When it comes to adult use cannabis legalization, the tug of war between New York Governor Andrew Cuomo and lawmakers is well underway.
In recent years, legalization proposals have not made it over the finish line due to disagreements over the details, specifically when it comes to tax revenue allocation and equity. Last month, both sides released their respective plans: Cuomo by budget, and Senator Liz Krueger and Majority Leader Crystal Peoples-Stokes by bill. While Cuomo’s legalization-by-budget proposal, his third in as many years, moved toward lawmakers’ priorities, significant differences remained.
“We have seen the governor’s proposal for the third time,” Peoples-Stokes said earlier this month. “OK, now let us put our proposal out there, get it passed by the legislature, and then we’ll begin to negotiate with the governor. Clearly, his tax proposals are all wrong. Clearly, his social equity proposals are all wrong. So there are a number of things that need to be fixed. And if they’re not fixed, then we’ll be here next year trying to do the same thing.”
Now, Cuomo announced that he revised his budget proposal. While the legislation has yet to be released, his office shared details on Tuesday. In previewing the revisions Monday, Cuomo made it clear that he wants legalization done by budget, countering lawmakers’ push for their legalization bill. (The budget deadline is April 1; the legislative session ends in June.)
“It is a controversial topic. It’s a controversial and a difficult vote. I get it. I believe if we don’t have it done by the budget, we’re not going to get it done,” he said during a press briefing Monday. “And I think it would be a failing if we don’t get it done this year. And I think that would be a mistake. So we’re sending a new bill that reflects the conversations we’ve had. But I’m hopeful that we can come to an agreement and we can get it done. But I believe, because I’ve seen this movie before, if we don’t get it done by April 1, we won’t get it done.”
The revisions laid out on Tuesday fall into three buckets: more specificity around how the cannabis tax revenue earmarked for social equity will be allocated; explicitly allowing delivery licenses; and more leniency around criminal penalties.
Cuomo’s budget puts revenue generated from THC taxes, retail surcharges, and fees toward “social equity purposes” as follows: in fiscal year 2023, the first $10 million; the following year, the first $20 million; in fiscal year 2025, first $30 million; in fiscal year 2026, the first $40 million; and in every year thereafter, the first $50 million.
The revisions specify that, through a “cannabis social equity fund” created by these revenues, “qualified community-based nonprofit organizations and local governments would apply for funding to support a number of different community revitalization efforts,” such as job placement, housing, “services to address adverse childhood experiences,” and “legal services to address barriers to reentry,” among other efforts.
Further, “under the amended proposal, the Department of State would allocate the funding, through grants administered by Empire State Development Corporation, in collaboration with the departments of Labor and Health, as well as with the Division of Housing and Community Renewal, and the offices of Addiction Services and Supports and Children and Family Services.” Though, final approval will come from the Division of the Budget.
Cuomo’s budget plan announced in January did not explicitly allow for delivery licenses, but it did leave the door open for additional license types to be created. The revision specifically includes delivery licenses and does so through the lens of equity, as “delivery services offer a low-cost entry point into the industry.” Still, localities could opt out of allowing delivery “within their jurisdiction.” (While it’s unclear whether Cuomo will reserve this license type for equity applicants for some period of time, that is the approach taken in neighboring Massachusetts.)
And, finally, as introduced in January, Cuomo’s budget expanded criminal penalties. For example, while it is currently a misdemeanor to sell cannabis to someone under 21, Cuomo’s plan would’ve made it a felony. The revision pulls back on this, making it a class A misdemeanor, among other penalty reductions.
Also noteworthy is the emphasis, throughout the revision announcement, on “social and economic equity” as “the bedrock” of Cuomo’s legalization plan, considering lawmakers were particularly vocal earlier this month about how Cuomo’s emphasis on legalization as a means of raising revenue is wrong.
“I am glad to see that the Governor is indicating a willingness to adjust his approach on marijuana legalization. The legislative language is where the rubber meets the road, and none has been shared yet, so I can’t make an assessment of this most recent proposal,” Sen. Krueger told Cannabis Wire.
“But my priorities remain what they have always been: legalizing, taxing, and regulating adult-use marijuana in a way that ensures sufficient resources are directed to those communities that have been hardest hit by the failed policies of the so-called ‘War on Drugs.’ This is the year to get the job done and to get it done right.”
Majority Leader Peoples-Stokes, who is pushing the Marijuana Regulation & Taxation Act alongside Sen. Krueger, echoed Krueger’s sentiments.
“I’m pleased to see the Governor’s 30-day amendments moving in the right direction towards stronger community reinvestment, more sensible criminal penalties, and a cannabis delivery option. It’s promising, but we still have a ways to go. My staff and I are in the process of reviewing the Governor’s amended language, as the true impact is always in the details,” Peoples-Stokes told Cannabis Wire.
“We have one opportunity to get this right and it’s vital that we do. I look forward to continuing to work with the Governor and the Senate to legalize cannabis with the most equitable and comprehensive bill possible for all New Yorkers.”
Editor’s note: This story was updated to include comment from lawmakers.
