Wall Street Journal March 24, 2021

ALBANY, N.Y.—After years of false starts, New York state lawmakers said Wednesday that they had reached an agreement to legalize the sale of marijuana for recreational use by adults starting next year.

State Sen. Liz Krueger said lawmakers were finalizing a bill that would create a new state regulator for cannabis products and decriminalize the possession of up to three ounces of marijuana. New Yorkers will be allowed to cultivate marijuana for personal use and the state will study a new system for determining whether drivers are inebriated because of marijuana use, she said.

The bill is set to be taken up next week by the state Assembly and Senate, lawmakers said. Gov. Andrew Cuomo, a Democrat, has proposed legalizing marijuana in the state budget that is due by next week. He put marijuana legalization into his budget proposals in 2019 and 2020, but it was taken out after disagreements with Democrats who dominate the state Assembly and Senate.

During an unrelated briefing on Wednesday, Mr. Cuomo said, “We’re close, but we’ve been close three times before.” Spokesmen for the governor didn’t immediately respond to specific questions about the bill.
Ms. Krueger, a Democrat from Manhattan who sponsors the measure, said the final legislation has evolved after input from industry stakeholders around the country.
“I think that will give us a head start on a good program, because we were able to watch what other states went through and hopefully come up with something that addresses the problems,” she said in an interview on Wednesday.

Fourteen states and three territories have legalized recreational marijuana, according to the National Conference of State Legislatures. New York would join its neighbors in an expansion of legal marijuana sales.
Massachusetts began permitting the sale of recreational marijuana in 2018, and Vermont enacted a marijuana law in 2020. In February, New Jersey Gov. Phil Murphy signed a bill legalizing and regulating cannabis use and possession, and Connecticut Gov. Ned Lamont has proposed legalizing marijuana to fund municipal aid and other measures.

New York’s bill still has opponents. Law-enforcement organizations and the New York State PTA issued a statement earlier this month saying that recreational marijuana was a “public and child health threat and sends a mixed message to young people that using recreational marijuana is acceptable.”

Many Republicans have said they would vote against the recreational use of marijuana, but they are relegated to the minority of the Senate and Assembly. Both Ms. Krueger and Assembly Majority Leader Crystal Peoples-Stokes, a Buffalo Democrat who sponsors the legislation, said they had the votes to secure passage of the bill in their respective legislative chambers.

According to legislators and other people familiar with the agreement, a new state Office of Cannabis Management will issue licenses for growing marijuana as well as its sale for recreational use by retail stores or delivery services. Localities in the state will be able to permit businesses that sell marijuana for on-premises consumption, subject to some restrictions.

Mr. Cuomo had proposed that the new Office of Cannabis Management be under his control. According to Ms. Krueger and other people familiar with the subject, under the legislation, the office would report to a five-member board on which the governor has three appointees and the Senate and Assembly may each nominate a person.

Another sticking point dealt with the distribution of revenue, which the state estimates could be around $300 million a year when the program matures. Under the legislation, the state would levy a 9% tax on retail sales and localities would levy an additional 4%. Towns, villages and cities may opt out of retail and delivery marijuana sales, according to the proposal.

After funding the operations of the Office of Cannabis Management and law-enforcement officers who are trained to detect impaired driving, 20% of remaining revenue will be dedicated to treatment and public education, 40% will be dedicated to school aid and 40% will be dedicated to a fund that will make grants for social equity.

Ms. Peoples-Stokes said this funding was crucial for rebuilding inner city neighborhoods that were impacted when residents were convicted of past marijuana sales.

“It’s important to use resources to go back and do a deep dive to look at who these people are, what’s the status of their life now and see what they need,” she said.

Both Ms. Krueger and Ms. Peoples-Stokes said the bill was structured so that people who sell or have sold marijuana illegally will have a chance to gain licenses in the regulated market.

But the bill simultaneously allows the state’s existing medical marijuana companies—whose operations must be vertically integrated, by law—to begin selling whole flower marijuana instead of only extracts. They would also be able to enter the recreational market but must maintain their medical offerings.