Against the backdrop of a reignited push to legalize cannabis in the state, the New York State Bar Association held its annual Cannabis Law Committee meeting on Wednesday.
Norman Birenbaum, president of the Cannabis Regulators Association (CANNRA), and director of cannabis programs for New York, gave an overview of CANNRA’s priorities and how they might factor into efforts to legalize in the Northeast, including in New York. Axel Bernabe, assistant counsel for health to Governor Andrew Cuomo, joined Birenbaum to lay out the landscape in New York.
Bernabe, who has been working for Cuomo for five years, said that he wants to see a handful of priorities over the finish line, including Cuomo’s cannabis legalization proposal, the Cannabis Regulation and Taxation Act, “which we’ve all put a lot of sweat and tears and even a little blood into over the last few years.”
“We’re really looking forward to getting it done this year, and, hopefully, knock on wood, no more crises,” Bernabe said. “Boy, are there a lot of interests in New York when it comes to this.”
This year marks the third time that Cuomo is trying to legalize through the budget process. In previous years, negotiations fell apart before the deadline, in part because of disagreements over equity provisions. Specifically, Cuomo wanted cannabis revenue to go into the general fund, while key lawmakers wanted some of it earmarked for equity. As Cannabis Wire recently reported, while Cuomo is pitching legalization as a revenue driver, key lawmakers are skeptical that legal cannabis will do much to bridge the $15 billion budget gap, and their priority is ensuring adequate revenue goes toward equity. In a departure from past proposals, Cuomo’s new legalization plan does put money toward equity, and it remains to be seen whether lawmakers feel it is enough.
“The biggest innovation, really, was the commitment to put down, following California’s model, a significant investment into disproportionately impacted communities with the fund that we created, the social equity fund,” Bernabe said. “It’s a significant piece of the revenue that’s being reinvested to try to repair some of the effects of a really wrongheaded war on drugs.”
Elliot Choi, counsel at Vicente Sederberg, and moderator of the panel, asked about CRTA, the absence of home grow provisions—which were included for medical cannabis patients but not adult use patients in past versions—delivery, and on-site consumption spaces.
“When you look at what comes out of home grow, you know, the products themselves are not tested. The environments in which they’re grown can often be very, very dangerous,” Birenbaum said. He shared some of his experiences as the regulator of the medical cannabis program in Rhode Island, where home cultivation was permitted.
“We saw a lot of undesirable effects of that. We saw fires, we saw criminal activity. We saw a product that was just completely overrun with pesticides. We saw explosions, deaths, because then people were processing the product. So our preference is that people can access this product in the variety they need at an affordable price through a licensed entity where everything is tested for public health and public safety,” Birenbaum said.
When it comes to delivery and on-site consumption licenses, for which there is great interest in New York, Birenbaum said that they’re not trying to “foreclose options” on any license types.
“The most important thing to keep in mind is that we’re trying to keep this bill to a manageable size … we’re not prohibiting any type of license. Quite to the contrary, the bill makes it clear that the board can create license types and permit types,” Birenbaum said. “As we started to update and modernize that language, we just realized that it just wasn’t the right place to put it,” Birenbaum said, referencing Cuomo’s legalization proposal. “It was going to create a whole bunch of drag in terms of negotiations to get the language right, and then pigeonhole us with a particular avenue and a particular way of doing things.”
New York City, in particular, has a strong “legacy market,” he said, or, in other words, unregulated and unlicensed cannabis activity, mostly in the form of home delivery operations. Choi asked Birenbaum how those unregulated operators will fit into the legal system.
“This is something that we’ve given a lot of thought to,” Birenbaum said. “We understand that we need to make sure that those operators have access to the regulated industry. But also we need those customers,” he continued, adding, “If we can’t absorb those customers and make sure that they have access to regulated consumer products, we’re not serving the core mission, which is to make sure that public health and safety comes first.”
Birenbaum was asked about the potential timeline for legal sales in New York, after a bill is passed and signed into law. As consumers saw in New Jersey, while legal sales were promised soon after voters approved adult use at the ballot box in November, it’s taken more time, in part because of disagreements between lawmakers and the governor, and in part because, if sales opened up right away, supply would be wiped out, including for existing medical patients. The back of the napkin estimate in New York is 12-18 months after signature, Birenbaum said.
“Arizona is at breakneck speed right now and it’s wonderful and we’re all jealous of that. But I don’t think people should expect that,” Birenbaum said, referencing Arizona’s swift path to legal sales last week, after voters passed their initiative in November, as Cannabis Wire reported.
The conversation turned to CANNRA, which was formally created late last year, and was born out of informal meetings between regulators in Colorado, Oregon, Alaska and Washington State as far back as five years ago, when they were “grappling” with how to implement adult use cannabis industries in each of their states. So, about every six months, this group would meet in-person to talk about how to “tackle” different cannabis policy-related issues that arose. The cohort swelled from seven or eight regulators, to roughly 25, with Canadian cannabis regulators joining, too. Now, subject matter experts and officials from various federal agencies have joined, too, to provide “some perspective from behind the curtain,” Birenbaum said.
“We’re trying to be really unbiased. No, we’re not the Kevin Sabets of the world. We’re not the NORMLs or MPPs of the world,” Birenbaum said, referencing legalization opponents and proponents. “We’re just trying to let people know exactly what we have experienced and, based on those experiences, different options that exist.”
Choi asked if CANNRA sees themselves working more closely with the cannabis industry, because lawyers and other industry members “would love to have a seat at the table.”
“We absolutely anticipate working with industry and non-regulated third parties. It’s essential. I mean, industry and third parties are the ones that have been crafting the majority of these pieces of legislation,” Birenbaum said, adding that after the “first wave” of cannabis legalization in states by ballot box, legalization debates are now increasingly happening by legislature.
“The industry is still very new. There’s a lot of lobbying happening, a lot of advocacy happening. And we’re now in this new era of regulators crafting statutes and crafting regulations at the forefront now that, you know, we’re not necessarily beholden to the ballot initiative in order to get progress on this issue,” Birenbaum said, adding that there is an opportunity now for “more nuanced and thoughtful approaches,” as long as there’s some “security,” particularly when it comes to “enforcement issues and emerging trends that we’re seeing that are outside the original scope and intent of the law.”
Bernabe said that the “highlight” of his participation in CANNRA so far was when, in Maryland, regulators heard from James Cole, the author of the so-called Cole Memo issued under former President Barack Obama’s Department of Justice. The memo, which offered a hands-off enforcement approach to state-legal cannabis, so long as states kept cannabis out of the hands of kids and from crossing state lines, among other priorities, was rescinded by former Attorney General Jeff Sessions. “That was pretty cool. You get a lot of history. You get so much perspective on what folks have gone through.”
Eventually, Bernabe said, CANNRA’s likely going to turn to regional groups to work together to “create community structures,” though “we already have that sort of regional communication when the governor pulled everybody together.”
Cuomo hosted the Regional Cannabis Regulation and Vaping Summit in October 2019, which brought together governors, lawmakers, and regulators from New York, Connecticut, New Jersey, Pennsylvania, Rhode Island, Massachusetts, and Colorado to debate cannabis policies, from legalization to vaping.
“It’s about time that the regulators start to communicate and share where they’re at, because right now, what we hear from industry more than anything else, is that it’s really complicated to be able to deal with all the different regulatory frameworks in every state. So to the extent that that makes it smoother and also easier for regulators, I think it’s a win-win across the board,” Bernabe said.