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New York State, through the Marijuana Regulation and Taxation Act (MRTA) [Cannabis Law Article 4], has legalized the possession and use of cannabis. However, the regulated retail sale of adult-use cannabis is not expected to begin until late 2022 or early 2023.
The State regulatory framework being created is analogous the Alcoholic Beverage Control Law and the New York State Liquor Authority. The framework is not complete, but several components are known.
- There will be retail stores (sometimes called dispensaries – analogous to wine and liquor stores) and on-site consumption sites (sometimes called lounges – analogous to bars).
- The State is prohibiting retail sale and/or on-site consumption within 500 feet of a school and 200 feet of a house of worship (analogous to alcohol sales laws).
- All cannabis sales will be subject to a 4% local sales tax which will be distributed to the county where sales take place. Counties are entitled to retain 25% of the local tax collected and must distribute the remaining 75% to the municipalities within the county in proportion to sales in each locale. (Communities without sales will not receive revenue.)
- Under State law, cannabis smoking and vaping is treated the same as smoking or vaping tobacco products and is prohibited in all the same places.
- Towns may pass local laws and land use regulations governing the time, place and manner of the operation of retail dispensaries and/or on-site consumption sites, provided such laws or regulations do not make operations unreasonably impracticable.
- Peace officers will be able to inspect all licensed or permitted premises and all records of licensed operators.
At the local level, State law for retail and on-site consumption will be deemed automatically approved unless the municipality passes a local law (opt-out) preventing cannabis sales prior to December 31, 2021.
If the municipality opts-in; retail and/or on-premises sales cannot be prohibited but can be subject to local zoning, which cannot place unreasonable restraints on the business. Other aspects of marijuana production and distribution have been pre-empted by state law and cannot be prohibited.
A town can opt in for one option [e.g., dispensaries] and opt out for the other [e.g., lounges]
If the Town opts-out, then it may opt-in later, but the Town cannot opt-out of either retail sales or lounges unless it passes a local law.
- To effectuate an opt-out, local governments must adopt a local law subject to a permissive referendum on or before December 31, 2021.
- No city, village or town may opt-out after December 31, 2021.
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