Administration

The law establishes a five-member cannabis control board (“Board”) charged with setting standards and requirements for cultivation, processing, packaging, marketing and sale of cannabis products, among other things. The Board will also issue registrations, licenses and permits as required. The law also establishes an office of cannabis management (“Office”) to administer the program, and a state cannabis advisory board to advise and issue recommendations on the use of cannabis products and to administer the community grants reinvestment fund that is established by the Act. This fund will be used to reinvest in communities disproportionately affected by past state and federal drug policies.

Taxation

The Act also amends the Tax Law to impose taxes on distributors and retailers of cannabis products. Retail sales will be subject to a 13% tax. Taxes generated will be deposited in a state cannabis revenue fund. After deducting costs to administer the program, the remainder would be split between education (40%), community grants reinvestment fund (40%) and drug treatment and public education (20%).

Local Municipalities: Opt-Out and Zoning

Cities, towns, and villages may opt-out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses by passing a local law by December 31, 2021 or nine months after the effective date of the legislation. After that date, they will not be able to prohibit the establishment of retail dispensary licenses and/or on-site consumption licenses.

Municipalities cannot prohibit adult recreational use or adopt any law or ordinance that regulates the cannabis industry. Municipalities can amend zoning laws to address the time, place and manner of operation of licensed adult-use cannabis retail dispensaries and/or on-site consumption sites as long as those laws or regulations do not make the operation of those businesses unreasonably impractical as determined by the Board.

Sustainability and Environmental Protection

Protection of the environment and resilience to climate change are identified as two of the Legislature’s intentions for the Act. These priorities show up in several places in the Act. The Board has to establish regulations for the safe production of cannabis, including environmental and energy standards, as well as restrictions on the use of pesticides and best practices for uses of water and energy conservation.

The Board also has to develop regulations for use by the Office in assessing applications for adult-use cannabis licenses. Among the criteria set out in the Act are “the ability to increase climate resiliency and minimize or eliminate adverse environmental impacts, including but not limited to water usage, energy usage, carbon emissions, waste, pollutants, harmful chemicals and single use plastics.” Applicants for licenses should be prepared to demonstrate sustainable, environmentally friendly business practices. Cannabis is also added to the Clean Indoor Air Act, establishing where cannabis can be smoked or vaped.