Gov. Andrew Cuomo seems serious this year about legalizing adult-use recreational cannabis after failing to do so for two consecutive years.
What is different this time is the governor has a $15 billion budget deficit created in large part, he said, by the Covid-19 health pandemic. And neighboring state New Jersey legalized cannabis last year, which some say could force the governor’s hand.
In fact, he has vowed to pass the legislation, which would make New York the 16th state to legalize adult-use cannabis.
At least $300 million per year in new tax revenue is at stake. In fact, some believe the state could rake in as much as triple the revenue projected by the governor. (For the purpose of comparing, Colorado, which has more than three times fewer residents than New York, collected $274 million in tax revenue.)
“I think you could be looking at a billion dollars in tax revenue per year, and then the really interesting question is how do you decide what to do with that money?” said Brian Vincente, a Colorado attorney, and the lead drafter of that state’s historic legalization initiative.
The governor’s proposal includes two taxes. One tax is based on the potency of the product that is imposed on the sale of cannabis from the wholesaler to the retail store.
The second tax is 10.25% at the register when consumers purchase products at cannabis retail stores.
And the governor this time included a somewhat controversial opt-out clause for counties and cities with population of 100,000 or more residents to appease more conservative opponents of legalization.
Disagreements over how to spend the windfall of revenue the state will get from taxing cannabis and how to distribute licenses have derailed legislation in past years.
Unlike in prior years, the governor’s proposal includes social