New York state’s marijuana legalization plans aim to rectify the War on Drugs

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Legislators in New York state unveiled plans to permit the opening of the first recreational marijuana retailers by the end of the year. New York is expected to become the largest market that is intentionally designed to support the communities most affected by the war on drugs, according to New York Gov. Hochul’s office.

Hochul tapped Chris Alexander to lead the New York State Office of Cannabis Management, which is responsible for creating and implementing cannabis regulation. Alexander, a Syracuse University alumnus, is working to put New York on a different path from other states that have legalized the sale of marijuana.

The Seeding Opportunity Initiative — announced by Hochul on March 10 — plans to make people previously convicted of marijuana-related offenses a priority when granting retail licenses to sell the drug.

“We are now on the path to doing what no state has done before — put our farmers and equity entrepreneurs, not big, out of state businesses, at the forefront of the launch of our adult-use cannabis market,” Alexander said in the March 10 press release.

The state plan also said it prioritizes businesses owned by racial minorities, women, distressed farmers and service-disabled veterans. New York considers these groups equity entrepreneurs, collectively.

Though, there has been criticism regarding the state’s plan due to the many requirements to receive a license, according to reporting from The City.

Licensees will have to prove that they have owned a legal and profitable business previously as well as provide two years of financial statements, according to the report. There is also a $2,000 non-refundable application fee.

The state intends to allocate 50% of adult-use cannabis licenses to equity entrepreneurs, although there is no mandate that explicitly requires that to happen.

Communities that are disproportionately affected by historical drug policies will receive 40% of cannabis tax revenues, according to the New York State Office of Cannabis Management. The 40% will be funneled into the Community Grants Reinvestment Fund, a state fund that will go to local organizations.

Examples of eligible grant recipients include entities that support job placement and provide substance use disorder treatments, nutritional services, childcare and financial literacy programs in disadvantaged communities under the Marihuana Regulation and Taxation Act.

“I’ve never encountered anything in my governmental career that’s been so mishandled,” said Patrick Hogan, a common councilor representing Syracuse’s 2nd district.

New York state will prioritize retail licenses for equity entrepreneurs.
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Approximately 50% of all municipalities within the state opted out of recreational sales late last year according to the Rockefeller Institute of Government. “We’re not getting any guidance from the state,” Hogan said.

Local reports have shown hundreds gathering at illegal markets in the Syracuse area.

“It is a total mess,” said Hogan. “People are selling marijuana in pop-up places that are like buildings that are sometimes not suited for any kind of venues at all.”

“I just don’t want to see anybody get hurt … because they know it’s all cash,” Hogan said.

New York is also one of the only states that will tax marijuana based on the concentration of THC, a psychoactive compound found in many cannabis products, according to the Centers for Disease Control and Prevention. Most states currently tax marijuana based on weight, according to the Urban Institute.

“What federal legalization means is that there will be another tax on top of a product right now,” said Charles Messina, a cannabis partner at Genova Burns, a law firm that specializes in cannabis law.

The MORE Act, which would decriminalize cannabis on the federal level, passed the House of Representatives in early April. Messina said the bill passing the Senate would contribute to removing the stigma surrounding the industry.

“That would be huge in terms of removing the stigma,” Messina said of the bill passing the Senate as well.

State cannabis regulators have not moved nearly as fast as their counterparts in New Jersey, where retail marijuana sales begin on Thursday. New York legalized cannabis a month after New Jersey, but sales are expected to begin in New York state in the late summer, according to Hochul’s office.