No Adult-Use Marijuana Legislation in New York's Annual Budget

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For the second consecutive year, New York State's annual budget did not include adult-use marijuana legislation. The COVID-19 pandemic all but ensured the exclusion of adult-use from the budget, with the legislature shifting its focus to the health and safety of New York residents and the stability of the economy.

Nevertheless, differences in proposed adult-use bills with respect to social equity policies were not resolved before the pandemic. The Cannabis Regulation and Taxation Act (CRTA) and the Marihuana Regulation and Taxation Act (MRTA) remain the two competing adult-use bills. Each bill approaches how to allocate funds derived from the cannabis market revenue to promote social equity differently; the CRTA proposes the indirect allocation of funds through such measures as zero-to-low-interest business loans and application fee waivers, while the MRTA proposes direct allocation of funds to underserved populations through an expansive grant program.

Additionally, New York awaits the drafting and approval of comprehensive hemp regulations from the departments of Health and Agriculture and Markets. Under the Hemp Bill signed by the Governor in December and the Chapter Amendment approved in January, the legislature tasked the administrative agencies with drafting comprehensive regulations establishing manufacturer, wholesaler and retailer applications, laboratory testing standards and packaging/labeling requirements. Although several provisions of the Hemp Bill have already gone into effect, absent these regulations, their practical enforcement will be delayed.

It is possible that the NY Legislature could enact and pass a stand-alone bill addressing adult-use before the conclusion of the legislative session in June. However, considering the legislature is concentrating on addressing the fallout from the COVID-19 pandemic, it is more likely adult-use will be addressed in next year’s annual budget process.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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