(This story has been updated to include comments and to correct the number of adult-use shops existing medical marijuana companies could operate.)
New York is poised to legalize a nearly $2.5 billion-a-year recreational cannabis market after legislative leaders on Wednesday agreed on the program’s framework with Gov. Andrew Cuomo.
Retail sales could begin as soon as a year after the legislation is enacted.
The legalization bill is expected to be considered as soon as next week by the state Legislature, according to multiple media reports.
Cuomo would be expected to sign the bill once it passes.
Marijuana Business Daily projects that a recreational marijuana market in New York eventually would become the largest on the East Coast, generating $2.3 billion in annual sales by its fourth year.
New York would become the 17th state in the country to legalize adult use, unless another state enacts legislation first.
Legalization would create tens of thousands of new jobs in New York, which faces a multibillion-dollar budget deficit.
The measure would provide huge business opportunities for cultivation- and processing-equipment makers, packaging companies, attorneys and other ancillary services.
“It is my understanding that the three-way agreement has been reached and that bill drafting is in the process of finishing a bill that we all have said we support,” state Senate Finance Committee Chair Liz Krueger told Bloomberg Government on Wednesday.
Cuomo has been pushing to legalize recreational marijuana for a couple of years, but the pressure to do so heightened when voters in neighboring New Jersey approved adult-use legalization at the Nov. 3 ballot box.
“Great news on New York, it’s incredibly close,” said Steve Hawkins, executive director of the Washington DC-based Marijuana Policy Project. “It’s going to be a large market with an opportunity for social equity applicants to have a stake in it.”
Hawkins said his understanding is that as many as 900 retail stores would be allowed and that social equity operators would be permitted to have vertical operations with cultivation, processing, distribution and retail.
“The idea is to give them the greatest possibility to succeed within the market that’s going to be created in New York,” Hawkins said.
Jeremy Unruh, senior vice president of public and regulatory affairs for Illinois-based PharmaCann, one of New York’s existing MMJ operators, expressed optimism that New York is on the verge of legalizing adult-use marijuana.
“New York has never been this close to legalizing cannabis for adult use,” Unruh wrote in an email.
“We remain hopeful that the decision-makers in Albany are able to reach consensus on regulating marijuana in the Empire State in a manner that builds a responsible, diverse, job-creating cannabis ecosystem.”
A copy of the New York measure wasn’t immediately available.
But the bill reportedly includes provisions to strengthen the medical marijuana market in advance of an adult-use launch.
Here are some key points, according to Bloomberg and industry sources:
- The state’s 10 existing medical marijuana operators could operate three adult-use stores, co-locating them with three of their MMJ dispensaries.
- Existing MMJ companies also could double their current number of dispensaries from four to eight, provided two were in underserved areas.
- Cannabis products would be taxed at 13%, 9% of which would go to state coffers and 4% to localities.
- A wholesale tax would be imposed based on product potency, reaching as high as 3 cents per milligram of THC.
New Jersey lawmakers in February agreed on a measure to implement that state’s nearly $1 billion market, with a sales launch expected before year-end.
Virginia lawmakers also agreed on a legalization bill in February, but many of the measure’s provisions must be reenacted next year.
Jeff Smith can be reached at firstname.lastname@example.org.