All Eyes On New York State Plan To Legalize Marijuana, Help Those Hit By War On Drugs

Governor Andrew Cuomo Photo: Shutterstock

Marijuana activists are poised for a major victory in New York as state lawmakers consider a sweeping plan to legalize and tax cannabis, and pour money into minority communities devastated by the War on Drugs.

Gov. Andrew Cuomo, a moderate Democrat, is this year strongly backing marijuana legalization and hopes to persuade governors and voters in surrounding states to adopt similar measures. Cuomo’s push for a regional approach is itself novel and highlights the potential national impact if one of the most influential states embraces recreational cannabis.

New York lawmakers considered a similar legalization plan last year, and while it was predictably opposed by law enforcement, conservatives and teacher groups, it also found opposition from an unexpected quarter: progressive activists who said the measure didn’t do enough to help minority communities.

Most states that have legalized marijuana have made only minor steps to aid communities historically targeted with unfair drug-law enforcement, and progressive activists said they would rather wait a year than accept yet another law that didn’t do enough to correct policies upheld by the War on Drugs that targeted many blacks and Latinos for decades in the U.S.

“For me, sometimes, incremental progress is not the answer. You have to look at what opportunities would be lost through the incremental progress,” said longtime cannabis equity activist Shanita Penny, who was critical of last year’s plan for not going far enough to benefit all New Yorkers. “The folks that were left behind in the proposal last year were small businesses, and the communities and individuals impacted by the War on Drugs.”

New York is one of several states that may legalize cannabis this year, as lawmakers and voters also consider proposals in Arizona, Arkansas, Pennsylvania, Connecticut, New Hampshire, North Dakota, South Dakota, Rhode Island and New Jersey. Eleven states already permit recreational cannabis, while 33 states permit some form of medical marijuana.

Lawmakers in New York last year failed to agree on the legalization plan’s specifics to aid minority communities — provisions known as “equity” — and it ultimately died after also facing strong opposition from lawmakers outside New York City, particularly those from conservative areas. While Cuomo wanted a new office controlled by his administration to decide how to aid minority communities, some African American legislators insisted that the specifics be set out in the law itself.

Although California’s approximately 40 million residents legalized marijuana four years ago, New York is widely seen as a key building block toward national legalization since it both sets the tone for much of the Northeast and because so many investors are based in New York City’s Manhattan borough.

Jacobi Holland, a 28-year-old cannabis entrepreneur from New York City, was disappointed when last year’s effort failed. But because New York is also leading a multi-state effort, including New Jersey, Pennsylvania and Connecticut, Holland says there’s time to get the law right.

“New York is going to be the center of all this. I see that it’s worth the fight,” he said.

Cuomo’s proposal is similar to plans proposed by Democratic state legislators and creates a new Office of Cannabis Management to oversee and regulate the entire industry. Advocates say having a powerful centralized office will be an effective way to make sure women, minorities and farmers get help in acquiring licenses. Critics fear that central office could be improperly influenced by politics, given the huge sums of money at stake. But both agree minority communities should have the opportunity to benefit from new business opportunities

In other states that have legalized marijuana without making special equity provisions, sales licenses have overwhelmingly gone to wealthy white men without criminal records. Activists have said this system perpetuates the harms of the War on Drugs and its impact on minority communities.

Federal studies show that while white and African American people use marijuana at roughly the same rates, African Americans, particularly young men, were arrested at far higher rates.

Cuomo’s plan also allows people who might not otherwise qualify for a license on their own to join cooperatives, and uses some of the tax money collected on pot sales to help boost marijuana businesses in communities previously targeted by unfair drug-law enforcement.

“We’re talking about a multi-decade problem that was created. It’s not going to be solved in a couple of budgets,” Assembly Speaker Crystal Peoples-Stokes, D-Buffalo, said. “So it has to be in the statute. Because the next governor, whoever he or she may be, should have the same responsibility to invest in the lives of these folks as the previous governor.”

New York’s legalization effort is being closely watched in part because the state has so many residents, but also because Cuomo is hoping to persuade Connecticut and Pennsylvania to adopt similar plans, while New Jersey residents may approve a similar one via a ballot initiative. Lawmakers in Illinois last year passed a comprehensive proposal sharing many similarities with Cuomo’s.

Cuomo’s office says legal marijuana in New York could ultimately generate as much as $300 million in new taxes once the industry is fully operational. New York is facing a $6.1 billion budget deficit driven largely by rising health care costs, and lawmakers across the country have eagerly taxed pot to help bridge budget gaps. But activists are increasingly pushing politicians to acknowledge that it’s wrong to tax marijuana users without also offering assistance to unfairly targeted communities.

“Our economic growth would be a hollow victory if we did not continue our social progress,” Cuomo said in announcing his plan in early January. “For decades, communities of color were disproportionately affected by the unequal enforcement of marijuana laws.”

Also driving this year’s push is the growing understanding that politicians who support legalization are likely to earn more public support, not less, especially in Democrat-dominated states. Cuomo can see the tide has turned and he’s free to push harder, said cannabis attorney and consultant David Feldman.

Cuomo included his legalization plan in the state’s annual budget plan, which lawmakers must approve by April 1.

“I think what he learned in the intervening year, although there is some opposition, is that it’s a much safer political choice,” said Feldman, a partner at Hiller PC in New York and an expert in cannabis law and finance. “It’s how things evolved with gay marriage.”

Like other cannabis legalization efforts before state lawmakers or voters across the country this year, Cuomo’s proposal contains provisions to address youth use, target stoned drivers and track marijuana production from seed to sale to reduce the black market.

Last year, New York decriminalized marijuana by softening penalties and allowing for previous arrests for small amounts of weed to be expunged from people’s criminal records. Cuomo’s decision to support legalization represents a major shift seen in part to have been driven by a 2018 primary challenge from Cynthia Nixon, the actress and activist who tied racial justice to marijuana legalization and equity assistance.

Penny said the lessons learned in other states are bearing fruit in New York. Penny, who served as the president of Minority Cannabis Business Association until October, said she’s learned not to initially compromise on equity programs because there’s no going back to “fix” things later.

“When we just throw something out there and then come back and attempt to fix it, we know that doesn’t work well. The same folks who have been left behind, who are still struggling, they will remain in that position,” Penny said. “We stood our ground, drew that line, and that delay was necessary so we can go full steam ahead.”

Holland, of New York City-based On The Revel, said he would have preferred to see New York be further along with legalization by 2020, rather than still debating the plan’s specifics. Holland said he worries that minorities like him trying to break into the cannabis space could be left even further behind if the federal government acts before New York gets its system running.

Nationwide, the people who open marijuana stores in newly legal states have a significant advantage over late-comers, especially as multi-state operators have begun consolidating independent stores and squeezing down the margins. Because consolidation favors deep-pocketed investors, and because previous equity efforts were tentative at best, the cannabis industry nationally remains largely white and wealthy. New York’s legislation aims to help correct that.

“There’s no denying that early players have an advantage,” Holland said. “I think that the pushback in New York is worth it because however New York legalizes is going to be a model for other states, and a statement across the globe. (But) whatever advantage you have at the local level, you lose that opportunity if it’s federally legalized first.”

For critics, however, federal legalization remains unlikely for the foreseeable future. Anti-legalization campaigner Kevin Sabet of the group Smart Approaches to Marijuana helped coordinate opposition to the New York plan last year in part by arguing that while most Americans want to see penalties for marijuana use eliminated, creating cannabis stores remains unpopular in many places. He said his group hopes to play the same role this year, although Cuomo appears more engaged this time around.

“I am concerned he’s going to spend some political capital and twist arms. I think it’s going to be tough but it’s winnable,” Sabet said of his opposition plans. “Legalization has hit some walls.”

But cannabis consultant Matt Karnes, founder of GreenWave Advisors, said if the Empire State moves ahead, much of the Northeast will likely follow.

“Momentum is really building in New York,” Karnes said. “When that happens, I think everybody is just going to pile on.”