Betensky Law PLLC is equipped to advise clients in the cannabis industry regarding legal issues in New York. Since 2014 cannabis has been legal under New York law for medical use. Since New York legalized cannabis for adult use, the cannabis industry poised to grow exponentially in New York, including Westchester County. The cannabis industry consists primarily of growers, cultivators, processors, distributors and retail dispensaries. These businesses require experienced attorneys to navigate the State licensing process, comply with local municipal laws, form business entities, negotiate operating agreements, negotiate lease agreements, and navigate state and federal laws. Betensky Law PLLC stands ready to advise clients regarding the foregoing issues and other related issues that arise in the cannabis industry in New York.
Cannabis Industry Background
The medical marijuana dispensaries that already exist in New York are the tip of the proverbial iceberg. The cannabis industry is enormous and the State of New York is positioning itself to bring many more jobs and substantial tax revenue. According to a co-authored report “2019 Update to the State of Legal Marijuana Markets,” from Arcview Market Research and BDS Analytics, after delivering $6.9 billion in global sales in 2016, $9.5 billion in worldwide revenue in 2017, and an estimated $12.2 billion last year, global sales are expected to grow 38% in 2019 to $16.9 billion, and hit $31.3 billion by 2022. That’s a compound annual growth rate of 26.7% between 2017 and 2022.
Adult Use Cannabis Legalization Creates Business Opportunities in New York
On March 31, 2021, Governor Andrew M. Cuomo signed into law S.854-A/A.1248-A, also known as the “New York Marijuana Regulation and Taxation Act” (herein, the “Act”). New York has become the fifteenth state in the United States to legalize non-medical, or “recreational” use of cannabis for individuals over the age of 21, including New Jersey and Massachusetts. Canada and Mexico have legalized adult use cannabis on a national level.
Cannabis is a multi-billion-dollar industry and New York is one of the largest markets. Therefore, the Act is expected to generate a lot of business, create a lot of jobs and thereby yield a great deal of tax revenue. The Act is also designed to reduce the size of the unregulated black market.
The Act is unique in that it contains a very strong social justice / social equity component. Women and minority-owned New York businesses will effectively receive priority status when applying for licenses for cultivation, processing, distribution, dispensaries and consumption sites. The goal is to have at least half of the licenses go to social equity applicants in order to “right the wrongs” that have disproportionately affected people of color. The Act also includes a restriction on vertical integration to allow those social equity applicants to thrive.
Betensky Law is uniquely positioned to offer legal advice on individuals who wish to enter the cannabis industry and apply for a license. We can help individuals form a business entity, acquire real property through purchase or lease, acquire equipment, apply for a state license, apply for local municipal approvals, and plan for the future. We welcome the opportunity to get in on the “ground floor” with small businesses who wish to take advantage of this historic opportunity and help them succeed in what is expected to be an incredibly lucrative New York market.
Calling us early in the process at (914)338-8050 will help ensure that you are ready to move forward at the appropriate time. We look forward to hearing from you.
Cannabis Is Still A Controlled Substance Under Federal Law
Despite the fact that 46 states have legalized cannabis for medical use, cannabis is still considered a Schedule 1 controlled substance (along with heroin, mescaline/peyote and LSD) under the federal Controlled Substances Act (CSA) (21 U.S.C. § 811).
According to the United States Drug Enforcement Agency (DEA), drugs are listed on Schedule 1 if they exhibit the following characteristics:
The drug or other substance has a high potential for abuse;
The drug or other substance has no currently accepted medical treatment use in the U.S; and
It has a lack of accepted safety for use under medical supervision.
According to federal law, no prescriptions may be written for Schedule 1 substances, and they are not readily available for clinical use.
So how is it that cannabis can be illegal under federal law and legal under state law? Doesn’t federal law trump state law?
Beginning in 2016, several federal agencies issued guidelines and other policy memoranda to address the conflict between federal and state laws vis-a-vis medical marijuana. On August 29, 2013, the Department of Justice (DOJ) issued a guidance memo to prosecutors concerning marijuana enforcement under the Controlled Substance Act (CSA) making it clear that prosecuting state legal medical marijuana cases is not a priority.
The memo included eight guidelines for prosecutors to use to determine current federal enforcement priorities. Many State medical cannabis regulations ensure that any business with a license is meeting these same criteria. These guidelines include:
- Preventing distribution of marijuana to minors;
- Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs or cartels;
- Preventing the diversion of marijuana from states where it is legal, under to state law in some form, to other states;
- Preventing state-authorized marijuana activity from being used as a cover or a pretext to traffic other illegal drugs or other illegal activity;
- Preventing violence or the use of firearms in cultivation and distribution of marijuana;
- Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
- Preventing the growing of marijuana on public lands and the attendant public safety and environment dangers posed by marijuana production on public lands; and
- Preventing marijuana possession or use on federal property.
Therefore, while a conflict exists between federal and state law, the federal government has not prioritized enforcement of the Controlled Substance Act with respect to cannabis. In addition, future legislation may resolve this inherent conflict of laws.
Contact Us Today For A Free Consultation
Whether you are a cannabis grower, cultivator, processor, distributor or retail dispensary, an experienced New York attorney can help you navigate the state and federal laws to help your business succeed in New York. Call us today for a free consult at 914-338-8050.
 The Motley Fool. How Big Could the Marijuana Industry Grow? March 3, 2019.