News & Opinion » News

Cuomo's new cannabis bill is a mixed baggie, advocates say

by

The legalization of recreational cannabis is a top priority in Governor Andrew Cuomo’s 2021 budget. That’s nothing new. Last year, Cuomo introduced a similar bill, dubbed the Cannabis Regulation and Taxation Act (CRTA), that failed to pass.

This year’s bill has the same title, but has undergone some notable tweaks.

With recreational markets opening in Michigan and Illinois in 2020, advocates believe 2020 is the year New York legalizes cannabis. Assembly member Harry Bronson said watching other states adopt legalization is influencing New York to more seriously push legalization.

“More and more states are going in that direction,” Bronson said. “We’re now looking at how we are going to develop a regulated market.” 
news1-1.jpg

The CRTA was not the only piece of legalization legislation during the 2020 session. The Marihuana Regulation and Taxation Act (MRTA), a bill first introduced by Manhattan Senator Liz Krueger in 2013, was also considered by lawmakers. That bill focused on alleviating the social justice impact of criminalization, and was staunchly supported by cannabis activists.

Attorney Jason Klimek heads the cannabis practice at the law firm of Boylan Code and has worked closely in the lobbying efforts to legalize marijuana. He said this year’s CRTA is a better piece of legislation than last year’s but still falls a bit flat.

“From my tax nerd perspective, nothing’s changed, we still have all of the problems we had last year on it, they didn’t change the rates at all,” Klimek said. “If they go into effect, they’ll be the highest in the country.”



The CRTA imposes a tax of $1 dollar per gram of smokable bud and a 20 percent tax on the sale from a cultivator to a dispensary, which would ultimately be passed on to the customer. On top of that is another 2 percent for the county. So, if an ounce of bud’s base price is, say, $200, a customer should expect to pay $86 in taxes in Monroe County, a figure including sales tax of 8 percent.

Under the law, tax revenue would be deposited into a newly created cannabis revenue fund.

Klimek is concerned high taxes will leave people still buying from the black market, as well as make it difficult for small businesses to survive. He believes many small businesses will fold due to high costs, leaving big business like Columbia Care to buy them up “at pennies on the dollar.”

“Small businesses will not be able to compete with the illicit market,” Klimek said. “These businesses will ultimately collapse.”

The CRTA does propose a number of social justice measures. It would create an Office of Cannabis Management, which would cover all regulation and licensing of marijuana across the state. Initially, it would give women and minority-owned businesses the priority when it issues licenses.

Criminalization of cannabis has disproportionately affected people of color. A 2019 report from the John Jay College of Criminal Justice found that in 2017, blacks in upstate cities were 12.1 times more likely to be arrested for marijuana possession than whites.

“I want revenues in part to be used to help families most impacted by criminalization,” Bronson said.

Where cannabis revenue will go is among the most pressing discrepancies between the CRTA and MRTA. The MRTA held a provision that 50 percent of all revenue would be placed in a community reinvestment fund, aimed at assisting communities most impacted by criminalization.

The CRTA has no such provisions, and Klimek believes that could lead to situations where cannabis revenue could instead be used to fund things like the Metropolitan Transportation Authority (MTA).

“Under the CRTA, there’s a possibility the money generated by cannabis could be diverted to the MTA, for example,” Klimek said. “Under the MRTA, you couldn’t do that. That’s one of the big issues, and I think both sides recognize there needs to be a compromise.”

Gino Fanelli is a CITY staff writer. He can be reached at gfanelli@rochester-citynews.com.