduces New Legislation To Regulate Adult-Use Cannabis In New York State

To help close New York's $6 billion budget gap, Governor Andrew Cuomo introduced legislation that would legalize adult-use cannabis within the state as part of his proposed budget for fiscal year 2021, anticipating that tax revenue could bring in hundreds of millions of dollars over the next several years. Since the New York State Legislature must approve the budget by April, New York could see adult-use cannabis become a reality within the next few months.

The revamped Cannabis Regulation and Taxation Act (CRTA) includes new social justice initiatives to help those communities disproportionally affected by the drug war, allows for on-site cannabis consumption, and creates a three-tiered licensing scheme similar to New York's Alcoholic Beverage Control Law. The Act would create a centralized Office of Cannabis Management to oversee the state's medical marijuana program, adult-use program and hemp program. Led by an executive director, the Office of Cannabis Management also would include a "cannabis control board" comprising five board members appointed by the governor. Among a slew of delegated tasks, the board would be charged with approving social and economic equity plans, approving the type and number of licenses, creating new licenses and promulgating rules for the cannabis regime.

The executive director would have the authority to limit the number, scope and availability of licenses and permits to be issued for cannabis-related activities. In addition, the executive director would be required to appoint a deputy director for health and safety and a deputy director for social and economic equity.

Adult-Use Cannabis

In legalizing recreational cannabis for adults 21 years of age and older, CRTA creates six license categories:

Cultivator license Processor license Cooperative license Distributor license Retail dispensary license On-site consumption license. Like New York's Alcoholic Beverage Control Law, CRTA prohibits vertical integration, banning overlapping ownership interest across multiple license categories. For example, persons or entities holding a cultivator license are prohibited from holding a retail dispensary license and cannot have any direct or indirect interest in one.

Cultivator licensees are permitted to plant, grow, clone, harvest, dry, cure, grade and trim adult-use cannabis. Licensees also can obtain one processor's license and one distributor's license.

Processor licensees are permitted to blend, extract, infuse...