After recommitting to adult use in 2020 earlier this month, NY Gov. Andrew Cuomo unveiled the New York state budget for 2020 and it includes allocations for cannabis legalization. Now, is this the same thing as legalization occurring in NY state in 2020? No, it is not. But is this a strong sign from the governor’s office about his seriousness in passing legalization? Yes.

Here’s a quick look at what is in the state budget re: cannabis.

Regulatory framework for cannabis via budget

Included in Cuomo’s budget was specific language calling for a centralized cannabis regulatory body.  The Office of Cannabis Management would, according to the budget, oversee medical, adult-use and hemp production in the Empire State. Critically, if still somewhat undefined, the budget includes language for social equity, an “egalitarian” recreational market that would “facilitate entry through access to capital, technical assistance and incubation of equity entrepreneurs.”

A streamlined Office of Cannabis Management, in essence a one-stop shop for cannabis licensure, enforcement and development, seems to be one key area where NY has learned from other states’ mistakes. [One need only look at California’s proposed plan to consolidate for citation in the cannabis history book footnotes –Ed.]

Tax tiers coming in threes

Under the budget, Cuomo’s plan is calling for tiered tax system resembling this:

• 20% tax on any operating entity selling to a retailer
• Cultivators would be facing a $1/dry weight gram of flower
• Trim taxed at $0.25/DWG
• Wet flower will be taxed at $0.14/gram
• Additionally, municipalities over 1M population would also benefit from an additional and separate 2% tax. *Unless we’re missing something, the only municipality that would qualify would be NYC.

Will New York legalization pass in 2020?

Cuomo’s budget is calling for some interesting (and smart) proposals for a legalized market in New York. But as far as legalization goes, it still depends on what state vs local lawmakers are willing to compromise on when it comes to tax revenues and what they are allocated for. Beyond that, much like last year, the black caucus of NY lawmakers will need to see tangible benefits and plans regarding social equity and communities that were adversely impacted by the war on drugs.

Have questions on New York legalization or other cannabis matters? Contact the experts at MMLG.