December 31, 2021 is an important day for all parties interested in New York’s burgeoning cannabis market. This day is the deadline for all New York State municipalities to opt-out from allowing adult-use cannabis retail dispensaries (stores selling marijuana) or on-site consumption stores (a place to smoke or otherwise consume marijuana, similar to a cigar lounge) within their jurisdictions.
What Does “Opt-Out” Mean?
The New York State legislature has enacted, and Governor Cuomo signed into law, the Marijuana Regulation & Taxation Act (“MRTA”) which legalized cannabis for adult consumption in New York State. While statewide use is now legal for individuals who are age twenty-one and older, the MRTA carved out a process by which villages, towns, and cities can prohibit cannabis licenses in their jurisdictions. Municipalities may pass local laws prohibiting dispensaries and on-site consumption within their borders. Once a local law is passed, the Office of Cannabis Management is notified that no licenses shall be issued within that municipality. If a municipality wishes to enact such a local law, it must do so by December 31, 2021.
If a municipality does not opt out, it may nevertheless regulate certain operational parameters and location of retail cannabis stores. For example, a municipality may enact zoning regulations to regulate the hours of operation and location of cannabis stores per the MRTA. Some municipalities may create an overlay district in which cannabis stores are permitted. Other municipalities may create a special use permit for cannabis stores with conditions that are designed to limit the location and operational characteristics of the cannabis stores. In other words, Towns, Villages and Cities will be able to regulate cannabis stores much like they would regulate a liquor store or any other retail store.
Why Would a Municipality Consider Opting Out?
Deciding whether to opt-out may be a difficult decision involving public comments on both sides of the issue.
Perhaps due to the long history of marijuana prohibition in the United States, marijuana has been stigmatized. Some people believe marijuana is dangerous to their health, it is addictive, it can lead to more dangerous drugs, that it will fall into the hands of young children, or that a cannabis store will attract “undesirable” people such as drug addicts to the neighborhood and hurt their property value.
Others believe that, based on medical evidence, cannabis is not addictive, it is safer than other drugs because it does not cause death due to overdoses, and it can be used for medicinal purposes, such as treating glaucoma, cancer, Alzheimer’s, Crohn’s disease and anxiety. Local municipalities can benefit substantially by allowing cannabis stores to open because they will create jobs, encourage entrepreneurship, foster social equity, and receive tax revenue from cannabis sales. It is important to note that a large portion of the tax revenue from cannabis sales will be spent on educating people about the potential dangers of cannabis including use by minors, and driving under the influence.
Some people also argue that opting out is irrational because cannabis is already widely available on the “black market” and adjacent States and municipalities are likely to have cannabis stores. In other words, like liquor, adult residents will be able to travel a short distance to visit cannabis stores in neighboring Towns, Villages and Cities. Therefore, opting out due to public health concerns is illogical because residents will still have access to these products.
What Can Interested Parties Do?
Interested parties may educate themselves by conducting independent research and contacting their State and local government for more information about the pros and cons of allowing cannabis stores in their jurisdiction.
There are also a few practical notes to consider here. First, if a municipality does not opt-out by December 31, 2021, then that municipality is prohibited from opting out in the future. Second, if a municipality has previously enacted a law prohibiting cannabis stores, that law is not considered part of the opt-out if it predates March 31, 2021, the date the Governor signed the MRTA into law. In that case, the municipality would have to pass a new local law conforming to the opt-out requirements as detailed in the MRTA. Third, municipalities may opt-out of one or both of adult-use retail dispensaries and on-site consumption licenses. Lastly, though the MRTA is not clear on this point, it may be the case that a municipality that opts out before the deadline can later decide to opt back in.
At Betensky Law PLLC we understand the complexity of such regulations. Our firm has experience advising municipalities as well as businesses. Please call us if you are seeking legal counsel in reference to the opt-out deadline.
For general information about our firm, please contact us at (914) 338-8050 or send an e-mail to firstname.lastname@example.org. We look forward to hearing from you.
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