Will pandemic, N.J. action push NY to OK recreational marijuana?

State lawmakers say they are likely to finally legalize recreational marijuana in 2021 because of two factors: New Jersey’s approval puts more pressure on New York to follow suit and the state needs the money.

New Jersey voters approved a marijuana referendum Tuesday, making it the latest neighbor to do so, joining Vermont and Massachusetts. Further, Connecticut leaders say they might take similar action next year.

New York lawmakers came close to making a deal on marijuana legislation in 2019 but fell short. They began talks this year, but the coronavirus pandemic sidelined almost all policy discussions for the year.

The pandemic also wrecked the state financial budget and even if Washington delivers more stimulus aid to states, New York will be looking at all sorts of ways to balance its budget.

Legalizing — and taxing — marijuana could be one of those ways.

"I think this year it is ripe because the state is going to be desperate for funding," Gov. Andrew M. Cuomo told public radio station WAMC / 1400 AM, adding, "and also it’s the right policy."

Legislators say New York also needs to get it done so it’s not losing revenue to neighbors. This week, Massachusetts announced it surpassed $1 billion in marijuana sales during the first two years.

"Once Massachusetts and Vermont approved cannabis, and now New Jersey, it makes it even more likely" for New York legislators to finally act, said Assemb. Donna Lupardo (D-Endwell), co-sponsor of a marijuana legalization bill.

"We know a majority of the public is interested in this," Lupardo added, referring to public-opinion surveys showing strong support for marijuana legalization.

"Now that New Jersey has opened the door for themselves, you will see some of the fastest growing (marijuana) dispensaries all along River Road, on the New Jersey side of the Hudson River," said Sen. Liz Krueger (D-Manhattan), Senate sponsor of the marijuana legalization bill.

She added: "We need to get cannabis out of the criminal-justice universe and into the new business, new jobs universe — not unlike alcohol."

New York is facing a massive budget hole — a $14 billion shortfall in an overall $175 billion budget, according to the latest Cuomo estimates.

Revenue from marijuana taxes, estimated at $300 million in the first full year of operation, would make a very small dent in the state’s budget problem. And it would likely take 12-18 months after legalization before the state sees much revenue. But any amount helps, lawmakers have said.

In the past, marijuana talks bogged down over several issues — most importantly, how to allocate the tax revenue. New York, like Vermont before it, is trying to legalize marijuana through legislation without first holding a public referendum.

Cuomo generally has favored using the money to fill budget gaps. African-American, Latino and other legislators have sought to earmark portions of the money for programs in minority communities, noting they have suffered from unequal enforcement of marijuana laws.

They also want to ensure some percentage of licenses are set aside for minority business owners.

"The governor has made it clear that legalizing adult use marijuana will be a top priority in next year's budget. … I'll continue to work with my colleagues to make it happen and I remain committed to ensuring that a portion of that revenue be reinvested in communities that have been negatively impacted by the so-called war on drugs," Assembly Majority Leader Crystal Peoples-Stokes (D-Buffalo) said in a statement to Newsday.

But revenue isn’t the only open question.

Others include whether to give municipalities the option to participate, how to structure a license program to ensure the business isn’t dominated by big operators and give smaller companies a chance, and what tax rate to set so as to not end up driving people back to the illegal market.

"We don’t want to make the mistake of other states in which we tax it so high we put legal businesses out of business," Krueger said.

They also want the legislation to drive two other expansions: Increasing New York’s medical marijuana program and increasing legal uses of dried hemp — such as mixing in concrete — to help hemp growers realize a bigger return on investment.

"Dried hemp can be sold for various purposes, including mixing in concrete," Krueger said. "But the law doesn’t say anywhere that you can do that. So we want to make sure can use all parts of hemp."