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NY legislators reach deal to legalize marijuana, sources say

A smoke shop employee holding a small amount

A smoke shop employee holding a small amount of CBD flower, in smoke shop in Brooklyn, on Feb. 22, 2020. Credit: AP/Marshall Ritzel

ALBANY — New York legislators have reached a deal to approve a bill to legalize recreational use of marijuana, sources said Wednesday.

Leaders in the Democratic-controlled Senate and Assembly were reviewing final language in the bill before officially announcing an agreement, but they have a deal for all practical purposes, two sources with direct knowledge of the negotiations said Wednesday evening.

The bill, which could be voted on next week, would include provisions to establish license, sales and tax regulations and establish a new regulator for cannabis products. It also would allow cultivation of a small amount of cannabis for personal use.

The agreement would represent a breakthrough for lawmakers who have been trying to legalize marijuana for several years but often became bogged down over how to allocate the projected $350 million in annual tax revenue from sales.

Fifteen other states have legalized recreational marijuana. Last month, Virginia lawmakers approved similar legislation, though it has a lag before becoming effective.

New York officials have said marijuana sales might not take place until 2022 to give the state time to establish the regulatory framework.

Under a framework being finalized Wednesday, marijuana sales and use would be legal for adults 21 and older.

Lawmakers would create a new Office of Cannabis Management, led by a five-member board. It would be contained within the State Liquor Authority and authorized to issue different licenses for cultivation, processing and distributing marijuana, as well as for dispensaries and "social consumption sites."

Similar to alcohol regulation, the state would create a "three-tier market" of growers, wholesalers and retailers with very limited overlap.

Localities could not prohibit residents from consuming or growing marijuana. But they could block or regulate retail sales and delivery, as well as consumption sites.

Taxes could be steep on retail sales: 13 cents on the dollar. Of that, nine would go to the state, one to the county and three to the municipality.

Home growth would be allowed. Each person could have up to three mature plants and three immature plants, and a maximum of 12 total plants per household.

A large share of tax revenue would be allocated to education funding, drug treatment and a "community grants reinvestment fund" to help communities unfairly impacted by historical unequal enforcement of drug laws.

The deal also would mean significant changes for medical marijuana. Under the bill, more medical conditions would be covered and patients could obtain a 60-day supply of the drug instead of the current 30 days. Also, patients would be able to obtain it in a smokable form, which currently is prohibited.

Unlike most states, New York has been attempting to legalize marijuana through legislation rather than by a public referendum. Vermont in 2018 became the first state to do so with legislation — but it still hasn't fully launched its retail market.

Gov. Andrew M. Cuomo was once a marijuana opponent but now says it is one of his top 2021 priorities.

"It's in New Jersey. It's in Massachusetts. To say we're going to stop it is not an option. It is here," Cuomo said during a noon news briefing Wednesday. "The only question is, do we regulate it here? Do we gather the revenue here? Or do we have people driving to New Jersey, which is right there, or to Massachusetts? ... This year we have to get it done."

Momentum for marijuana legalization became real when Democrats took control of the State Senate in the 2018 election, ending a long run of Republican control of the upper house of the State Legislature. But negotiations between Cuomo and legislators failed in 2019 over disputes about revenue distribution -- Cuomo wanted a large share to go to the state's general fund, which he controls.

Talks last year barely started when the COVID-19 pandemic halted them. This year, with Democrats now holding supermajorities in each house capable of overriding a gubernatorial veto, Cuomo shifted his position to allow more of the tax revenue to be earmarked for specific purposes.

Here are some of the details of a bill lawmakers may vote on soon to legalize marijuana:

— Recreational and medical marijuana would be regulated by a new Office of Cannabis Management within the State Liquor Authority.

— Five types of licenses would be issued: Cultivator, processor, distributor, dispensary and consumption site.

— Home grown allowed: Each person could have to three mature plants and three immature plants, whether indoors or outdoors, with a maximum of 12 total plants per household.

— Localities can't overrule residents' rights to consume or grow marijuana but could prohibit or regulate retail and delivery, as well as "social consumption sites."

— A large share of tax revenue would be allocated to an education, drug treatment and a "community grants reinvestment fund" to help community unfairly impacted by historical unequal enforcement of drug laws.

— Sales of cannabis hemp flower products would be allowed.

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