The battle for adult use in New York is spreading to the village

Adult cannabis use regimes vary across the country in terms of the level of local control they confer. In New York, most of the power will be in Albany. Under the Marihuana Regulation and Taxation Act (the “MRTA”), the Governor, Assembly and Senate appoint, license and appoint the Cannabis Control Board (the “CCB”), which regulates (in coordination with the Office of Cannabis Management) oversee the state cannabis program.

However, the MRTA left some of the powers to the municipalities. Cities, municipalities and villages can opt-out of the MRTA until December 31, 2021. This means that they can prohibit the establishment of retail pharmacies and consumption lounges on site within their borders. Communities that do not deregister by December 31, 2021 seal their participation in the MRTA’s licensing program for an indefinite period.

Photo by Kevork Djansezian / Getty Images

While it’s too early to be sure which way the local political winds are blowing, many cities in Westchester and Long Island have already declared their sworn opposition to the “devil’s salad” and both pharmacies and consumer lounges from their communities banished. Others take a “wait and see” approach. Elsewhere, the voters themselves will decide through a free referendum, either because city officials want to avoid political backlash or because offended voters have called a vote to outvote their elected officials.

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The decisions these cities make over the next six months will continue to have an impact in the years to come. The MRTA allocates 3% of all pharmacy and consumption lounge revenues to the communities they inhabit, so towns and villages that de-register lose a reliable source of tax. But that’s not all. Counties collect an additional 1% levy from all retail establishments within their borders and then distribute it to participating communities in proportion to their total share of the adult use program. Since even a modestly successful cannabis pharmacy can generate millions of dollars annually, the adult program provides local governments with a potentially productive source of local tax revenue.

The MRTA allows communities that opt ​​out now to re-enter later, and this has resulted in some cities now withdrawing in anticipation of being able to re-enter at a later date. However, attending later may not entitle a community to the financial benefits available today, u settling in hospitable communities are unlikely to relocate.

RELATED: Why Are So Many Communities Foregoing The Adult Cannabis Marketplace In Their State?

Accordingly, towns and villages should consider the very real possibility that by foregoing they will forever deprive themselves of a cannabis tax dividend that could help pay for parks, schools, and local infrastructure. They also make life harder for their cannabis-using citizens and provide an inadvertent boon to the illegal market.

Given the challenges facing cities and their citizens, we can only hope that common sense will prevail and that cities will choose the MRTA.

(For more information, contact Matt@dfmklaw.com and Julia@dfmklaw.com.)

This article originally appeared in Feuerstein Kulick’s monthly cannabis newsletter, The Leaflet, to which you can subscribe here. For more information, contact Rich at rich@dfmklaw.com or (201) 410-4737 or email The Leaflet at theleaflet@dfmklaw.com.