New York State Appears Poised to Legalize Recreational Marijuana

On January 6, 2021, Governor Cuomo announced his latest proposal for the legalization of recreational marijuana in New York. The proposal, outlined generally, consists of:

1. The legalization of the recreational use of marijuana by any individual of the age of 21 or older in the State of New York;
2. The creation of a new Office of Cannabis Management to oversee such adult-use recreational program, as well as the state’s existing medical and cannabinoid hemp programs; and
3. The creation of an equitable structure for the recreational adult-use market by offering licensing opportunities and assistance to entrepreneurs in communities of color who have been disproportionately impacted by the war on drugs.

While the specifics remain to be seen, Governor Cuomo’s proposal appears to address one of the two roadblocks that derailed past attempts at recreational-use legalization: the creation of cannabis-related jobs and the spending of cannabis-derived state revenue in minority communities.. The other roadblock, namely addressing the concerns of suburban districts wishing to “opt out,” has not yet been addressed by the Governor’s proposal.

With the amount of federal aid to New York (and other states) coming from Washington still unclear and the deficit that New York has run due to its expenditures battling COVID-19 as well as COVID-related reductions in tax revenues, Governor Cuomo has indicated that budget negotiations for this fiscal year – where marijuana legalization is likely to be debated – probably will not be settled quickly.

Yet the possibility of about $300 million in annual tax revenue, and billions more from cannabis tourism and the economic impacts of legalization, as the Governor has suggested, may be too tempting to allow any issues to torpedo legalization this time. Albany undoubtedly recognizes that the sooner there is legalization, the sooner revenue will start pouring into state coffers. And with neighboring New Jersey already having legalized recreational marijuana, the race to create the metropolitan’s area first major recreational marijuana hub already has begun.

While New York has legalized medicinal marijuana, the efforts to legalize marijuana for recreational use in the state have not been successful, although there has been some movement in that direction. For example, a couple of years ago, state law was amended to provide that possession of between one and two ounces of marijuana is a violation (subject to a fine of up to $200) rather than a Class B misdemeanor and to further provide that possession of less than an ounce of marijuana could result in a $50 fine rather than the $150 fine previously provided by state law. Another change in the law at the same time was predicted to expunge low-level marijuana convictions of about 160,000 New Yorkers.

But efforts to legalize recreational marijuana failed in 2019 and in 2020.

Although state legislators widely supported recreational marijuana legalization, they disagreed about two important issues: (1) should the historical disparate impact that the criminalization of marijuana has had on minority communities be addressed? and (2) should local communities be permitted to opt out of legalization, at least to the extent of prohibiting businesses from selling recreational marijuana within the community’s borders? The failure to resolve these issues doomed the previous legislative efforts.

Whether recreational legalization in New York occurs this year remains to be seen. However, given the large deficits New York State faces and the large state tax revenues recreational cannabis represents, the Democratic supermajority in the New York legislature, and the Governor’s recent statement in support of legislation including what appear to be efforts to address past roadblocks, legalization may have its strongest opportunity yet. Stay tuned.