We’re all familiar with New York City, that mess of concrete and high rises that holds the largest number of inhabitants of any US city. As a general liberal hotspot, in a generally liberal state, it’s almost surprising it took so long. But it’s finally happened. Recreational cannabis is now legal in New York. But that’s not all. In 24 hours, both New York and New Mexico became cannabis legal for recreational use.
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New York – 19.45 million inhabitants
New Mexico – 2.097 million inhabitants
What’s the news?
On Wednesday March 31, 2021, New York Governor Andrew Cuomo signed legislation officially making recreational cannabis legal in the state of New York. The new bill allows for adult-use, starting at the age of 21, and permits adult residents to have up to three ounces of cannabis, and up to 24 grams of concentrates. Each household will also be able to grow up to six mature cannabis plants, however this does not go into effect until 18 months after sales begin, possibly to get consumers used to buying before allowing them to grow for themselves, which will likely eat into official revenue numbers.
The bill, The New York State Cannabis/Marijuana Regulation & Taxation Act, passed as Senate Bill S854A, with a vote of 40 to 23, and then went on to the Assembly where it passed in a vote of 100 to 49. This vote was done in a late-night session Tuesday night. Cuomo made the following statement Wednesday upon signing: “This is a historic day in New York — one that rights the wrongs of the past by putting an end to harsh prison sentences, embraces an industry that will grow the Empire State’s economy, and prioritizes marginalized communities so those that have suffered the most will be the first to reap the benefits.”
The bill is not just meant for the people in New York, but for New York businesses as well. The new legislation creates a licensing system for producers and distributors. It also works to expunge convictions for crimes that would not be crimes anymore under the new legislation. Under the new law, a 13% sales tax will be applied at the point of sale.
…And then New Mexico did it too
About 24 hours later, on the night of Wednesday April, 1st, 2021, New Mexico’s legislature voted in the Cannabis Regulation Act, which is now expected to be signed by Governor Michelle Lujan Grisham. New Mexico actually has two bills, one which legalizes recreational cannabis use for those 21 and above, and a separate one which expunges criminal records received previously for cannabis crimes which are no longer crimes.
Regarding this aspect, the governor stated: This important legislation accompanies the legalization of cannabis and will ensure that New Mexico ends the harmful long-term impacts of cannabis conviction records, enabling New Mexicans to build better futures.”
The bill sets up a licensing and taxation system to regulate the production and sale of cannabis products. Retail sales are expected to start no later than April 2022, giving the state a year to set up its market. Under the new law, private citizens can have up to two ounces of cannabis, and are allowed to grow up to six plants in their homes. A final aspect of New Mexico’s bill which separates it from New York’s bill, is that New Mexico is not allowing local governments to choose not to have retail cannabis sales. In New York, that ability to opt-out is still there.
US States and cannabis
New York and New Mexico aren’t exactly breaking any records here. Neither is the first state to have a medical cannabis policy pass, that would be Virginia. And neither is the first state to develop a comprehensive legal medical cannabis bill, that was California. And certainly, neither are the first to legalize cannabis for recreational use, that designation goes to Washington and Oregon, which both legalized for recreational use at the end of 2012. There’s no ‘first’ here to be rejoicing over, but instead, the understanding that two of America’s states, including the home of America’s biggest city, just became pot friendly.
So where do New York and New Mexico stand then in the US landscape of cannabis legalization? Well, things have been changing quickly in the US, so much so that every article written on the subject is invalidated within a couple months tops. New York makes the 16th state to legalize recreational cannabis, and New Mexico the 17th, bringing the total to 19 locations with legal recreational marijuana policies including Washington DC, and Guam.
In terms of states, New York and New Mexico join: Alaska, California, Colorado, Illinois, Michigan, Massachusetts, Nevada, Oregon, Washington, Maine, Vermont, Arizona, Montana, South Dakota, and New Jersey. For anyone doing the math, that now makes up 34% of states with recreational legalization policies, and accounts for approximately 150 million people.
On a broader scale, when looking at ‘America’, it should be remembered that North America is made up of three countries: the US, Mexico, and Canada. Canada is already a federally legalized country for recreational cannabis, and Mexico’s court system also legalized cannabis recreationally by knocking down current legislation as unconstitutional, thus requiring new legislation which is due out at the end of this month.
As such, all North American countries have some amount of cannabis legalization. When widening the scope even further, we include South America, which is home to Uruguay, the first country in the modern world to legalize cannabis for recreational use. The continents of North and South America together make up the most cannabis friendly region of the world.
In both states where recreational cannabis was made legal, New York and New Mexico, there were strong sentiments of righting a social injustice. However, as with pretty much any location that legalizes, there is also a massive financial incentive.
As far as recreational cannabis being legal in New York, the governor’s office has previously stated that such an industry can create somewhere between 30,000 – 60,000 jobs, and bring in $350 million per year in tax revenue via the 13% sales tax. Tax revenue is already set to go to the New York State Cannabis Revenue Fund, with unused money being split between education, community grants, and drug treatment/public education, at a rate of 40%, 40%, and 20% respectively.
The tax breakdown goes as follows: it’s actually a 9% sales tax, with 4% local taxes added on. Then there’s a separate THC tax which adds on half a cent per mg of flower, and .8 cents per mg of concentrate. For edibles it tacks on three cents per mg.
When looking at New Mexico, there is also a great financial incentive. The Albuquerque Journal stated that the industry is predicted to bring in as much as $20 million for the state by 2023. Said Governor Grisham, “Workers will benefit from the opportunity to build careers in this new economy… Entrepreneurs will benefit from the opportunity to create lucrative new enterprises. The state and local governments will benefit from the additional revenue. Consumers will benefit from the standardization and regulation that comes with a bona fide industry.”
What this means for federal policy
Any location with separate governments for federal and state, are likely to at some point have the issue of one going up against the other. It can be seen in the EU, where different member states create policies that go against EU law, like when France went up against the EU over CBD sales. It can be seen in Australia, where Canberra is the only legal state for recreational cannabis use in an otherwise illegal country. And it can certainly be seen in the US, where out of 50 states, a third now allow recreational cannabis for legal adult use, including New York. So, how long can a federal policy stand as the states it governs change policy to go against it?
I haven’t seen a direct answer to this question, but it’s an important question. At what number of states with opposing laws, does the federal mandate no longer hold? Though there might not be a technical answer to this, the logic answer is that regardless of whether it would legally push a change to have a majority of states/people under legal policies in opposition to the federal law, it would certainly create some tension.
Perhaps the six states that have adopted legalization policies since the last election have now finally put enough pressure on the federal government to make some changes. After all, the last thing the federal government wants is to look weak against a whole bunch of state governments which are no longer complying with it.
Perhaps it was these recent legal updates that inspired Senate Majority Leader Chuck Schumer’s statement that this year the government would aim to pass sweeping legislation that would finally end the federal ban. This would act to instill regulated adult-use markets in every state and territory, and it would work to expunge all cannabis crimes that are no longer crimes without a ban.
While this is still a more liberal-centered movement, republicans are certainly feeling the burn in their voting populations, having to come to terms with the idea that their personal convictions for cannabis illegalization are not meshing with their voters’ desires for legalization. This push from constituents on the right, is helping to aid the left in pushing legislation for lifting the ban.
No one likes to look like an idiot in life, and its this sentiment that will likely be what pushes the US to federal cannabis legalization. It doesn’t want to look silly holding an empty federal law, while every state has its own opposing policy. My guess is that very soon the federal government is going to do a 180º, just to keep this from happening too intensely. In fact, I expect it will happen this year or next at the latest. With recreational cannabis being made legal in New York, that much more pressure has been put on the federal government to legalize the whole country.
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Disclaimer: Hi, I’m a researcher and writer. I’m not a medical professional, I have no formal legal education, and I’ve never been to business school. All information in my articles is sourced from other places, which are always referenced, and all opinions stated are mine, and are made clear to be mine. I am not giving anyone advise of any kind, in any capacity. I am more than happy to discuss topics, but should someone have a further question or concern, they should seek guidance from a professional in the relevant field for more information.