Calling it the “ultimate hot button issue of the year,” a representative of the New York State Department of State said the legalization of the sale and growing of cannabis could have a profound impact upon farming communities such as those in Genesee County.
Paula Gilbert (photo at right), local government specialist with the Division of Local Government Services in Albany, advised that the Marijuana Regulation & Taxation Act signed into law by Gov. Andrew Cuomo on March 31 paves the way to an estimated $1 billion industry with expected annual revenue of $350 million and the creation of between 30,000 and 60,000 jobs.
Gilbert imparted her knowledge of the new law earlier this month during a Hot Button Land Uses training webinar for municipal planning department personnel.
She said the economic benefit of cannabis production and sale is “really significant especially in some places in Upstate New York where we have distressed farmers that are really struggling today.”
“It’s not just selling these (products) in your community but there’s also going to be the whole pipeline of production and labeling and creating packaging,” she offered. “So, there’s a lot of opportunity for a lot of communities to get into the door.”
Farm owners in Genesee and other rural counties are leasing land to solar companies, reaping the rewards from lucrative contracts in that industry, and Gilbert is of the opinion that they will do the same for the growing of marijuana plants.
The legislation permits adult use of cannabis for those 21 years of age and up – people who may possess, display, purchase, obtain or transport up to 3 ounces of flower or 24 grams of concentrated cannabis.
It also expands New York’s existing medical marijuana program and immediately allows eligible users to smoke cannabis in public wherever tobacco is allowed.
Gilbert said that consumption is not allowed in schools, federal lands, workplaces or in vehicles as the federal government still has jurisdiction in those places.
She explained that there are two types of retail sites:
- Retail dispensaries, which could be storefronts to buy products for home consumption and adult use consumption sites, such as those in Massachusetts, California and Colorado;
- Lounge-like locations for purchase and use on-site.
Cannabis home delivery is planned for the future, she said, resulting in Door-Dash-type services.
Gilbert said the state is establishing the Office of Cannabis Management & Marijuana Control Board, which will have an executive director and will be housed inside the New York State Liquor Authority.
The office will implement regulations for production, licensing, retail, packaging, labeling and use, with the first sales not expected until 2022 or early 2023.
Following are other aspects of the law shared during the webinar:
FOCUS ON DIVERSITY
Gilbert said the state is focusing on diversity – a 50-percent goal for minority or women-owned enterprises, distressed farms, disabled veterans – and small-scale production.
She said the strategy is different from other states in that New York is hoping to prevent large corporations and industries from controlling the market.
A person or company is prohibited from owning a growing facility and a dispensary, except for micro-enterprises, she said. A micro-enterprise can be defined as someone who owns all methods of production and only sells what is grown on-site.
In the future, home growing for adults will be limited to three mature and three immature plants, with a maximum of 12 plants per household.
SALES AND EXCISE TAXES
Gilbert said that sales tax on cannabis will be 13 percent, with 9 percent going to the state, 3 percent to the host municipality and 1 percent to the county.
Additionally, a THC (tetrahydrocannabinol) excise tax will be imposed.
“The heavier the product, the more tax there is to it,” she said, outlining taxes of a half-cent per milligram of flower, eight-tenths of a cents per milligram of concentrated cannabis and 3 cents per milligram of edible cannabis or “higher-powered” products.
“Hopefully some of those tax dollars will go to help people who become addicted – that is also part of it,” she added. A portion of the state’s share of revenues will be used for addiction treatment options.
LOCAL REGULATION
Municipalities have until Dec. 31 to opt out of any dispensary or on-site consumption site within their jurisdiction.
“However,” Gilbert said, “if you do opt out of this, it is something that can be challenged by a permissive referendum by the voters. If you’re a little nervous about this and you’re not sure if you want this in your community, you have to think about what you’re going to do.”
She said that because the regulations have yet to be finalized, she advises community leaders to take a wait-and-see approach.
“Once we get an idea from the Office of Cannabis Management & Marijuana Control Board, a lot of the questions will start to answer themselves,” she said.
If a community decides to opt out, it would lose the opportunity for the tax revenue. It would, however, have a chance to opt back in should legislative or public sentiment change.
In any event, municipalities cannot opt out of growing, testing or packaging facilities, and may not prohibit personal cannabis use in homes, she said.
CRIMINAL RECORD EXPUNGING
Gilbert said the law also calls for expunging previous convictions related to cannabis, which is now considered legal, and said the state will take the prerogative in clearing the records of previous offenders to a point.
Not everyone is going to have their record expunged as the conviction reversal is based on the level that cannabis is allowed today, she said.
If the conviction involved a quantity greater than what is allowed under the new law, that criminal record would not be expunged.
“For the kid in high school caught with a small amount – it could undo that,” she said.
ADDITIONAL TOPICS
- Individual cannabis growers will be allowed to grow plants outside, but most will be done in greenhouses since “they’re finicky plants anyway,” she said.
Growing for personal use will not happen until 18 months after the first retail store makes a sale.
- Establishments that serve alcohol likely won’t be licensed to sell cannabis.
“They’re still trying to figure out how to tell if people are under the influence (of marijuana),” she said.
- Chances are that medical cannabis dispensaries will be converted into retail sites.
“Yes, we’ve seen that in Massachusetts as well,” she said. “Because there is a pretty large medical cannabis industry in New York, it’s likely certain products (will be sold) for medical users and others for personal use.”
For more information, go to www.cannabis.ny.gov.
