Two groups that support cannabis legalization—but failed to join forces last year—have finally come together as Gov. Andrew Cuomo prepares once again to convince the legislature to legalize adult use of marijuana.
The two factions—social justice advocates and medical marijuana providers, which include some of the cannabis industry’s biggest players—will go into battle as a mostly united front once the governor introduces legislation, as he is expected to, in his budget address next week.
In the months since last year’s high-profile failure of the governor’s legalization efforts, pro-legalization groups, including the medical providers and social-justice advocacy groups such as the Drug Policy Alliance, have been in conversation about the legalization fight this session.
The disagreements between the two groups have centered around how minority communities will benefit from legalization and what role, if any, the medical marijuana providers will have in launching recreational use. The providers want to have medical and recreational dispensaries in the same location, and they want to continue as vertically integrated operators—selling the product they grow, as most of them do now.
In the past, advocates have felt that those practices would give the providers an unfair advantage over minority entrepreneurs just getting into the recreational market. Although they are still working out details, and waiting to hear what the governor’s and the legislature’s positions will be, the two sides appear to be more or less on the same page.
The talks picked up last year after the governor’s bill was taken out of the budget, signaling its likely defeat. This year, advocates and businesses are once again hoping to see a cannabis bill cross the finish line as part of the overall budget, which makes it easier for Democrats from moderate or conservative districts to support it.
“It’s a 180-degree turn from where we were 12 months ago,” said Katie Neer, chair of the New York Medical Cannabis Industry Association, and head of government affairs for Acreage Holdings, a major cannabis player. “What we’re trying to do is make sense of a bunch of different interests that don’t have to contradict one another. We believe you can set up a cannabis industry in New York that’s inclusive, diverse and competitive.”
All sides seem to agree that while there will be challenges in winning the votes of moderate Democrats, they have certain advantages this year. The governor has a $6 billion budget gap to fill, and tax revenues from cannabis sales could help. And the recent tragic deaths from vaping THC extracts bought on the underground market have demonstrated the need, they say, for regulation.
The medical cannabis industry has itself become more united: The assocation now includes eight of the state’s 10 providers—compared to six a year ago—including publicly traded players Curaleaf and Columbia Care. The large cannabis companies, which have all gone public on the Canadian Securities Exchange, have seen their stocks hammered over the past year as the green wave of legalization slowed to a near-halt across the country and California’s dispensaries struggled amid a thriving black market.
Meanwhile, social-justice advocates are recognizing that medical providers are the likeliest source of funding for their programs, and that legislative leaders have become increasingly sympathetic to the medical providers’ position. The state’s medical program is among the most restrictive in the country, and all of the providers have been losing money.
That has given ammunition to their arguments for locating recreational and medical dispensaries together, and launching as vertically-integrated operators after paying licensing fees, rather than through an auction process that would yield winners and losers, which was what the governor’s bill originally called for last year.
The advocates want to be sure that the legislation pays more than lip service to the goals of reinvestment in communities that suffered from the war on drugs and making sure that minority entrepreneurs gain a genuine foothold in the new industry. That would include providing training and zero- or low-interest loans, allowing them to get into the market at the same time as the medical providers and to locate in places that make good business sense.
“I think there is a balance to be struck,” said Melissa Moore, deputy state director of the Drug Policy Alliance. “But we’ll need to be really intentional about it and not just do the normal thing where we throw up our hands and see how it plays out.”
Moore added that while she wasn’t “wild about” letting the medical providers co-locate their operations and vertically integrate, she did not see those issues as the focus of her organization’s fight this year.
“Our focus is going to be around where the tax revenues are allocated and what’s actually happening around community reinvestment and the social-equity structure in general,” she said.