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New York Renews Legalization Push, Other Eastern States Likely To Follow Suit

January 12, 2021

As a new year begins, lawmakers nationwide are returning to work and outlining their top priorities for their upcoming legislative sessions, with cannabis at the top of the list in many states. Following the massive success of legalization referenda in November’s elections—which saw New Jersey, Arizona, Montana, and South Dakota pass recreational legalization measures by commanding margins—momentum and public sentiment have shifted palpably, opening the door to legal markets in states where they would have been unthinkable before 2020, as well as in those that have tried unsuccessfully in the past.

Nowhere are the shifting winds more apparent than in New York State, where governor Andrew Cuomo is once again placing cannabis reform front and center in his overall proposal for post-Covid recovery. “Despite the many challenges New York has faced amidst the Covid-19 pandemic, it has also created a number of opportunities to correct longstanding wrongs and build New York back better than ever before,” Cuomo said in an announcement last week. “Not only will legalizing and regulating the adult-use cannabis market provide the opportunity to generate much-needed revenue, but it also allows us to directly support the individuals and communities that have been most harmed by decades of cannabis prohibition.”

Cuomo reiterated these points at the State of the State address he delivered yesterday, saying, “We will legalize adult-use recreational cannabis, joining fifteen other states who’ve already done so. This will raise revenue and end the over-criminalization of this product that has left so many communities of color over-policed and over-incarcerated.”

The governor’s office has yet to release a full proposal outlining policy specifics, though the announcement states that it will reflect “national standards and emerging best practices to promote responsible use” and specifically highlights stringent quality and safety controls around packaging, advertising, and testing of cannabis products. While rigorous testing is uncontroversial, the strict limits on cannabis advertising many states have adopted may continue to pose challenges to marketers working to establish brand identity and awareness. Nevertheless, New York’s cannabis market is currently expected to generate $300 million in state revenue annually, once fully operational.

In Virginia, governor Ralph Northam is pushing for legalization following his success in decriminalizing cannabis last year. His budget proposal, released last month, includes millions of dollars for expunging old marijuana charges and lays the groundwork for full legalization. Now a bill filed by state delegate Steve Heretick will need to navigate a statehouse where the votes are far from assured. The proposal would limit possession to one ounce but allow adults to grow three mature and three immature plants for personal use. It would set a 9.6% state sales tax and allow local municipalities to tack on additional taxes up to 15%. Revenue from the state tax would go into the general fund and into a fund for cannabis education. Elsewhere, Connecticut governor Ned Lamont likewise called for legalization, and Kentucky lawmakers are slated to consider a proposal to implement a medical marijuana program.

Prospects at the federal level are also rising, though much uncertainty remains. Canopy Growth CEO David Klein expects that action from Congress and the incoming Biden administration could set the stage for the company to enter the U.S. by this time next year, he told Bloomberg Canada. “What we really need is some combination of the SAFE Banking Act, a revised Cole memorandum, and a reclassification by the executive branch, all of which probably happens in the next six-to-eight months,” Klein said. “We’re pretty confident we’ll be operating in the U.S. a year from now.”—Danny Sullivan

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