LOCAL NEWS

HALF OF NEW YORK

OPTS OUT OF POT INDUSTRY

About half of New York state’s towns have opted out of the nascent Cannabis industry, according to the Rockefeller Institute of Government. New York’s adult-use marijuana law, passed by the state legislature and signed into law by then-Governor Andrew Cuomo in the spring of 2021, established a December 31, 2021 deadline for jurisdictions to opt out of the recreational pot industry. Ultimately, about 49 percent of the state’s 1,521 towns decided against allowing dispensaries in their jurisdiction and 55 percent chose not to allow consumption sites.

While significant, there were far fewer opt outs in New York than in neighboring New Jersey, which reported 70 percent of its towns chose to ban the Cannabis industry.

According to industry insiders, most New York municipalities chose to opt out because they wanted more information about the state’s pot program before allowing it to move forward in their jurisdiction. So far, the state has failed to explain how local governments can regulate aspects of the industry like advertising and hours of operation for retailers.

Towns that chose to opt out are giving up their share of the tax revenue generated by legal Cannabis – local jurisdictions will receive 4 percent of the 13 percent excise tax on pot sales, with the other 9 percent going to the state. Towns that simply did nothing were automatically enrolled in the Cannabis industry.

Experts expect New York to become the second largest marijuana market in the country, after California, with projected sales estimated to bring in around $4.2 billion. However, towns that opted out are passing up on more than just pot tax revenue. Foot traffic is expected to rise in jurisdictions that allow retail pot sales or consumption sites, leading to an increase in business revenue

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in those towns. Likewise, real estate prices are expected to increase in those jurisdictions as home values rise.

Fortunately, the pot industry bans don’t last forever and towns can opt back in to the industry through a vote by local government. Additionally, opt outs only apply to dispensaries and consumption sites. Jurisdictions can’t opt out of marijuana cultivation and manufacturing by licensed businesses, and adults may legally possess and consume Cannabis regardless of their town’s opt out status.

SERIOUS CANNABIS CASH

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ew York state expects to take in $1.25 billion in marijuana tax revenue and fees over the first six years of retail sales. While the Empire State has yet to set a launch date for adult-use sales, the governor’s new N executive budget forecasts some serious Cannabis cash coming in, beginning in 2023.

Gov. Kathy Hochul’s administration anticipates a slow start for the industry, estimating just $56 million in pot revenue for 2023. That money is expected to come primarily from fees associated with launching the industry.

Naturally, officials forecast the real money rolling in when retail sales are finally established in New York. The budget report estimates the state will rake in Cannabis revenues of $95 million in 2024, $158 million in 2025, $245 million in 2026, $339 million in 2027 and a whopping $363 million in 2028.

Ultimately, the state decided on a 13 percent excise tax on Cannabis sales, with 4 percent going to local jurisdictions in which sales are made and 9 percent going to state coffers. Of the 9 percent of tax revenue diverted to the state, 40 percent will be used for education, another 40 percent will go toward community reinvestment and the remaining 20 percent of revenue will be used for drug treatment.

Additionally, New York has established a separate sliding scale tax that is based on pot potency, with higher THC products taxed at a higher rate. However, this tax only applies to pot products exchanged between distributors and retailers.

While the governor’s budget estimates are lower than previous projections for New York’s Cannabis industry, the difference can be explained by the state’s delay in launching retail sales. Earlier estimates called for the state to take in $245 million in revenue in 2024. The new budget still anticipates $245 million in revenue, however it now expects to first hit that number two years later, in 2026.

Gov. Hochul has managed to appoint key regulatory personnel – a necessary step in implementing the state’s pot program – but officials are taking longer than expected to create the industry’s rules and regulations, causing further delays. Based on a recent estimate provided by New York’s Cannabis Control Board, which creates the rules for and oversees the operation of the state’s marijuana industry, retail sales won’t begin until mid2023 at the earliest.

Marijuana With legal adult-use delivery, that money would be more likely to go to Maine Cannabis companies. Delivery would also prevent people from having to make long drives to the nearest retail shop, as well as increase access for elderly and disabled residents who haven’t obtained a medical Delivery in Maine? marijuana card. Cannabis delivery is a big issue in Maine, in part because just 10 percent of the state’s 500 towns and cities currently allow marijuana businesses – so A new bill introduced in Maine that would allow adult-use Cannabis delivery throughout the state is creating a heated debate. access to pot products is spotty. But while the

The measure would allow retail weed shops to deliver pot products issue appears to be a noto any jurisdiction in the state. This is a controversial proposal because brainer, opponents of the Photo by Rodnae Productions approximately 90 percent of Maine towns chose to opt out of the Cannabis legislation cite concerns about the rights of local governments to ban stuff. industry – banning pot sales in their jurisdiction and eschewing the Kate Dufour of the Maine Municipal Association believes the delivery bill accompanying tax revenue. would be the “first step in eroding the local control granted to municipal

Supporters of the bill, introduced by Rep. Joe Perry (D-Bangor), believe officials.” Opponents are also concerned that delivery would lead to pot that those opt outs are exactly why delivery is so important. With so much being overused and children being harmed (somehow). of the state unable to access adult-use Cannabis, legal deliveries could Delivery is specifically banned in Maine as legislators outlawed pot sales play a major role in keeping the black market at bay. As Rep. Perry points via vending machine, drive-thru, online platform and delivery service in a out, cutting off access to Cannabis doesn’t prohibit residents from using 2018 rewrite of the state’s original legalization bill. In Maine, a law must marijuana. But it does encourage people to spend their money on black specifically prohibit an activity – otherwise it is allowed. Because of this quirk, market buds. medical dispensaries are allowed to deliver marijuana to patients.

NO HOME GROW IN THE GARDEN STATE

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While New Jersey prepares to launch adult-use retail sales, officials remain adamant that the state will not allow home cultivation for recreational or medical Cannabis.

The Garden State legalized adult-use marijuana in early 2021. Unfortunately, the bill created by the legislature and signed into law by Governor Phil Murphy does not legalize home growing. And, according to State Senate President Nick Scutari (D-Union), lawmakers currently have no plans to add personal cultivation to New Jersey’s Cannabis law.

In January, Scutari told a group of marijuana industry experts that he “did not see [home growing] happening right now,” during a virtual event. Scutari, who was an outspoken supporter of legalization, explained, “I’m not against marijuana being grown at home for medical purposes and maybe even just recreational purposes … But we’ve got to let this industry … it’s not even off the ground yet.”

Scutari believes that personal cultivation would help the black market and could potentially prevent the state’s new legal industry from fully taking off. Many officials and analysts in New Jersey have voiced a similar opinion.

However, medical Cannabis patients believe home grows would help keep people from turning to the black market by providing an alternative to the expensive medicine sold at legal medical dispensaries.

Interestingly, New Jersey is one of just three states that have legalized marijuana and still prohibits any unlicensed Cannabis cultivation for adultuse – with Illinois and Washington state also barring recreational home grows. However, New Jersey stands alone as the only state that has legalized marijuana and continues to ban home cultivation for medical patients.

Despite Cannabis being legal in New Jersey, growing a single plant at home could still result in prison time and substantial fines – even for registered pot patients.

New Jersey has yet to set a launch date for retail sales. While the state is expected to become a major marijuana marketplace, 70 percent of its municipalities chose to opt out of allowing the Cannabis industry in their jurisdiction.

>> Continued from pg. 13 WILL CONNECTICUT

HAVE ENOUGH CANNABIS?

s Connecticut prepares to launch retail Cannabis sales, officials are attempting to figure out if the state will have enough pot.A

This is the quintessential question every state must ask as it prepares to begin an adult-use sales program. Getting it right can mean the difference between a successful start for your pot program with a smooth opening weekend, and a rocky road with shortages, price hikes, long lines and bad reviews.

Of course, having too much Cannabis can be problematic as well. As Arcview Management Consulting’s David Abernathy points out, “Some states have found themselves relatively quickly with an oversupply of Cannabis as markets come online, which can cause the wholesale price to crater and really make it difficult for cultivators.”

Striking the right supply balance is not always easy as “A lot of the regulations are created as political compromises, and often created by people who often don’t understand the mechanics of the supply chain of the Cannabis industry very well,” according to Abernathy.

Recent estimates have Connecticut generating around $250 million in sales, meaning the state will be a major player in the Cannabis industry. And, considering it is poised to beat nearby New York and New Jersey to market, Connecticut currently has a massive competitive advantage. By the fourth year of sales, experts forecast $750 million of legal weed being sold in Connecticut, with some estimating the state will take in as much as $1.25 billion in that fourth year.

One industry insider believes that Connecticut will need approximately 31,000 pounds of pot for the launch of retail sales. The expectation is that number will then double in the second and third years of sales, before finally coming down as other states in the region catch up.

“As more adult-use markets come online in New England, it will be interesting to see the differences in tax rates or product availability, and whether that gives some states an advantage over their neighbors,” Abernathy said.

Connecticut will begin accepting license applications next month. The state does not cap the number of licenses that can be issued or the amount of pot that can be cultivated. The state also doesn’t limit how much marijuana can be purchased at any one time. It does, however, set possession limits: Adults are allowed to carry up to an ounce and a half of pot, or seven and a half grams of concentrates on their person.

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GETTING INSIDE POT USERS’ HEADS

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As more states embrace Cannabis legalization, officials are scrambling to come up with a method for enforcing THC impairment in drivers. Because the concentration of THC in the body does not necessarily correspond with impairment, and because THC metabolites can remain in the body for weeks after Cannabis was last consumed, traditional roadside tests like the breathalyzer don’t work with marijuana. Nor do THC per milliliter of blood limits, which some states have already introduced.

However, researchers at Massachusetts General Hospital (MGH) recently announced the results of a study that might have solved the problem of how to measure THC impairment in drivers.

MGH researchers are looking into the possibility of using brain imaging to reliably detect impairment from pot use. The technique, called functional near-infrared spectroscopy, measures patterns in brain imaging to discover possible impairment from THC. And because it’s noninvasive and the necessary equipment can be battery-operated, lightweight and portable, it might just be the answer that law enforcement has long sought.

The study involved 169 marijuana users who were given either THC or a placebo. Those who reported feeling the effects of THC showed a neural activity signature called an increased oxygenated hemoglobin concentration in brain imaging.

According to lead author Jodi Gilman, PhD, “Companies are developing breathalyzer devices that only measure exposure to Cannabis, but not impairment from Cannabis … We need a method that won’t penalize medical marijuana users or others with insufficient amounts of Cannabis in their system to impair their performance. While it requires further study, we believe brain-based testing could provide an objective, practical and much needed solution.”

The study did not specifically look into the feasibility of this method in roadside stops by law enforcement. But it did suggest that creating a brain scanner fitted into a headband or cap could make the test easier to use and reduce setup time.

Besides, who wouldn’t want a traffic cop hooking electrodes up to their scalp so they can conduct (and attempt to interpret) brain imaging tests on the side of a highway?