The recently legalized New York market is expected to become one of the largest in the country with projected revenues of nearly $2.5 billion by the program’s fourth year.
Legalization will generate an enormous economic impact in New York, which is struggling with a multibillion-dollar budget deficit.
A legal cannabis market will create tens of thousands of jobs and provide huge opportunities for companies that provide equipment and services to the industry.
Main aspects of the New York cannabis reform:
Boost to medical cannabis
The bill includes provisions to strengthen the medical cannabis market, with additional dispensaries, additional patient access and more products.
Experts have been concerned that the medical cannabis supply chain isn’t robust enough to satisfy the pent-up demand for both medical cannabis and adult-use products and curb the illicit market, especially in New York City.
In addition to being allowed to operate three adult-use stores apiece, co-locating them with three of their medical cannabis dispensaries, medical cannabis operators could double their current number of dispensaries from four to eight, provided two are in unserved or underserved areas.
Focus on social equity
The bill has a stated goal to issue 50% of adult-use licenses to social and economic equity applicants.
The equity programs would provide grants, low-interest loans and incubator programs to benefit individuals from disproportionately affected communities as well as small farmers.
Microbusinesses would be allowed to have vertical operations. The bill prohibits vertical integration for other licensees in effort to protect the adult-use sector from being controlled by large operators.
Taxes, local opt-outs
Cannabis products would be taxed at 13%, of which 9% would go to the state and 4% to localities.
An additional tax would be imposed on production as follows: 0.5 cents per milligram for flower, 0.8 cents per milligram for concentrated cannabis and 3 cents per milligram for edibles.
Forty percent of the state tax revenue would be reinvested in communities disproportionately impacted by the war on drugs, 40% to schools and public education and 20% to drug treatment and prevention.
Cities, towns and villages could opt out of retail sales.
Regulation and oversight
The measure establishes an Office of Cannabis Management with an executive director, a chief equity officer and a five-member board.
The office would have the authority to evaluate license applications using metrics such as social equity status, commitment to environmentally sound practices, public health and fair labor practices.
Source: Marijuana Business Daily
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