New York Governor Reveals 30-Day Amendments for Cannabis Industry

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This week, Governor Andrew M. Cuomo announced 30-day amendments to the Governor’s proposal to establish a comprehensive adult-use cannabis program in New York

“As we work to reimagine, rebuild and reopen New York, we’re taking every opportunity to address and correct decades of institutional wrongs to build back better than ever before,” Governor Cuomo said. “We know that you cannot overcome a problem without first admitting there is one. Our comprehensive approach to legalizing and regulating the adult-use cannabis market provides the opportunity to generate much-needed revenue. Still, it also enables us to directly support the communities most impacted by the war on drugs by creating equity and jobs at every level, in every community. In our great state.”

Allocation of $100 Million Cannabis Social Equity Fund

Social and economic equity are the bedrock of Governor Cuomo’s proposal to legalize cannabis for adult-use. Additionally, the Governor’s proposal includes a $100 million fund to revitalize communities. Specifically, communities that the war on drugs has most harmed.

Through this fund, qualified community-based nonprofit organizations and local governments would apply for funding to support several various community revitalization efforts, including, but not limited to:

  • Job placement and skills services,
  • Adult education,
  • Mental health treatment,
  • Substance use disorder treatment,
  • Housing,
  • Financial literacy,
  • Community banking,
  • Nutrition services,
  • Services to address adverse childhood experiences,
  • Afterschool and child care services, system navigation services,
  • Legal assistance to address barriers to reentry, and
  • Linkages to medical care, women’s health services, and other community-based supportive services

The grants may also go towards supporting the social and economic equity program further.

Under the amended proposal, the Department of State would allocate the funding, through grants administered by Empire State Development Corporation, in collaboration with the departments of Labor and Health, as well as with the Division of Housing and Community Renewal, and the offices of Addiction Services and Supports and Children and Family Services. Final allocations and administration of funding would also be contingent upon approval from the Division of the Budget.

Enabling the Use of Delivery Services

Cannabis legalization should help rebuild New York’s economy, especially following the damaging effects of the COVID-19 pandemic. In fact, legalization could potentially create more than 60,000 new jobs.  Additionally, it will spur $3.5 billion in economic activity while generating an estimated $350 million in tax revenue once fully implemented.

Cannabis legalization can also significantly benefit distressed areas in New York, providing employment opportunities for all workforce levels. As social and economic equity are the bedrock of Governor Cuomo’s proposal, delivery services offer a low-cost entry point into the industry, particularly in communities where the war has significantly impacted drugs.

Recognizing this, the Governor is amending his proposal to allow for the permitting of delivery services to open up access to this new industry even further so more New Yorkers can participate as it grows. As part of this, local governments would have the opportunity to opt-out of delivery services within their jurisdiction.

The Criminality of Improper Sales

When establishing a new product market as the Governor’s proposal does, bad actors will inevitably attempt to skirt rules and commit fraud for their financial gain.

Cannabis, however, adds another complicating factor to this dynamic. Years of outdated policies stemming from the War on Drugs have disproportionately impacted communities of color. New York has already taken steps to decriminalize cannabis, and as this new market is realized, and criminal penalties must be thoughtfully assigned to ensure that the progress which has already been made is not inadvertently reversed.

Under the Governor’s amended proposal, here is how the specific penalties will be reduced:

  • Criminal sale in the third degree (sale to under 21 years old) will be made a class A misdemeanor.
  • Unlawful sale in the second degree (sale of over 16 ounces or 80 grams of concentrate) will be made a class E felony.
  • The first degree (sale of over 64 ounces or 320 grams of concentrate) will be made a class D felony.

The Governor’s proposal builds on years of work to understand and decriminalize cannabis for adult use. In 2018, under Governor Cuomo’s direction, the Department of Health conducted a multi-agency study that concluded that the positive impacts of legalizing adult-use cannabis far outweighed the negatives. It also found that decades of cannabis prohibition have failed to achieve public health and safety goals. This has led to unjust arrests and convictions, particularly in communities of color.

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