CAZENOVIA — On Aug. 9, Attorney Stacy Marris, of the law firm Costello, Cooney & Fearon, joined the Cazenovia Town Board to present on New York State’s Marijuana Regulation and Taxation Act (MRTA) and its relation to local municipalities.
Signed into law on March 31, 2021, the MRTA legalizes the production, distribution and use of marijuana, and puts an end to a near 100-year prohibition on cannabis in New York State.
“The law was passed very quickly, and I like to say it was with a lot of asterisks,” said Marris. “It was basically like the state passed it and [said] ‘We will figure out a lot of the logistics later.’”
Marris went on to explain that the legislation creates the Cannabis Law, a new system of laws under the New York Laws, and amends a number of existing laws, including the Penal Law, Public Health Law, Tax Law, and Labor Law.
While some portions of the law went into effect immediately, other portions will be phased in over time. For example, the commercial sale of cannabis is not expected until 2022, at the earliest.
Under the new law, adults ages 21 and older can now possess, use and transfer — but not sell — up to three ounces of cannabis and up to 24 grams of concentrated cannabis, which is often used in a vape or an edible form.
“Depending on who is making the joints, they estimate that [three ounces] is anywhere from 150 to 200 joints,” said Marris. “You can have [that amount] on your person, just walking down the street.”
Marris added that cannabis is not to be sold to anyone who is visibly intoxicated, or to anyone whom retailers know or reasonably believe is acquiring the cannabis for the purpose of selling or illegally giving it away.
She also commented that the state is essentially trying to regulate cannabis in the same way as tobacco.
Per the NYS Clean Indoor Air Act, smoking or vaping cannabis is prohibited anywhere smoking or vaping tobacco is limited.
“Cannabis has been added to the Clean Indoor Air Act, but it is important for municipalities to keep in mind that those regulations under the Clean Indoor Air Act are only a baseline,” Marris said.
She explained that local municipalities are allowed to impose their own local smoking and vaping restrictions that are more stringent than those mandated by the Clean Air Act, but they should treat cannabis and tobacco the same.
Local governments can also impose their own smoking and vaping restrictions for property owned or controlled by the municipality, including outdoor spaces like parks and playgrounds. Violations of smoking restrictions are subject to a civil penalty not exceeding $25 or an amount of community service not exceeding 20 hours.
Marris pointed out that the Cannabis Law does include some restrictions of its own; under the law, cannabis cannot be smoked/vaped on school grounds, within 100 feet of entrances or exits or outdoor areas of schools or public libraries (except when on residential property), or on school buses.
Personal cultivation and home possession
Adults 21 and older will eventually be able to plant, cultivate, process and possess up to three mature and three immature cannabis plants, with a with a maximum of six of each per household.
Home-cultivated cannabis cannot be sold to anyone and is only intended for personal use.
Under the law, local municipalities, including counties, may enact and enforce certain regulations relating to home cultivation and possession of cannabis. Those governments cannot, however, completely ban or prohibit either.
“So, if you have a situation where there are three or four adults living [on one property], they couldn’t have 24 of each, it would be six and six” Marris said. “ . . . A local municipality can pass a regulation that limits it to [one mature and one immature plant], it just can’t be zero.”
Adults 21 and older are also allowed to have up to five pounds of cannabis in or on the grounds of their private residence.
Marris clarified that personal cultivation of cannabis is prohibited until the Office of Cannabis Management issues regulations for it. For recreational users, growing will not be allowed until up to 18 months after the first authorized retail sale of cannabis.
According to Marris, retail sales are not expected to take place until 2022, so cultivation would likely not be legal until 2023 or 2024.
The law expands the list of conditions for which medical cannabis can be prescribed, increases the number of caregivers allowed per patient, and permits home cultivation of medical cannabis for patients.
Individuals who wish to take part in the following activities must be licensed through the Office of Cannabis Management: cultivating cannabis, processing cannabis, distributing cannabis, delivering cannabis, dispensing cannabis, operating a cooperative, operating a microbusiness, operating a nursery, and operating an on-site consumption establishment.
The MRTA creates a two-tier licensing structure that is focused on preventing growers and processors from also owning retail stores.
“They are really trying to spread the wealth in terms of the licensing program,” Marris said. “[Individuals] who grow can’t also be the processors, and they can’t also own retail [dispensaries]. That’s because a large part of the program is based on social equity. That was one of the aspects that were really fought for when the law was being passed.”
Marris added that the cannabis program is also intended to assist minority-owned businesses, distressed farmers and service-disabled veterans. To that end, the state is required to have a goal of awarding 50 percent of licenses to such groups and to help communities disproportionately impacted by the enforcement of cannabis prohibition.
Licenses, which are subject to civil penalties, suspension, and revocation, expire two years after the date of issue and are subject to renewal.
Once the state starts accepting applications, cultivators, processors, distributors, retail dispensaries and on-site consumption license applicants must notify the municipality in which their premises are located of their intent to file an application.
Local governments must be notified no less than 30 days nor more than 270 days before the application is filed with the state.
While municipalities do not have the power to directly reject or approve a specific license application, they can issue an opinion to the Office of Cannabis Management as to whether or not the application should be granted.
“The Office of Cannabis Management has to deem that opinion a part of the record, and then it will make its recommendation to the Cannabis Control Board to grant or deny the application,” Marris explained. “ . . . It is written into the law that the Cannabis Control Board has to let the municipality know how they took their recommendation into account in granting or denying the application.”
According to Marris, the new section of the Tax Law, titled “Adult-Use Cannabis Products,” imposes taxes on both the distribution and retail sale of adult-use cannabis (not medical cannabis) and establishes several funds to finance social equity and public health programs.
At the retail sale-level, the MRTA establishes a 13 percent excise tax on cannabis, with 9 percent going to the state and 4 percent to the local county and municipality.
On a quarterly basis, the State Comptroller will receive the revenue from cannabis sales and distribute it to counties in which adult-use cannabis retail sales occur.
Counties are entitled to keep 25 percent of the money distributed by the Comptroller. The rest (75 percent of the total 4 percent) will be distributed to cities, towns and villages within the county in proportion to where the sales were made.
If a retail location is in a village within a town that permits cannabis retail sales, the money will be distributed to both based on the agreement in place between the town and village. If no agreement exists, the money will be split 50-50.
Currently, there are no restrictions on how local governments can use the revenue from the local tax.
Under the MRTA, cities, towns and villages — but not counties — may decide whether or not they will allow adult-use cannabis retail dispensaries and/or on-site consumption establishments within their jurisdictions. They cannot, however, prohibit possession or use, generally. Municipalities are also prohibited from developing their own local license system.
To “opt out,” a municipality must adopt a local law subject to permissive referendum on or before Dec. 31, 2021. Under to the law, municipalities can opt back in at any time.
“If you don’t opt-out by that date, you are prohibited from opting out in the future,” Marris said.
She clarified that the law needs to be adopted by Dec. 31, but a referendum, if it occurs, can happen after.
Marris also explained that a town opt-out only applies to the area of the town outside of any village or villages within it.
Municipalities can only prohibit retail cannabis dispensaries and the operating of on-site consumption establishments.
“Opting-out is limited to those two retail sale licenses,” Marris said. “You can’t opt out of any other type of license. So, growing, processing, delivering, and things like that, all can occur and the local municipality doesn’t have a say in that.”
If a municipality chooses to opt-out, it will not receive any revenue from the local cannabis sales tax.
Local time, place, and manner restrictions
The new law states that neither dispensaries nor consumption establishments may be located within 500 feet of school grounds or within 200 feet of a house of worship.
It also gives municipalities the power to issue time, place, and manner restrictions on the operation of dispensaries and/or consumption establishments, provided the laws or regulations do not make the operation of such entities “unreasonably impracticable,” as determined by the Cannabis Control Board.
Such restrictions can be related to local zoning, location of licensees, hours of operation, and adherence to building codes. All licensees must comply with local zoning regulations.
“Importantly, the Cannabis Law does maintain control of dispensary signage, so the state has control of how that’s advertised,” Marris said. “Basically, it is very limited. The law right now really says ‘There is no signage, and you have to get special permission from us.’”
Other provisions pertinent to municipalities
Marris said local peace and police officers can inspect all licensed premises and all records of licensed operators, as long as doing so does not interrupt the ordinary business or compromise the safety or security procedures of those licensees. Inspections can be done to ensure the licensees are complying with Cannabis Law, related regulations, building codes, fire, health, safety, and other applicable regulations.
Additionally, the law states that any chief of police, police officer or subordinate of any police department, or any elected village official who manages the police department, is prohibited from having an interest in the cultivation, processing, distribution or sale of cannabis products, or from offering for sale or recommending to any registered organization or licensee any cannabis product.
Use of cannabis while driving will remain prohibited and carries the same penalties as it did previously.
Marris noted that generally, the odor of burnt cannabis cannot be used to establish reasonable suspicion in an investigation, except when the investigation is into whether a person has been using cannabis while operating a motor vehicle. The odor does not, however, provide probable cause to search any area of a vehicle that is not readily accessible to the driver and reasonably likely to contain evidence relevant to the driver’s condition.
The State Department of Health has been tasked with conducting a study designed to evaluate methodologies and technologies for the detection of cannabis-impaired driving.
“That is difficult for a number of reasons, because it affects everyone differently,” said Marris.
If the Department of Health is successful, it has the power to create and implement rules and regulations to approve and certify a test for the presence of cannabis in drivers.
Protections for the use of cannabis
Under the MRTA, discrimination against individuals for engaging in conduct permitted under the Cannabis Law is now prohibited. Employers generally cannot discriminate against individuals for legal cannabis use off-hours. However, there are some exceptions.
Employers are not prohibited from discharging or disciplining an employee if doing so is mandated by state/federal statute/regulation, if doing so would put the employer at risk of losing federal funding, or if the employee is impaired on the job.
Employers are also prohibited from making hiring decisions based on a positive drug test for cannabis, but testing for cannabis is not prohibited.
Following Marris’ presentation, Town Attorney John Langey encouraged the town board to decide whether or not to opt-out of allowing retail sale licenses as soon as possible.
“If you guys decide to do the opt-out, I would tell you to do it as early in the fall as you can,” Langey said. “Our office has taken the position of ‘We have no position.’ This is all your [decision] as elected officials.”
Questions on the MRTA can be directed to Marris at [email protected] or Langey at [email protected]
The Cazenovia Town Board typically meets the second Monday of every month at 7:30 p.m. For more information, visit towncazenovia.digitaltowpath.org or call the Town Office at (315) 655-9213.