Marijuana Regulation & Taxation Act

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The district manager speaks out against a diversion of sales tax and a misdirected distribution of excise taxes for cannabis

Calling it the “ultimate hot-button issue of the year,” a representative from the New York State Department of State said legalizing the sale and cultivation of cannabis could have a profound impact on farming communities like those in Genesee County.

Paula Gilbert (photo right), local government specialist with the Albany Local Government Services Department, announced that the Marijuana Regulation and Taxation Bill, signed by Governor Andrew Cuomo on March 31, paved the way for an estimated $ 1 billion -Industry levels expected annual sales of $ 350 million and 30,000 to 60,000 job creation.

Gilbert shared her knowledge of the new law earlier this month during a webinar for Hot Button Land Uses training for community planning staff.

She said the economic benefits of cannabis production and sales are “really significant, especially in some places in New York state where we have distressed farmers who are really in trouble today.”

“It’s not just about selling these (products) in your community, but there will be the entire pipeline of producing, labeling and making packaging,” she offered. “So there are many opportunities for many churches to get in the door.”

Farm owners in Genesee and other rural areas lease land to solar companies and benefit from lucrative contracts in the industry. Gilbert believes they will do the same for growing marijuana plants.

Legislation allows cannabis use for adults aged 21 and over – those who own, display, buy, receive, or transport up to 3 ounces of flowers or 24 grams of concentrated cannabis.

It also expands New York’s existing medical marijuana program, allowing eligible users instantly to smoke cannabis in public where tobacco is allowed.

Gilbert said consumption in schools, states, workplaces, or vehicles is not allowed because the federal government is still responsible in those places.

She explained that there are two types of retail locations:

  • Retail pharmacies, which could be store fronts to purchase products for personal use and adult use, e.g. In Massachusetts, California and Colorado;
  • Lounge-like locations for purchase and on-site use.

Home delivery of cannabis is planned for the future, leading to door-dash-type services.

Gilbert said the state is establishing the cannabis management and marijuana control agency, The company will have an executive director and will be housed in the New York State Liquor Authority.

The office will implement regulations for production, licensing, retailing, packaging, labeling and use, with first sales not expected until 2022 or early 2023.

The following are other aspects of the law that were shared during the webinar:

FOCUS ON DIVERSITY

Gilbert said the state is focusing on diversity – a 50 percent target for minority or women-owned businesses, distressed farms, disabled veterans – and small-scale manufacturing.

She said the strategy differs from other states in that New York hopes to prevent large corporations and industries from controlling the market.

A person or company is prohibited from owning a growing facility and pharmacy, with the exception of micro-businesses, she said. A micro-business can be defined as someone who owns all of the production methods and only sells what is grown locally.

In the future, self-cultivation for adults will be limited to three mature and three immature plants with a maximum of 12 plants per household.

SALES AND EXCISE TAXES

Gilbert said sales tax on cannabis will be 13 percent, with 9 percent going to the state, 3 percent to the host community, and 1 percent to the county.

In addition, a THC excise tax (tetrahydrocannabinol) is levied.

“The heavier the product, the more taxes there are,” she said, outlining the taxes of half a cent per milligram of flower, eight tenths of a cent per milligram of concentrated cannabis, and 3 cents per milligram of edible cannabis or higher performing products.

“Hopefully some of this tax dollars will help people who become addicted – that is part of it,” she added. A portion of the state’s share of the revenue is used for addiction treatment options.

LOCAL REGULATION

The municipalities have until December 31st to de-register from any pharmacy or consumption point in their area of ​​responsibility.

“However,” said Gilbert, “if you refuse, it may be challenged by a sweeping voter referendum.” If you are a little nervous about this and are not sure if this is what you want in your community, then it is time to think about what you are going to do. “

She said that since the rules are not finalized, she advised community leaders to wait and see.

“Once we get an idea from the cannabis management and marijuana control bureau, many questions will answer themselves,” she said.

If a municipality decides against a rejection, it loses the opportunity for tax revenue. However, it would have the option to choose again if legislative or public opinion changes.

In any case, municipalities cannot opt ​​out of growing, testing or packaging facilities or prohibit personal cannabis use in private households, she said.

CRIMINAL RECORD EXPUNGING

Gilbert said the law also calls for the waiver of previous convictions relating to cannabis, which is now considered legal, and said the state would take the privilege of clearing previous offenders’ records to some point.

Not everyone will have their record erased as the reversal of conviction is based on the level cannabis is allowed today, she said.

If the conviction concerned an amount greater than what the new law allows, this criminal record would not be erased.

“Trapped for the kid in high school with a small amount – it might undo that,” she said.

ADDITIONAL TOPICS

  • Individual cannabis growers are allowed to grow plants outdoors, but most are run in greenhouses because “they’re picky plants anyway,” she said.

Growth for personal use doesn’t come until 18 months after the first retail store is sold.

  • Establishments offering alcohol are unlikely to be licensed to sell cannabis.

“They are still trying to figure out how to tell if people are under the influence of marijuana,” she said.

  • There is a possibility that medical cannabis dispensaries will be turned into retail stores.

“Yeah, we saw that in Massachusetts, too,” she said. “Since New York has a fairly large medical cannabis industry, it is likely that certain products will be sold for medicinal users and others for personal use.”

More information is available at www.cannabis.ny.gov.