New York legalized adult-use marijuana in March and the state estimates the taxation of legalized marijuana to bring in $350 million in annual revenue. The new recreational marijuana program is expected to create between 30,000 to 60,0000 jobs in the state. But some community activists and non-profits are concerned that the licensing of cannabis businesses could be inequitable like other states that legalized recreational marijuana. The Crain’s Business Forum: A Fair Rollout for Recreational Marijuana will explain how New York can preserve equity in the licensing of cannabis businesses. The virtual event begins at 4 pm on Wednesday, December 15th.
Panelists:
Tremaine Wright – Chair of New York Cannabis Control Board, a state regulatory body that monitors recreational and medical marijuana. Wright is a former Brooklyn assemblywoman.
Melissa Moore – Director of Civil Systems Reform at the Drug Policy Alliance, a nonprofit that advocates for sensible drug laws. The nonprofit advocates for the legalization of cannabis and sensible drug laws. Moore led the Drug Policy Alliance’s Start SMART campaign that pushed to end the prohibition of marijuana.
Tunisha W. Walker-Miller – Principal at Capalino, an urban strategy and government relations firm. In 2015, Walker-Miller launched the Minority and Women-Owned Business Enterprise (MWBE) Consulting Group for Capalino to help those business owners secure government contracts.
Here’s what you need to know about New York’s recreational cannabis program ahead of the panel on Wednesday:
What’s in the recreational marijuana program?
The bill will administer a new licensing and taxation system that will allow the sale and use of marijuana to those over the age of 21. It also expanded the state’s medical marijuana industry, which was first legalized in 2016. The state will levy a 9% tax and the locality will administer an additional 4% tax that would be split 25% to 75% between counties and municipalities.
In addition, the legislation will expunge past records and create automatic resentencing for those convicted of marijuna-related offenses.
When will the program roll out?
Business licenses are expected to be granted in late 2022. The state will first release its regulations for public comment and then will open applications for licenses after the public weighs in. Critics said that former Governor Andrew Cuomo stalled the rollout process. However, Gov. Kathy Hochul sped up the process and nominated a state regulator, Tremaine Wright, after a week in office.
How does the state plan to invest tax revenue from marijuana sales?
The state plans to invest 40% of cannabis tax revenue to school aid, 40% to community grants reinvestment fund that will offer social equity grants and 20% of funds to drug treatment and public education spending.
What is the Cannabis Control Board?
The five-member Cannabis Control Board (CCB) is a newly formed state body that will regulate the cannabis industry by issuing applications and licenses to businesses and approving the industry’s rules and regulations. Former Brooklyn Assemblywoman Tremaine Wright is the chair of the board. The board will oversee the Office of Cannabis Management, the agency overseeing the day-to-day operations of the cannabis industry. Chris Alexander, a former policy staffer at the Drug Policy Alliance, a nonprofit that advocates for the legalization of cannabis, was appointed as the executive director of the Office of Cannabis Management.
How does the state plan to ensure equity in licensing?
The state will offer social equity grants to communities previously harmed by prohibition, which will be funded by 40% of the cannabis tax revenue. A recent New York Medical Cannabis Industry Association found that only 4.3% of cannabis businesses founders are Black and only 6.7% are Latino.
Community advocates and nonprofits in New York are pushing to ensure a smooth and equitable rollout of the cannabis businesses licenses and grants. Social equity programs in other legalized states like California and Illinois have faltered in the rollout of their social equity programs. Los Angeles and Long Beach have issued relatively few licenses due to poor relationships with outside investors and unequal business partnerships. Social equity funding in Illinois has been stalled by poor regulatory measures that have confused the oversight process of that state’s lottery system.
Who’s already in the space?
Even though New York legalized medical marijuana in 2016, only 10 firms are permitted to sell. Medical marijuana giant, Columbia Care, which is publicly traded, is among the few businesses with a medical marijuana license. It currently operates dispensaries in 16 states and has a market capitalization of about $1 billion. Other large, multi-state private companies like PharmaCann and Vireo Health are also among the few licensed dispensaries in the state.
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