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The State of Cannabis Banking at a Pivotal Moment in the Industry: Q&A with Safe Harbor Services’ Amanda McComb

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The SAFE Banking Act is back in Congress, and political momentum is swinging in favor of the cannabis industry’s need to normalize its relations with financial institutions.

Safe Harbor Services’ credit union banked $3 billion in cannabis funds last year, part of a vast but fairly under-the-radar ecosystem where businesses are building rapport with smaller independent financial institutions like regional credit unions. There’s a lot to know to make sure that it’s a productive relationship, and federal reform is only one piece of the puzzle. Much of the work falls to the cannabis business, of course.

Here, we spoke with Safe Harbor Services Vice President Amanda McComb about some of the recent trends and changes that she’s seen in banking the cannabis industry.

Eric Sandy: Could provide a bit of a biographical sketch of Safe Harbor, as of early 2021, and the scope of how the business is interacting with cannabis businesses?

Amanda McComb: We started our cannabis banking program in 2015 and have since gone through 15 state and federal exams. So, it’s been a long haul, most specifically just for the cannabis program to make sure that we were staying in compliance and doing it in a safe and sound way. We also started a national [cannabis] program back in 2017. A lot of our clients that we bank here in Colorado were going out of state, and we wanted to follow them out of state because it’s really important for us to see all of their business—to be able to stand in front of the money and say that they’re legitimate businesses and that they’re operating within compliance, within their regulations. So, we started following them out of state and realized really quickly that we couldn’t be the only financial institution to bank the nation as a whole. We started working with other financial institutions to give them a compliance program that had obviously gone through multiple exams and had feedback from our regulators that we’d really tried to fine-tune.

So, we have about seven or eight different financial institutions that we work with throughout the nation. Here in 2021 we’re actually consolidating all of our cannabis-related initiatives into a new company called Safe Harbor financial. It’s combining those relationships with financial institutions and our relationships with cannabis clients and putting it all together in one company and then expanding the services that we offer to the industry. We’re working on lending and other initiatives to support the industry and bring them more normalized banking, because, as I’m sure you know, they just haven’t had a lot of normalized banking or lending or investments. The CEO of [Safe Harbor’s] credit union is essentially stepping down from the credit union and running this new company, focusing all of her efforts on all things cannabis-related and then moving into other ventures like virtual currencies and things that might be of use to the cannabis space at some point.

ES: What are some of the common misconceptions that Safe Harbor has run into? Are there certain banking-related questions that cannabis businesses are bringing to you that they haven’t fully grasped yet?

AM: As the cannabis industry gets more normalized and more states pass regulations surrounding cannabis, there’s the misconception that it could just be a regular bank account or a regular business account. Unfortunately, like we saw with the 15 state and federal exams, it just can’t be a normal business account at this point. Even if the SAFE Banking Act were to pass, it’s still so close to that black market history. There is still a pull because it’s so expensive to be in the cannabis space—especially places like California where they had cannabis before they really had regulations.

Trying walk that back and put regulations on these companies that have been selling for some time is expensive and labor-intensive for the companies. When they go to get a bank account, we’re very intrusive and we always consider ourselves the nosiest bankers around because we have had to ensure that they are legitimate businesses. There’s just so much compliance that has to happen on our end in order to protect the financial system as a whole, that it is more expensive. We can’t offer the variety of products that we could offer, quote unquote, normal businesses or normalized businesses.

ES: On the due diligence side of the conversation, what are some ways that these cannabis businesses might help prepare to work with a financial institution?

AM: We collect a lot of the same data that they would provide to get their license with their state. If they’re very organized and keep all of that together, it’s a good place for us to start. Having sophisticated or at least up-to-par bookkeeping and accounting [helps], so that we can look through their financials—specifically if they haven’t been banked. That’s one of the hardest parts: trying to prove that the funds that they’ve earned when they were unbanked are legitimately earned in their state. Having solid records so that we have something to rely upon when our regulators come in and ask, “How do we know that these are legitimate funds?” is important.

ES: Going back to those 15 state and federal exams, could you elaborate on what that looks like? And do those exams differ from state to state in any substantial way?

AM: Typically, a financial institution will be on a 12-month to 18-month exam schedule, and when we started our program, it was a lot of education for us and the regulators. It was a lot of discussion of what cannabis banking looks like. Not a lot of our regulators had experience in financial institutions that banked cannabis. The exams were very collaborative in us trying to figure out the safest way to bank this and to not make it impossible for the cannabis industry to bank—but also to ensure safety and soundness for our institution and for the financial system as a whole. It was a lot of back and forth, collaborative efforts that actually prompted us to develop our own compliance software in-house that we, from all of the feedback that we were getting from regulators, were able to streamline and male as easy as possible.

ES: One of the questions we’ve gotten pretty frequently over the years is from cannabis business owners trying to find credit unions who are willing to work with them in the cannabis space at all. So, how can credit unions signal to the cannabis industry that they’re open to this business, and how do these relationships start?

AM: At this point, what I’ve seen is it’s a lot of word of mouth. A lot of financial institutions are hesitant to come out publicly and say that they are banking cannabis because it does bring additional scrutiny. It can also be a reputation risk with our peers and with vendors that we work with. In my world, cannabis is more normalized just because I’ve had a front seat to it, but in talking to other financial institutions, they tend to be a lot more conservative with their risk. A lot of times it’s word of mouth between clients, which can be difficult because a lot of them are under NDAs with financial institutions. Some of it is just seeing the checks, if you’re getting checks from [financial] institutions. That’s not always super reliable, because the institution might not know that they’re banking cannabis necessarily.

There are some things to keep in mind, though, as the cannabis industry is looking for bank accounts and really investigating the financial stability of the institutions. Most of that is publicly available information. A lot of institutions, especially smaller institutions, think that cannabis will be the solution to their financial problems or the recessionary possibility. Sometimes, those are the ones that go out of business quickly because they just don’t have the capacity to handle all the compliance that’s necessary. So, it’s on the cannabis industry to do a little research on the financial institutions that they start to work with.

ES: Given that, what were some of the prime movers for Safe Harbor, years ago, to be willing to step into this space?

AM: The biggest one was community safety. When we started talking to the industry, a lot of Colorado was unbanked. We were hearing stories about these entrepreneurs who hadn’t been in a cash-intensive space. Working in a financial institution, we understand the risks of cash. We go through robbery trainings. A lot of my coworkers have been through robberies. So, we understand that level of risk. And when you’re talking to the industry and they’re going to ATMs late at night, shoving cash in ATMs and doing payroll in cash, the risk that we saw was very intimidating. We wanted to help in the sense of providing a place to put their cash—and they wouldn’t have to manage it. The other thing is, credit unions were really founded to bank the underbanked and serve the underserved. There didn’t really seem to be a more modern version of that than the cannabis industry, especially as they were being shut out of financial institutions and having to operate in cash. Those two are large driving forces for why we got into the industry.

ES: From your perspective, what sort of trends are you watching out of Washington—or what sort of aspects of federal reform, maybe in the SAFE Banking Act, are you looking for that would be legitimately helpful for the industry?

AM: The SAFE Banking Act will be helpful to institutions that are still willing to take on something that would be high-risk. FinCEN [The Financial Crimes Enforcement Network] is our ultimate regulator. I’m hoping that if something federally passes like the SAFE Banking Act, then FinCEN can respond and give us more detailed guidance on what they’re specifically looking for in cannabis banking. They do have a guidance for us. It’s from 2014, so it’s a little outdated, especially with how fast the industry is moving at this point. It allows for institutions to come in and bank [the industry] without being prosecuted, just because it’s cannabis. Right now, with anti-money-laundering rules and BSA, what we’re doing could be determined as money laundering since it’s federally illicit funds.

So, a lot of working with our regulators was really being able to stand in front of that money and say, “No, this was legitimately earned in my state, and we are doing the best effort or a good faith effort to ensure compliance and ensure that it’s all legitimate.” That side probably won’t go away. While it does open the door for institutions to get in, they still are going to have to have the compliance resources to still stand up and say, “This isn’t from the black market. It is legitimate money,” even if the SAFE Banking Act passes.

It’s an interesting discussion to have with financial institutions, because most of us are federally insured and it is a complicated conversation to have. It’s not just the cannabis space where we’re looking for money laundering and things like that, but it does have those close ties to the black market. We’re just a few years outside of it, you know?

ES: California and Colorado have come up, but, just in terms of geographic scope, are there any major differences in how banking regulations are playing out in newer cannabis markets, like an Ohio or a Florida?

AM: With a lot of the newer states coming up, it’s an interesting change in banking because a lot of our initial due diligence changes. We aren’t trying to show legitimacy to their funds, because a lot of times it’s just investment funds or owner contributions to get these licenses off the ground. With the newer markets, the initial due diligence is typically a bit easier because they’re going through the licensing process, so they have all the documents handy. There isn’t a lot for us to go in and validate. A lot of the states have learned from some of the mistakes that California and Colorado and Oregon and Washington and all of us made initially getting into it.

A lot of the newer states are a little bit easier. It’s funny, though, because a lot of [the new cannabis businesses] are the ones that think that it should be normalized banking because they just haven’t had that history of not having banking. What’s also interesting is new states like Florida and Michigan and others, they have very sophisticated backing. There’s Fortune 500 and there’s a lot of this sophistication in their management and control. It’s different from some of the mom-and-pop shops that we saw initially, and it’s very fascinating to see where the industry is going as far as being publicly traded in Canada and all of the international aspects that are coming into the cannabis industry.

 

New Mexico Legislature Passes Adult-Use Cannabis Bill, Which Now Awaits Gov. Lujan Grisham’s Signature

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This is a developing story. It has been updated to reflect the Senate’s amended passage of House Bill 2 at 8:30 p.m. Mountain Time March 31.

The New Mexico Legislature worked overtime, but adult-use cannabis legalization is now steered toward Democrat Gov. Michelle Lujan Grisham’s desk after the House and Senate voted to pass legislation during a special session March 31.

The lower chamber cleared the three-time amended adult-use bill, 38-32, Wednesday afternoon, while the upper chamber added one more amendment before passing the bill, 22-15, Wednesday night on the Senate floor, where the bill previously stalled during the legislature’s 60-day regular session that concluded March 20, which sparked Lujan Grisham’s call for the special session.

The House reconvened shortly after the Senate’s passage to approve the upper chamber’s amendment to the bill, officially sending it to Lujan Grisham for signing—with her ink, New Mexico will become the 18th state to legalize adult-use cannabis.

One key amendment adopted in special session House Bill 2, which was a continuation of H.B. 12, the Cannabis Regulation Act that the body passed Feb. 26, includes raising the excise tax on cannabis products from 12% to 18% over the course of six years, beginning in 2024, according to chief sponsor Rep. Javier Martinez (D). Under the bill, roughly 4% of the excise tax would be distributed back to the local communities where the cannabis is sold, whether it’s a city or county municipality, Martinez said on the floor Wednesday.

The House Tax Committee approved the amended excise tax portion of the bill during the first day of the special session on March 30.

“As we embark on building a brand-new industry and we get to set the rules of the game for how this industry will play out … this is a good opportunity to actually raise revenue,” Martinez said. “If we’re going to do this, we might as well get the most we can get without overdoing it to the point where we are maybe undercutting our efforts to get rid of the illicit markets. So, that’s the number we settled on—18% excise tax.”

According to Martinez, economic projections indicate that adult-use legalization would create more than 11,000 jobs and generate $28.6 million in tax revenue in the first year of implementing a program, which H.B. 2 aims to activate no later than April 1, 2022.

Another amendment to H.B. 2 directs 100% of revenue distributions to the state’s general fund, Martinez said on floor.  

“We heard from members of both parties; we heard from members of both chambers that earmarking dollars at this stage of the game, when the framework isn’t even legalized, when revenue isn’t even coming in yet, was not a good idea,” he said. “And, so, we’ve conceded that point. We removed all specialty funds that we had created under the legislation. That’s not to say those funds will not come back.”

Martinez said he’s committed to ensuring those funds are established through legislation in the next regular session, particularly a rural equity fund that provides rural communities that would want to join the industry access to capital and business development support mechanisms. 

Meanwhile, several main proposals of the adult-use bill remained intact, such as allowing adults 21 and older to possess no more than 2 ounces of cannabis, 16 grams of cannabis extract or 800 milligrams of edible cannabis. Adults will be allowed to grow up to six immature plants and six matures plants per household for personal use. The bill also creates 10 license types, ranging from the needs of large-scale vertically integrated companies to small-scale microbusinesses.

Additional foundational principles of the bill include protecting and enhancing New Mexico’s medical cannabis program as well as ensuring social justice when it comes to providing reinvestments toward communities disproportionately affected by prohibition, Martinez said.

During the first day of the special session in the upper chamber, the Senate Judiciary Committee added 11 amendments to an accompanying Senate Bill 2, an expungement measure for certain low-level cannabis arrests and convictions. The next day, on Wednesday, S.B. 2 passed full-body votes in the Senate, 23-13, and the House, 41-28.

According to S.B. 2, those serving jail time for cannabis-related offenses would have their cases reviewed by corrections officials within 30 days following the effective date of the Democrat-sponsored bill. In addition, the bill states by April 1, 2022 the New Mexico Department of Public Safety shall review the public records in the state’s criminal history databases and identify all past convictions that are potentially eligible for recall, dismissal and expungement.

The legislature’s passage of the adult-use cannabis and cannabis expungement bills won’t be the end of cannabis regulation in New Mexico; it will only be the beginning, said Sen. Katy Duhigg (D), who sponsored S.B. 2.

“I know that there are going to be a lot of additional improvements in the future going forward,” she said Wednesday night on the Senate floor. “But what we have now in House Bill 2 is a solid framework to be able to make a change in our state that is a long time coming.”

Martinez, who has introduced legalization bills four times to House endorsements without final approval, said the adult-use bill passed on Wednesday has been “written, rewritten and amended.”

Nearly 75% of New Mexicans approve of cannabis legalization with provisions in place to ensure tax revenue is reinvested back into communities, including 94% of Democrats, 93% of Independents and 46% of Republicans, according to the Drug Policy Alliance.

Lujan Grisham has expressed support of adult-use cannabis legalization, saying it is one of the best moves to make in an effort to build a bona fide 21st century economy in New Mexico. She is expected to put pen to paper for H.B. 2 and S.B. 2 on April 1.  

“I am grateful to those legislative leaders and members who have expressed enthusiasm about returning to the people’s work so soon after a challenging 60-day session,” she said in a press release when she called the special session.

“The unique circumstances of the session, with public health safeguards in place, in my view prevented the measures on my call from crossing the finish line,” Lujan Grisham said. “While I applaud the legislature and staff for their incredible perseverance and productivity during the 60-day in the face of these challenges, we must and we will forge ahead and finish the job on these initiatives together for the good of the people and future of our great state.”

New Mexico House Passes Adult-Use Cannabis Bill in Special Session; Senate Passes Expungement Measure

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The New Mexico Legislature is working overtime, but adult-use cannabis legalization is now closer to reaching Gov. Michelle Lujan Grisham’s desk after the House passed an amended bill and the Senate took up an expungement measure during a special session March 31.

The lower chamber cleared the adult-use bill, 38-32, while the expungement measure for certain low-level cannabis convictions drew a 23-13 vote in the Senate, where the overall bill previously stalled during the legislature’s 60-day regular session that concluded March 20, which sparked Lujan Grisham’s call for the special session.

One key amendment adopted in House Bill 2, which was a continuation of H.B. 12, the Cannabis Regulation Act that the body passed Feb. 26, includes raising the excise tax on cannabis products from 12% to 18% over the course of six years, beginning in 2024, according to chief sponsor Rep. Javier Martinez. Under the bill, roughly 4% of the excise would be distributed back to the local communities where the cannabis is sold, whether it’s a city or county municipality, Martinez said on the floor Wednesday.

The House Tax Committee approved the amended excise tax portion of the bill during the first day of the special session on March 30.

“As we embark on building a brand-new industry and we get to set the rules of the game for how this industry will play out … this is a good opportunity to actually raise revenue,” Martinez said. “If we’re going to do this, we might as well get the most we can get without overdoing it to the point where we are maybe undercutting our efforts to get rid of the illicit markets. So, that’s the number we settled on—18% excise tax.”

According to Martinez, economic projections indicate that adult-use legalization would create more than 11,000 jobs and generate $28.6 million in tax revenue in the first year of implementing a program, which H.B. 2 aims to activate no later than April 1, 2022.

Another amendment to H.B. 2 directs 100% of revenue distributions to the general fund, Martinez said on floor.  

“We heard from members of both parties; we heard from members of both chambers that earmarking dollars at this stage of the game, when the framework isn’t even legalized, when revenue isn’t even coming in yet, was not a good idea,” he said. “And, so, we’ve conceded that point. We removed all specialty funds that we had created under the legislation. That’s not to say those funds will not come back.”

Martinez said he’s committed to ensuring those funds are established through legislation in the upcoming session, particularly a rural equity fund that provides rural communities that would want to join the industry access to capital and business development support mechanisms. 

Meanwhile, several main proposals of the adult-use bill remained intact, such as allowing adults 21 and older to possess no more than 2 ounces of cannabis, 16 grams of cannabis extract or 800 milligrams of edible cannabis. Adults will be allowed to grow up to six immature plants and six matures plants for personal use. The bill also creates 10 license types, ranging from the needs of large-scale vertically integrated companies to small-scale microbusinesses.

Additional foundational principles of the bill include protecting and enhancing New Mexico’s medical cannabis program as well as ensuring social justice when it comes to providing reinvestments toward communities disproportionately affected by prohibition, Martinez said.

During the first day of the special session in the upper chamber, the Senate Judiciary Committee added 11 amendments to accompanying S.B. 2, the expungement measure that, as previously stated, passed the full body vote earlier in the day March 31.  

Both legislative bodies are scheduled to reconvene later in the day Wednesday, in an effort to continue working toward sending the adult-use legislation to Lujan Grisham’s desk.

“I am grateful to those legislative leaders and members who have expressed enthusiasm about returning to the people’s work so soon after a challenging 60-day session,” she said in a press release when she called the special session.

“The unique circumstances of the session, with public health safeguards in place, in my view prevented the measures on my call from crossing the finish line,” Lujan Grisham said. “While I applaud the legislature and staff for their incredible perseverance and productivity during the 60-day in the face of these challenges, we must and we will forge ahead and finish the job on these initiatives together for the good of the people and future of our great state.”

New York Legalizes Adult Use Cannabis

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On March 31, 2021, New York Governor Andrew Cuomo signed The Marijuana Revenue and Taxation Act (MRTA) into law, legalizing adult use, home cultivation and possession of cannabis for adults over 21 immediately. Upon signing the bill this morning, previous cannabis-related convictions are automatically expunged, according to the Governor.

The bill establishes the Office of Cannabis Management, which will launch and manage the regulatory system for the commercial cannabis market in New York.

According to Steve Schain, senior attorney at Hoban Law Group, the Office of Cannabis Management will have a five-member board that will oversee not just the adult use cannabis market, but also medical cannabis as well as the state’s hemp market. For the medical market, the new legislation provides for more patient caregivers, home cultivation and an expanded list of qualifying conditions.

New York Governor Andrew Cuomo
Image: Chris Rank, Flickr

Troy Smit, deputy director of the New York NORML chapter, says the bill might not be perfect, but it’s a massive win for the cannabis community. “It’s taken a great amount of work and perseverance by activists, patients, and consumers, to go from being the cannabis arrest capital of the world, to lead the world with a legalized market dedicated to equity, diversity, and inclusion,” says Smith. “This might not be the perfect piece of legislation, but today, cannabis consumers can hold their heads high and smell the flowers.”

The MRTA sets up a two-tier licensing structure that separates growing and processing licenses from dispensary licenses. The bill includes a social equity aspect that requires 50% of the licenses to be awarded to, “minority or women-owned business enterprise, service-disabled veterans or distressed farmers,” says Schain.

New York City
Image: Rodrigo Paredes, Flickr

Melissa Moore, New York State director of the Drug Policy Alliance, says she’s proud of the social equity plan the bill puts in place. “Let’s be clear — the Marijuana Regulation and Taxation Act is an outright victory for the communities hit hardest by the failed war on drugs,” says Moore. “By placing community reinvestment, social equity, and justice front and center, this law is the new gold standard for reform efforts nationwide. Today we celebrate, tomorrow we work hard to make sure this law is implemented fairly and justly for all New Yorkers.”

Schain says the new tax structure in the bill shifts to the retail level, with a 9% excise tax and 4%-of-the-retail-price local excise tax (split 25%/75% between the respective counties and municipalities). Revenue from cannabis taxes will enter a fund where 40% will go to education, 40% to community grants reinvestment fund and 20% to drug treatment and public education fund.

It appears that businesses already established in New York’s medical market get a head start on the new adult use market, while other businesses enter the license application process, according to Schain. “Although the existing Medical Marijuana licensees should be able to immediately to sell Adult-Use Cannabis, it will take up to two years for the New York’s Adult Use Program to launch and open sales to the public,” says Schain.

Oklahoma to Revise Medical Cannabis Statute

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New York’s S.B. S854 would provide the regulatory framework for adult-use cannabis, construct a licensing and taxation system for adult-use sales, create a social and economic equity program to assist individuals unfairly targeted and impacted by cannabis enforcement and expand the state’s existing medical cannabis and hemp programs, as noted in a press release on the New York state government website.

Cuomo’s administration projects that legalization could generate 30,000 to 60,000 jobs across New York and that tax collection from the program could reach $350 million annually, the release states.

“For generations, too many New Yorkers have been unfairly penalized for the use and sale of adult-use cannabis, arbitrarily arrested and jailed with harsh mandatory minimum sentences. After years of tireless advocacy and extraordinarily hard work, that time is coming to an end in New York state,” Cuomo said. “Legalizing adult-use cannabis isn’t just about creating a new market that will provide jobs and benefit the economy — it’s also about justice for long-marginalized communities and ensuring those who’ve been unfairly penalized in the past will now get a chance to benefit. I look forward to signing this legislation into law.”

According to the release, New York’s Cannabis Regulation and Taxation Act contains the following provisions:

  • The Office of Cannabis Management would be required to enforce a comprehensive regulatory framework regarding adult-use, medical and cannabinoid hemp, governed by a five-member board, with three members appointed by the governor, one appointed by each house. 
  • It would increase the number of allotted caregivers per patient, allow home cultivation of medical cannabis for patients and permit people with a substantial list of medical conditions to access medical cannabis.
  • The agreement would establish a two-tier licensing structure that would allow for an extensive range of producers by separating processors and growers from owning licensing stores.
  • It would establish a social and economic equity plan to assist individuals impacted by cannabis enforcement. It would also create a goal to have 50% of licenses go to a minority or women-owned business enterprise, service-disabled veterans or distressed farmers.
  • The legislation proposes to establish a new cannabis tax structure. The wholesale excise tax would be moved to the retail level with a 9% state excise tax, the local excise tax would be 4% of the retail price, and counties would receive 25% of the local retail tax revenue with 75% going to the municipality. 
  • The agreement would also permit the sale of hemp flower and smokable hemp forms only when adult-use stores are operating.
  • The agreement would allow for adults 21 years and older to possess up to 3 ounces of cannabis and 24 grams of cannabis concentrate outside of their home.
  • The legislation proposes permitting individuals 21 years and older to grow three mature and three immature plants for personal use, with up to six mature and six immature plants per household.

Local governments are permitted to opt-out of retail dispensaries or on-site consumption licensing by Dec. 31, 2021, or nine months after the date the legislation is effective, the release states.

“My goal in carrying this legislation has always been to end the racially disparate enforcement of marijuana prohibition that has taken such a toll on communities of color across our state and to use the economic windfall of legalization to help heal and repair those same communities,” said Sen. Liz Krueger, the primary sponsor of the bill and chair of the Senate Finance Committee, in a March 27 press release. “When this bill becomes law, New York will be poised to implement a nation-leading model for what marijuana legalization can look like.”

Melissa Moore, New York state director for the Drug Policy Alliance commended Sen. Krueger and other lawmakers for making “marijuana reform almost a reality in New York state.”

“Advancing legalization in NY also puts another nail in the coffin of the war on drugs that has devastated so many communities across the state,” Moore said in a press release. “By comprehensively addressing the harms of past criminalization, this legislation will create one of the most ambitious marijuana legalization programs in the country. We will continue to work with lawmakers to ensure the best possible outcome for all New Yorkers and look forward to the legislature swiftly passing the bill and the governor’s signature on these historic reforms.”

Lawmakers could vote on the legislation as early as Tuesday. If passed, it would take effect immediately; however, adult-use sales could take up to two years to begin, as reported by the Associated Press.

According the March 27 press release from Krueger, here are what various stakeholders in New York’s adult-use legalization landscape had to say:

Michael Sisitzky, Senior Policy Counsel at NYCLU, said: “New Yorkers have spoken in the streets and at the polls: they demanded that lawmakers dismantle systemic racism, and that begins with how we legalize marijuana. At long last, the legislation announced today will ensure a diverse and inclusive legal marijuana industry and reinvest in the communities of color that have been devastated by the war on drugs, mass incarceration and a legacy of disproportionate arrests for drug possession. The time is now for lawmakers in Albany to repair the damage to Black and Brown New Yorkers whose lives have been needlessly destroyed by racist drug policies across our state for far too long. We expect the legislature to pass this overdue legislation and for Gov. Cuomo to step up, stop the harm and sign it into law without delay.”

Marvin Mayfield, Lead Organizer at Center for Community Alternatives, said: “Finally, we are on the verge of ending a cruel chapter in New York’s racist and devastating war on drugs. Marijuana criminalization has wrought decades of harm on our families and communities. We are proud of the thousands of impacted New Yorkers who have fought for a true end to criminalization, community reinvestment and equity and we applaud the legislators who stood beside us. Now, we call for swift passage by the legislature and a signature by the governor to make this national model a reality.”

Alice Fontier, Managing Director of Neighborhood Defender Service of Harlem, said: “Today’s victory is a massive step towards ensuring that marijuana legalization in New York reckons with the hideous, racist legacy of criminalization. Since NDS began our work in Harlem 30 years ago, the neighbors we serve have been persecuted under marijuana criminalization for little more than the color of their skin and the amount of money in their bank accounts. Police, prosecutors, child services and ICE have used criminalization as a weapon against them, and the impact this bill will have on the lives of our over-surveilled clients cannot be overstated. We are grateful to the advocates, legislators and impacted people who insisted that legalization reckon with the damage wrought by the war on drugs and ongoing criminalization. We join our neighbors in celebrating this massive step towards racial and economic justice.”

 

Resource Innovation Institute Releases First-of-its-Kind Handbook for Utilities and Efficiency Program Implementers Serving Cannabis Cultivators

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New York’s S.B. S854 would provide the regulatory framework for adult-use cannabis, construct a licensing and taxation system for adult-use sales, create a social and economic equity program to assist individuals unfairly targeted and impacted by cannabis enforcement and expand the state’s existing medical cannabis and hemp programs, as noted in a press release on the New York state government website.

Cuomo’s administration projects that legalization could generate 30,000 to 60,000 jobs across New York and that tax collection from the program could reach $350 million annually, the release states.

“For generations, too many New Yorkers have been unfairly penalized for the use and sale of adult-use cannabis, arbitrarily arrested and jailed with harsh mandatory minimum sentences. After years of tireless advocacy and extraordinarily hard work, that time is coming to an end in New York state,” Cuomo said. “Legalizing adult-use cannabis isn’t just about creating a new market that will provide jobs and benefit the economy — it’s also about justice for long-marginalized communities and ensuring those who’ve been unfairly penalized in the past will now get a chance to benefit. I look forward to signing this legislation into law.”

According to the release, New York’s Cannabis Regulation and Taxation Act contains the following provisions:

  • The Office of Cannabis Management would be required to enforce a comprehensive regulatory framework regarding adult-use, medical and cannabinoid hemp, governed by a five-member board, with three members appointed by the governor, one appointed by each house. 
  • It would increase the number of allotted caregivers per patient, allow home cultivation of medical cannabis for patients and permit people with a substantial list of medical conditions to access medical cannabis.
  • The agreement would establish a two-tier licensing structure that would allow for an extensive range of producers by separating processors and growers from owning licensing stores.
  • It would establish a social and economic equity plan to assist individuals impacted by cannabis enforcement. It would also create a goal to have 50% of licenses go to a minority or women-owned business enterprise, service-disabled veterans or distressed farmers.
  • The legislation proposes to establish a new cannabis tax structure. The wholesale excise tax would be moved to the retail level with a 9% state excise tax, the local excise tax would be 4% of the retail price, and counties would receive 25% of the local retail tax revenue with 75% going to the municipality. 
  • The agreement would also permit the sale of hemp flower and smokable hemp forms only when adult-use stores are operating.
  • The agreement would allow for adults 21 years and older to possess up to 3 ounces of cannabis and 24 grams of cannabis concentrate outside of their home.
  • The legislation proposes permitting individuals 21 years and older to grow three mature and three immature plants for personal use, with up to six mature and six immature plants per household.

Local governments are permitted to opt-out of retail dispensaries or on-site consumption licensing by Dec. 31, 2021, or nine months after the date the legislation is effective, the release states.

“My goal in carrying this legislation has always been to end the racially disparate enforcement of marijuana prohibition that has taken such a toll on communities of color across our state and to use the economic windfall of legalization to help heal and repair those same communities,” said Sen. Liz Krueger, the primary sponsor of the bill and chair of the Senate Finance Committee, in a March 27 press release. “When this bill becomes law, New York will be poised to implement a nation-leading model for what marijuana legalization can look like.”

Melissa Moore, New York state director for the Drug Policy Alliance commended Sen. Krueger and other lawmakers for making “marijuana reform almost a reality in New York state.”

“Advancing legalization in NY also puts another nail in the coffin of the war on drugs that has devastated so many communities across the state,” Moore said in a press release. “By comprehensively addressing the harms of past criminalization, this legislation will create one of the most ambitious marijuana legalization programs in the country. We will continue to work with lawmakers to ensure the best possible outcome for all New Yorkers and look forward to the legislature swiftly passing the bill and the governor’s signature on these historic reforms.”

Lawmakers could vote on the legislation as early as Tuesday. If passed, it would take effect immediately; however, adult-use sales could take up to two years to begin, as reported by the Associated Press.

According the March 27 press release from Krueger, here are what various stakeholders in New York’s adult-use legalization landscape had to say:

Michael Sisitzky, Senior Policy Counsel at NYCLU, said: “New Yorkers have spoken in the streets and at the polls: they demanded that lawmakers dismantle systemic racism, and that begins with how we legalize marijuana. At long last, the legislation announced today will ensure a diverse and inclusive legal marijuana industry and reinvest in the communities of color that have been devastated by the war on drugs, mass incarceration and a legacy of disproportionate arrests for drug possession. The time is now for lawmakers in Albany to repair the damage to Black and Brown New Yorkers whose lives have been needlessly destroyed by racist drug policies across our state for far too long. We expect the legislature to pass this overdue legislation and for Gov. Cuomo to step up, stop the harm and sign it into law without delay.”

Marvin Mayfield, Lead Organizer at Center for Community Alternatives, said: “Finally, we are on the verge of ending a cruel chapter in New York’s racist and devastating war on drugs. Marijuana criminalization has wrought decades of harm on our families and communities. We are proud of the thousands of impacted New Yorkers who have fought for a true end to criminalization, community reinvestment and equity and we applaud the legislators who stood beside us. Now, we call for swift passage by the legislature and a signature by the governor to make this national model a reality.”

Alice Fontier, Managing Director of Neighborhood Defender Service of Harlem, said: “Today’s victory is a massive step towards ensuring that marijuana legalization in New York reckons with the hideous, racist legacy of criminalization. Since NDS began our work in Harlem 30 years ago, the neighbors we serve have been persecuted under marijuana criminalization for little more than the color of their skin and the amount of money in their bank accounts. Police, prosecutors, child services and ICE have used criminalization as a weapon against them, and the impact this bill will have on the lives of our over-surveilled clients cannot be overstated. We are grateful to the advocates, legislators and impacted people who insisted that legalization reckon with the damage wrought by the war on drugs and ongoing criminalization. We join our neighbors in celebrating this massive step towards racial and economic justice.”