New York Legalizes Recreational Marijuana Use

On Tuesday, March 30th, after hours of debate, both Houses of the State Legislature passed legislation to legalize adult-use of recreational marijuana. The following day, the Governor signed the bill, making New York the 16th State to legalize recreational marijuana. Some of the major provisions of the legislation include:

  • Establishment of the Office of Cannabis Management, which will be charged with enforcing a comprehensive regulatory framework governing medical, adult-use cannabinoid hemp. The office will include a five-member board and will be an independent office operating as part of the New York State Liquor Authority;
  • The legislation creates a two-tier licensing structure, one for producers and one for distributors, that will allow for a large range of products separating those growers and processors from also owning retail stores;
  • The legislation implements a new cannabis tax structure that replaces a weight-based tax with a tax per mg of THC at the distributor level with different rates depending on final product type. The wholesale excise tax will be moved to the retail level with a 9% state excise tax. The local tax rate will be 4% of the retail price. Counties will receive 25% of the local tax revenue and 75% will go to the municipality. All state cannabis tax revenue will be deposited in the New York State cannabis revenue fund. From that fund, revenue covers all reasonable costs to administer the program and implement the law. The remainder of the funding will be split three ways with 40% to education, 40% to the Community Grants Reinvestment Fund and 20% to the Drug Treatment and Public Education Fund;
  • In terms of personal possession and home cultivation, the legislation allows individuals over the age of 21 to possess up to 3 ounces of cannabis and 24 grams of cannabis concentrate outside of the home and up to 5 pounds of cannabis within the home, but it must be kept in a secure location away from children. The legislation also permits individuals over the age of 21 to grow up to 3 mature plants and 3 immature plants in in their home with a maximum of 6 mature plants and 6 immature plants per household. Home growth is not permitted until 18 months after the first adult-use sales begin for adult recreational use and will be subject to regulations of the Medical Program;
  • The legislation also allows for the creation of cannabis consumption sites where individuals can recreationally consume marijuana. Alcohol and tobacco use is prohibited within these sites;
  • Cities, towns and villages have the option to opt-out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses by passing a local law by December 31, 2021. However, if localities opt-out they cannot also make adult-use or possession of cannabis (so long as the amount possessed is what the law allows) illegal;
  • The legislation also expands the State’s medical marijuana program by allowing a larger list of medical conditions to access medical marijuana, increases the number of caregivers allowed per patient, and allows for home cultivation of medical cannabis for patients;

You can find a more comprehensive overview of the law in this press release from the Governor’s office:

On April 2nd, the Governor announced that the website for the Office of Cannabis Management has officially launched. You can view the OCM’s website here:

Lastly, on April 20th, our firm hosted a free webinar called “Ready, Set, Grow!” where Partners Theresa Russo and Mike Relyea, along with Associate Mia Wolfe, discussed the State’s new cannabis law, what industry needs to know about its ground rules, what is still undecided, and what prospective marijuana entrepreneurs should start doing now to succeed in this budding industry. If you’d like to watch that webinar, you can find it here (Passcode is y%r6Ra19):