New York Joins Pot Party

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

New York became the fifteenth state to join the pot party when governor Andrew Cuomo signed legislation on March 31.

As The City explains:

The historic law, the culmination of drawn-out, fierce negotiations in Albany, will allow people to possess up to three ounces of pot and grow a limited amount of cannabis at home. The measure also will expunge the convictions of people whose offenses wouldn’t have been crimes under the new law.

But the law’s centerpiece is a set of social equity provisions that should pour 40% of tax revenues from legal weed sales into communities long-devastated by over-policing and offer marijuana business opportunities to traditionally underrepresented groups.

New York’s legalization applies to adults only, and anyone under the age of 21 is still prohibited from partaking of the evil weed.

So,  while you can now legally smoke pot in NY state, you cannot yet legally buy it. How’s that? Well, as New York magazine explains, that’s because it’s not yet legal to sell cannabis in the state.

The WSJ reports that it’s expected that retail sales won’t begin until 2022, as state officials need time to formulate regulations covering legal sales.

Cuomo first proposed legalizing marijuana in 2018, but previous efforts were derailed, in part over disagreements on how tax revenues should be spent. Cuomo embraced sin taxes in his latest state budget proposal, to  offset COVID-related costs, and made a renewed bid for legalization, as I wrote in January (see Cuomo Embraces New Sin Taxes to Replace Some COVID-19 Fiscal Shortfalls; Full Legalization of On-Line Betting and Adult Cannabis Use to Feature in 2021 State of the State Proposals.)

Another factor behind the move was the successful November 2000 referendum to legalize marijuana in New Jersey. Once that particular cat was out of the bag, New York would have found it difficult to enforce p anti-marijuana laws, as New Yorkers could score a stash by crossing the border.

This was a reversal of the longstanding NY/Nj divergence on the minimum drinking age.  I checked my facts with my 86-year mother, who recalled that she and her classmates at her NJ high school crossed the border to NY on her prom night, so they could drink legally. By the time I turned eighteen, NJ had dropped its legal drinking age to eighteen, but then in response to anti-drunk driving pressure, increased the age again, by one year each year, beginning as of July 1. Anyone reached the qualifying age before July 1 was grandfathered in and could continue to drink legally. I remember this situation well, because my birthday falls in June, whereas my cousin’s is three weeks later, in July. I qualified to drink legally despite the annual age increases, but she did not. Later, NY was also forced to raise its drinking age, as were other states that wished to receive federal highway funds. And so I believe the US now has a uniform minimum drinking age of twenty-one, in all parts of the country that allow for legal consumption of alcohol.

Complicated Licensing Regime

Taking pot legal in New York iwill no doubt be a lucrative proposition. The state will soon implement a complex licensing regime for retail sales. This was inevitable, given two of the rationales for the new policy – raising state tax revenues and allowing communities that suffered most  under the previous prohibition regime to have greater opportunities to profit under the new regulatory framework. Perhaps a form of reparations, as it were.

According to the City:

The Marijuana Regulation and Taxation Act (MRTA) sets a goal of giving half of all sales licenses to those who qualify as “social equity applicants.”

That includes:

  • Women-owned businesses
  • Businesses owned by people of color
  • Minority or Women Owned Business Enterprises, defined as a business in which women and/or people of color own at least 51% of the company
  • Small farm operators in financial hardship or farms operated by someone in an underrepresented demographic
  • Service-disabled veterans
  • People from areas negatively affected by past cannabis prohibition.

Jerri-Lynn here. The intention to redress past prohibitions are provisions are reinforced by the following provisions. Again, according to The City:

Applicants who fit one or more of those categories will be given additional priority if they:

  • Make 80% or less of their county’s median income. In the case of New York City, 80% of median income is $63,680.
  • Come from an area disproportionately impacted by past enforcement of cannabis laws
  • Were convicted of a marijuana-related offense before the bill was signed into law.

The City includes a further overview of measures the state intends to take to support entrepreneurs who go into the pot business. These are intended to compensate for the difficulties these businesses might face, due to continuing federal prohibitions on marijuana. In

New York State’s Urban Development Corporation will receive additional funding to provide assistance to social equity applicants — including creating a small business incubator that will dole out low- and no-interest loans to help pay for start-up costs.

“That’s the big missing piece of the puzzle that we haven’t seen in other states,” said Melissa Moore, the Drug Policy Alliance’s New York director.

“You can do priority licensing for social equity, but if there isn’t an avenue for people to be able to access capital it becomes a moot point because of federal prohibition it’s just about impossible for people to access the normal type of small business loans that would generally be available,” she added.

Nathaniel Gurien, CEO of a Manhattan-based cannabis consulting firm, told THE CITY the incubator, which will give financial advice to applicants, is crucial to the success of social equity efforts.

Gurien said the educational component could help everyday New Yorkers who may want to use existing skills to pivot to legal pot sales.

“Like in Times Square, you have all these tour bus hawkers,” said Gurien. “Some of those guys who may live in The Bronx and qualify for minority equity licenses, they can get a decent low-interest loan from one of these business development [agencies] with cannabis-related funds.”

The City includes further details on how the legislation is expected to assist underserved communities. In the interests of keeping this post to manageable length, I won’t discuss those further her, but refer interested readers to the full article.

Expungement of Past Convictions

As I wrote in my January piece, a key element of the new law is further expungement of previous marijuana convictions  There the devil is in the details, and as The City reports, some have have yet been determined:

The act is short on details and Cuomo’s press office didn’t respond to questions. But the legislation sets forth a timeline of expunging records within two years after the bill’s signing.

The new law builds on one the legislature passed in 2019. It now will provide for an expanded expungement of convictions for marijuana or concentrated cannabis offenses.

Expungement will apply not only to marijuana possession offenses, but also to some sales convictions: Per New York magazine:

And as Gothamist explains, if you were convicted of selling small amounts of weed — anything less than 25 grams — that conviction gets automatically expunged, too.

Stymie Illicit Drug Trade

Some proponents supported the legislation as a means to stymie the illicit drug trade. Per the WSJ:

State Sen. Liz Krueger, a Democrat from Manhattan who also sponsors the bill, said the law would end disparate enforcement practices that have disproportionately hurt communities of color. She said during a floor debate that the bill would reduce the illicit drug market.

“Right now, we have an enormous system of drug distribution in this state that is controlled by cartels,” she said. “To have a legalized system—which is the proposal of this legislation—ensures that the drug is safe from seed to sale.”

The Bottom Line

Proponents have many ambitions for supporting marijuana legalization in New York.  How well these will be achieved – or indeed, whether they will be achieved at all – depends on the details that state officials must still work out during the next eighteen months or so.

 

 

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14 comments

  1. bwj

    New York became the fifteenth state to join the pot party when governor Andrew Cuomo signed legislation on May 31.

    March 31?

    I’ve read that one effect can be an altered sense of time…

    Reply
  2. km

    I wonder how this may change the existing marijuana culture in NYC. I understand that recent years were The Golden Age of the Small Time Dealer in NYC. In the Five Boroughs, even if you got caught with possession, as long as you had a relatively small amount of hand and no indicia of dealing it was basically treated like a traffic ticket that you had to show up in court for.

    The problem isn’t territory or rival dealers or even customers. Everyone already has all the customers that they need or want, and if a customer gets to be a pain, just cut them off. Assuming that you have a landlord that will accept payments in cash, the problem is getting enough dope to meet demand. The dealer barely has time to open up his latest package and already his phone is ringing off the hook with customers who heard that he got a delivery and when they can stop by.

    In a way, this jives with the entire process of legalization. Beginning with legalization of medical marijuana in 1996 in California and continuing each step of the way since then, the marijuana market has been bigger than anyone predicted at the time.

    Reply
  3. Kurt Sperry

    Where I live in Washington State we legalized cannabis what feels like ages ago but was actually in 2012. We had the same awkward interval where it was legal to possess but there was no legal supply. It passed easily enough because the cops just stopped busting people for less than wholesale quantities as soon as the legal change went into effect. There are two significant differences I notice between our launch and NY’s: first the NY law allows cannabis consumption in any areas that presently allow tobacco smoking (we in WA treat it in the same puritanical and bizarrely heavily regulated way Americans treat public alcohol consumption) and NY allows personal cultivation. These are both better and more sensible than our system which I think suffered from the inevitable over-conservatism of being an early adopter.

    One thing I think we got right was a conscious effort to get existing illegal growers into the legal trade (which had the dual salutary effects of helping close down the existing black market, and taking advantage of the considerable, necessary, and not easily transferable skills required to create a high quality product. If the producing had been left to people who had never grown before, the legal product would have been so inferior in quality that the launch would have failed completely I suspect.

    It should be noted that once the change was made here there was exactly zero popular pressure to revert back to cannabis prohibition. All but a tiny fringe of reefer madness legacy nut-jobs immediately saw the wisdom and benefit of it. Nobody here wants to go back to the way it was, not even those who opposed legalization in the first place. As far as I can tell, the black market here has been wiped out which was one of the main goals of the change. Dealers I knew all moved on to other legal ways of making a living.

    The US was largely responsible for the global prohibition of cannabis and for reasons I’ve never understood the whole entire world followed us blindly into this stupidity. Now the US is coming to its senses but most the world that bought our anti-cannabis propaganda hold onto it far more tightly than we, its originators, do. When I travel back to Europe as I must, it’s like going back to the last century. Almost every EU country (with some important exceptions) is still stuck living in the crazy Reefer Madness paradigm. They are incapable of evolving or learning from our example. Places in Africa and Asia are mostly even more retrograde, they bought our anti-cannabis propaganda and not only embraced it but took it and ran further with it. The bizarre US cannabis fixation has turned into a global calamity and failure of reason.

    Reply
  4. chuck roast

    I bought a cartridge of Sativa in Massachusetts last week…70 bucks. The place is in a strip mall right off the highway. You drive in behind the structure. I guy sitting in a chair eyeballs you as you drive in. You go around the end of the structure and another guy stops you and gives you the days ‘pot menu’. You then park and go wait in line. They have several people checking ID’s with an electronic recorder. They scan the chip in your driver’s license or, in my case, my passport while you make your order on their menu. Then you go to another tent where there are several gofers standing at cash registers. You give them the menu with your choices on it and your name. No bogus names allowed, because they have already scanned your ID and prolly know you genetic code even before you get the goods. The gofer goes and gets the cartridge and comes back. It is housed in a box within a box and is nestled nicely in a small bag with the corporate imprint. Don’t even try discarding the bag or the excess packaging at the ‘facility’. You must be seen leaving with your corporate bag in hand after you have forked over the cash and gotten your receipt complete with your first name, last name and baptismal name printed at the top.

    Think it’s as simple as getting a six-pack of IPA…think again. There is, however, the satisfaction of screaming every obscenity you ever learned in any language for the next ten miles while tooling up the highway.

    At least the pusher-man was discreet.

    Reply
    1. Kurt Sperry

      I’m not even getting carded anymore here. Admittedly I’m old and look it and don’t get carded buying beer at the grocery story more than a couple of times a year either. I think it’s quite natural for the new shops to be overly zealous carding in the early phases of rolling sales out.

      Reply
    2. Pavel

      A far cry from the guys selling nickel bags in Washington Square near the (absolutely brilliant) groups of bongo and other drum players on a hot summer night in the ’80s.

      Reply
  5. NotTimothyGeithner

    said the law would end disparate enforcement practices that have disproportionately hurt communities of color

    Joe Kennedy III will be devastated.

    Reply
  6. bob

    Pot Industry to Andy Cuomo- Hey, there’s plenty of money here for everyone! We’ll cut you in on it, what to you want?

    Andy Cuomo, King of Bully’s- What do you mean you’re going to cut me in on it? How about I won’t have your legs broken? I might cut you in on it if you’re nice to me. Everything you have is because I let you have it, understand?

    Reply
  7. LowellHighlander

    I was part of a small group of activists in the Imperial Capital back in the late ’90s who collected signatures for a citizens’ initiative to repeal Prohibition – but only for medical purposes, honestly. To obtain some pot, an M.D. would have had to provide you with a “written recommendation” (for some reason, the word “prescription” had to be avoided; I think it had to do with Federal licensing, but I’m not sure). I think more than 2,2000 signatures were credited to me. (I had some help, but that help was provided in accordance with the local regulation on signature-gathering). And to this day, I’ve never had pot.

    If you want to know more, run “Initiative 59” through a search engine. But the point here is that we showed how much Congress detests democracy: Congress did everything it could to try to derail this citizens’ initiative. Even the hometown rag (i.e. the Washington Post) ran a column entitled “What’s Congress Smoking?” Hell, Congress was even afraid to let the votes be counted.

    And here we are, [effectively] bombing other peoples in the name of Democracy.

    Reply

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