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Q&A: What are the implications of legalized marijuana in New York?

As New York hammers out regulations for recreational cannabis use, the state wrapped up last week a series of regional roundtables addressing local concerns about the drug. 

Cannabis Control Chair Tremaine Wright explained the Marijuana Regulation and Taxation Act at a virtual meeting targeted toward Long Islanders on Feb. 17, fielding questions after a 30-minute presentation.

“With legalization New York shifted from a cannabis policy that was centered on law enforcement and persecution to a policy that’s centered on public health,” Ms. Wright said. “New York State’s cannabis policy is now grounded in the principles of keeping New Yorkers safe and healthy, as well as economic and social justice.”

As recently as last Tuesday, Gov. Kathy Hochul signed legislation creating a new cultivator license for New York hemp farmers to apply for and grow cannabis in 2022. According to a state press release, applicants must meet several requirements for the limited license. 

Riverhead will allow marijuana dispensaries and on-site consumption lounges in town for adults 21 and over, while Southold Town and Greenport Village both opted out of allowing sales and consumption within municipal boundaries. Localities can opt in later, but may never opt back out. 

Times Review has included some of last week’s conversation led by Ms. Wright below.

Editor’s note: This speech was edited for length and clarity. Questions were written to frame excerpts from Ms. Wright’s presentation.

Q: How will cannabis products be taxed?

A: Under the MRTA, an excise tax will be paid on cannabis products sold from wholesalers to retailers. This tax is based on the level of THC in the cannabis product. While the excise tax will vary by product type, overall, the higher the THC, the higher the tax. [THC is the psychoactive component in cannabis that can make people high.] This is similar to the excise tax that we currently use in the alcohol industry, where the higher the alcohol content, the higher the tax paid. Then we have a sales tax that is applied whenever a retailer sells any cannabis product to the consumer. These taxes combined are used to cover the cost of OCM’s [Office of Cannabis Management] operations, law enforcement training, and programs supporting equity applicants. After those costs, 40% of the remaining tax revenue goes to supporting schools across New York State. Forty percent will be reinvested in communities most hurt by the disproportionate policing when cannabis was illegal. And the remaining 20% will support drug treatment programs and public education programs. 

Q: My town opted out. What does that mean?

A: The MRTA gave cities, towns and villages control over whether or not they would host retail dispensaries and on site consumption lounges where cannabis can be consumed. The deadline for communities to opt out of sales was December 31, 2021. However, those communities that opted out are not locked out of the opportunities the industry will deliver. They can always opt back in. Keep in mind that no city, town or village can opt out of legal cannabis. Cannabis is legal for those aged 21 years and over across New York. 

Q: How will the new cannabis law deliver social and economic justice? 

A: The law sets the goal of working to undo the harms caused by the disproportionate policing and mass incarceration of Black and brown communities during the decades when cannabis was illegal. We call this period prohibition and we know it was devastating to our communities of color. For example, in 2020, the last full year before the MRTA was passed, 90% of those arrested in New York City on marijuana charges were people of color. Since the passage of the MRTA, we’ve begun taking steps to right the wrongs of the past and the number of arrests for cannabis have been dramatically reduced. We’ve also been expunging cannabis arrests and convictions. This means erasing or removing cannabis arrests and convictions from an individual’s criminal record. The state has already made great progress on expunging nearly 400,000 marijuana arrests and convictions. MRTA sets a goal of delivering 50% of licenses in the adult use cannabis market to what it calls social and economic equity applicants. Under the law, social and economic equity applicants include minority and women owned businesses, service disabled veteran owned businesses and distressed farmers. It also includes individuals who come from the communities most impacted by over policing during cannabis prohibition. Under the MRTA, priority is specifically given to those individuals who were arrested or convicted of cannabis charges and their immediate families. 

Q: How will the state support new cannabis businesses?

A: We’re creating a holistic system to support businesses and individuals through the entire process. We will start with technical assistance for our new cannabis businesses and we’ll continue with business development support as they grow. Our governor took a huge step in her State of the State with the announcement of a $200 million public private fund that will provide capital funding to equity entrepreneurs. The MRTA generally structured the adult use market across two tiers and provides for nine license types. It’s designed to create a variety of ways to enter the New York cannabis market and to keep it competitive. The Cannabis Control Board is responsible for approving regulations and application requirements. The regulations, which we will produce later this year, will further define what applicants need to apply. We expect these regulations to become available as soon as the next couple of months.

Q: How will cannabis production be regulated? 

A: We officially launched the cannabinoid hemp program in New York State. Through this program, we set clear standards for manufacturing, packaging, labeling, and testing of CBD products that are all grounded in public health best practices. These standards ensure that New Yorkers are buying safe products and provide the industry with the tools it needs to compete in the fast growing international CBD market. In December, the board released additional regulations. This included the creation of a CBD craft license, as well as establishing a new license type for cannabinoid hemp farm processors.

Q: When can I apply to sell cannabis products? 

A: We’re already accepting applications for CBD businesses. Whether you’re processing, distributing or selling topicals, tinctures, pills, capsules, food or beverages infused with CBD, you must apply for a cannabinoid license. Our cannabinoid hemp retail license is only $300 and you can apply for it through our website at cannabis.ny.gov. 

Q: How will New York protect children from underage cannabis use?

A: The MRTA makes cannabis legal to use only for adults 21 years old and over. It also requires that packaging and labeling be designed so that it does not appeal to children and teens, and it aims to keep both sales and advertising away from schools or religious institutions. 

Q: Are there regulations on driving while impaired by cannabis?

A: It’s illegal to drive while impaired by cannabis or to use it while driving. It’s also illegal for your passengers to use it while you’re driving. If you drive high, you run the risk of hurting others, as well as getting arrested under charge similar to a DUI called driving while ability impaired by drugs. Under the MRTA, we will be investing in education campaigns to make sure New Yorkers know that driving while impaired by cannabis is illegal and dangerous. Investments will also be made to increase the number of police officers trained as drug recognition experts. Drug recognition experts complete a rigorous training to use field testing techniques to tell if a driver is operating a vehicle while under the influence, to rule out medical conditions that may cause erratic driving and to classify the category substances an individual is impaired by. In addition to getting more safety officers on the road, the OCM will release reports on the impact of cannabis legalization on road safety, as well as studies on new devices to detect when someone is impaired by cannabis.

Q: I know someone selling cannabis in New York already, who says they’re operating in a “legal gray area.” What does that mean? 

A: Currently, there are no legal adult sales in New York unless they are through one of our medical program dispensaries. We are building out the legal market but it’s not operational. We’ve read the same stories as you in the press about pop up dispensaries claiming to be operating in the legal gray area. They often claim that they’re providing a service and they’re offering the cannabis as a gift. They’re calling this activity gifting. But I want to be clear, it’s illegal. There are no gray areas in the law. Worse, these operators are selling products that you may think have been tested and are quality assured. However, nothing could be further from the truth. And we hope you will protect yourself from potential harm and not participate in these sales.

Q: When will there be legal marijuana sales in New York? 

A: While we want to get the market up and running as quickly as possible, it’s really critical that we take the time necessary to get it right. And that means making sure we’re building a new industry that protects health and safety and delivers on our goals for equity and inclusivity. So we’re examining the timeline closely. Our community outreach is underway with these cannabis conversations. And we’re also building partnerships that we need to properly support future entrepreneurs. And at the same time, we’re also preparing the adult use regulations. We expect we will start seeing these regulations for adult use cannabis businesses in the late winter, early spring. Regulations will provide a first look at what applicants need in order to apply. Once we release the regulations for the adult use program, there will be a 60 day period for public comment. Then comments will be reviewed, and regulations amended as necessary. Thereafter we will be in a position to begin accepting applications.

The Office of Cannabis Management said it would post a full regional conversation online, along with slides used during Ms. Wright’s presentation. Anyone interested in learning more about the state’s cannabis program may visit www.cannabis.ny.gov and sign up for updates at OCM’s website, or follow the agency on Twitter @NYS_cannabis.

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