"Opting Out" of Dispensaries and Consumption Sites and Permissive Referendums Under New York’s Marijuana Regulation and Taxation Act (MRTA)

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The Marijuana Regulation and Taxation Act (“MRTA”) provides towns, villages, and cities an opportunity to opt out of allowing retail dispensaries and on-site consumption licensees to operate within the municipality’s jurisdiction. To do so, the town, village, or city legislative body must adopt a local law by December 31, 2021, subject to a permissive referendum governed by Municipal Home Rule Law (“MHRL”) §24, requesting that the Cannabis Control Board (“CCB”) prohibit the establishment of on-site consumption sites and/or retail dispensaries within the municipality.

MHRL § 24 details a specific process governing permissive referendums depending on which type of municipal entity (i.e. town, city or village) is adopting the local law. With respect to a town or city, MHRL § 24 provides that the proposed local law takes effect 45 days after its adoption unless a valid petition requesting a permissive referendum is filed with the clerk within that 45-day period. In other words, the local law opting out of allowing retail dispensaries and/or on-site consumption licenses takes effect 45 days after adoption without a referendum unless a valid petition for a referendum is filed according to MHRL § 24. Town boards should take note that the permissive referendum procedures under MHRL § 24 are different than those requirements under Article 7 of the Town Law, which unlike MHRL § 24, allows a town board to call for a referendum on its own.

Instead, pursuant to MHRL § 24, only qualified electors may file with the clerk a valid and compliant petition protesting against such local law. Qualified electors are those individuals who were qualified and registered to vote in the last general election. If a valid and compliant petition (i.e., signed and authenticated by at least 10 percent of the total number of votes cast for governor during the last gubernatorial election in such local government) is timely filed with the clerk, then the local law shall not take effect until an affirmative vote of a majority of the qualified electors of the local government votes for the local law’s approval. MHRL § 24 further authorizes the clerk to examine the petition and certify that it complies with all of the requirements of MHRL § 24.

When a petition is filed and certified, and no timely written objection is made to the clerk’s determination, the clerk then prepares and submits a proposition to the Board of Elections for placement on the ballot. The proposition may be submitted at the next general election that will be held more than 60 days after the filing of the petition or a special election if the petition requests and the local board adopts a local law submitting the proposition to a special election. Any such special election must be held no earlier than 60 days after the adoption of the local law providing for the special election.

With respect to Villages, MHRL § 24 provides that villages that enact local laws subject to permissive referendum shall conduct a permissive referendum according to Article 9 of the Village Law. There are two notable differences between the referendum procedures under MHRL § 24 and Article 9 of the Village Law. First, Section 9-908 of the Village Law allows a village board, on its own motion, to call for a referendum. Second, the Village Law shortens the effective date of a local law and the time allowed for qualified electors to submit a petition for a referendum to 30 days after adopting the local law (as compared to 45 days for towns and cities).

When deciding whether to adopt a local law opting out of allowing retail dispensaries and/or on-site consumption sites within their boundaries, town, village, and city boards should be mindful of the anticipated date of adoption and the date of the next general election to be held in their locality.

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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