On August 15, 2022, the New York Cannabis Control Board (the Board) held a public meeting via real-time stream to consider a number of agenda items. Among the most notable of the topics taken up was the approval of conditional adult use cultivator licenses and conditional adult use processor licenses.
On June 30, 2022, the New York State Cannabis Advisory Board (the “Advisory Board”) held its inaugural meeting. Axel Bernabe, the Chief of Staff and Senior Policy Officer at the New York State Office of Cannabis Management, provided some opening remarks noting that the Advisory Board has been in the making for nearly four (4) years. The Advisory Board is comprised of twenty members from the entire State of New York. Advisory Board members were each introduced and include a wide variety of background and experience, including careers such as farmers, public servants, doctors, attorneys and community leaders.
One of the primary purposes of the Advisory Board is to oversee the disbursement of the New York State Community Grants Reinvestment Fund (“Reinvestment Fund”). The Reinvestment Fund will be comprised of thirteen (13) voting members, and also ex-officio members to represent other state agencies. All Reinvestment Fund members will serve three (3) year terms. The Reinvestment Fund is meant to stimulate and rejuvenate small businesses in communities that were negatively affected by cannabis prohibition.
The Advisory Board will also be actively involved with the Cannabis Control Board, and strives to become actively engaged with drafting regulations and advising the Cannabis Control Board’s decisions. Further, with the Advisory Board members’ wide breadth of experience and background in the cannabis industry, the Advisory Board hopes to provide a distinct opinions and insight for the regulations that the Cannabis Control Board considers.
Nearly all Advisory Board members expressed excitement about the opportunity to create an equitable and inclusive cannabis industry. Advisory Board Member, Peter Schaffer, owner at Nanticoke Gardens, expressed his excitement at bolstering New York’s cannabis industry and potential collaboration with cannabis and beverages. Further, Junella Chin, an Integrative Medical Cannabis Physician, spoke of the healing properties of cannabis and making cannabis treatment more available to patients who could benefit from such treatment. Advisory Board member, Gary Johnson is Chair of the National Association for the Advancement of Colored People New York State Economic Development, and expressed interest in the Advisory Board’s future in imparting equity to groups that have been traditionally treated negatively by past cannabis based legislation.
New York State Department of Taxation and Finance has created a new webpage with information on the Adult-use cannabis products excise tax.
This cannabis excise tax will apply to both:
Distributors of adult-use cannabis products on sales of retailers, and
Adult-use retailers on sales to retail customers.
If you plan to sell adult use cannabis you must register with the Department of Taxation (which is in the process of developing an online registration process and other guidance. More information is available on the NYS Department of Taxation website (https://www.tax.ny.gov/bus/auc/)
As we previously reported earlier this year, Governor Cuomo signed the Marijuana Regulation and Taxation Act (“MRTA”), which legalized adult-use and possession of cannabis, effective March 31, 2021. The MRTA amended Section 201-D of the New York Labor Law (“NYLL”) making it illegal for employers to discriminate against someone for their use of cannabis outside the workplace, outside of work hours and while not using their employer’s equipment or property.
This spurred some obvious questions from employers- Can we take action against an employee for using cannabis while working? Can an employee use cannabis while on breaks? What about employee use of cannabis if they are not at work on premises but are on call? The New York Department of Labor has now published FAQs addressing these, and other, common employer questions.
Given the billions of dollars of revenues, including tax dollars, generated by the industry, which are generated by cannabis companies and companies that provide services to the industry, cannabis banking is truly a public concern. The very laws that seek to create transparency as to the public fisc, such as the Bank Secrecy Act, have forced cannabis to be a cash business, which means not all of the cannabis dollars may be accounted for as in other industries, thereby undermining the objectives of those laws. The SAFE Banking Act would resolve those concerns by allowing core and ancillary companies to utilize all of the electronic banking, checking, payroll, and accounting functionality that businesses in all other industries enjoy. There is no question the passage of this legislation would provide a game-changing boost to the cannabis space.
Senators Dan Laughlin (R) and Sharif Street (D) are introducing legislation that would legalize marijuana for adult recreational use in Pennsylvania. This is the first time a republican senator has backed such a bill. The proposed legislation will attempt to generate revenue for the commonwealth and to promote social equity by way of increasing the number of licenses to operate, imposing a 6% sales tax, and imposing a 10% excise tax that would go toward a Cannabis Business Development Fund to provide aid, grants, and technical assistance to businesses and individuals in areas that have been disproportionately impacted by criminal prosecution for cannabis violations. Expungement of cannabis crimes would also be available.
Laughlin’s pragmatic views may encourage his republican colleagues in PA’s legislature to join him. As Laughlin stated during a press conference: “Our proposal prioritizes safety and social equity. And furthermore, it will let Pennsylvania’s robust agricultural industry participate in marijuana cultivation.” And both Laughlin and Street encouraged PA legislators to keep pace with lawmakers in New Jersey and New York, stating in their co-sponsorship memo: “This year our neighbors in New Jersey have signed adult use marijuana into law and our neighbors in New York are likely to legalize. It is our duty to taxpayers to seize the initiative and legalize marijuana concurrently with bordering states. Failure to do so risks permanently ceding hundreds of millions of dollars of new tax revenue as well as thousands of jobs at a time when taxpayers can least afford it.”
On February 22, 2021, Governor Murphy signed into law The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, regulating cannabis use and possession for adults 21 years and older. The ratification of the bill follows a protracted legislative logjam since Election Day, when New Jersey voters overwhelmingly approved a mandate to provide the infrastructure for the legalization of cannabis in the state. The legalization immediately decriminalizes certain amounts of marijuana and hashish statewide. Meanwhile, the recreational production and sale remains subject to regulatory schemes not yet enacted.