Albany, NY – The CSG team traveled to the New York State Capitol on Wednesday to join the Start Smart-NY Coalition, and lead the New York Cannabis Growers & Processors Assocation in advocating for the passage of legalized adult-use cannabis in the budget process. Those efforts included meeting with key lawmakers, senate leadership, and rallying support through a coordinated press conference.
Support for Legalization Grows
Governor Cuomo included in his 2021 Budget proposal the Cannabis Regulation & Tax Act (our analysis can be found here) that would legalize adult-use cannabis while putting in place an extensive regulatory structure underneath the Office of Cannabis Management. Meanwhile, lawmakers have been working on a revamped version of their legalization bill, the MRTA, legislation that ultimately failed in 2019 at the end of session. The new version is expected to be released soon and is expected to appease lawmakers requesting specific tax revenue allocations for communities most affected by the drug war and representatives from moderate districts where the concerns of law enforcement have made supporting legalization difficult.
Our team sat down with members of the “Long Island 6”, a coalition of democrat state senators in Long Island, to discuss their concerns and how the industry can help. We conveyed that keeping communities safe is a key priority of the NYCGPA while pointing out that cannabis use has not significantly increased in states that have legalized. Opposition in their districts is strong and well organized, underscoring the need for legalization to pass in the budget instead of a standalone bill where individual votes can be targeted.
Concerns Raised Over Taxes
In both the Governor’s proposal and the MRTA, tax rates are astonishingly high. The NYCGPA has focused on the excised taxes levied on cultivators, at the rate of $1.00 per dry gram. This would create a big burden on small producers who on average see costs of production up to 3x higher than large operators who have been effective at utilizing automation and economies of scale. Our analysis shows that including excise taxes, costs may represent up to 75% of the average wholesale price. In order to foster a craft industry, we proposed lowering the rates through a small producer credit to $0.35 per dried gram.
The Time is Now
Across the coalition advocates pressed the need for legalization to occur in the budget, which is due on April 1st. This sentiment was echoed by our CEO and VP of the NYCGPA at the joint press conference: