The New York State Marijuana Regulation and Taxation Act (NY MRTA), signed into law three years ago by then-Governor Andrew Cuomo, has been put to work promoting social equity. Not only did the law make recreational cannabis legal throughout New York for adults over twenty-one, but it also set a goal to award half of all licenses granted through the program to social and economic equality (SEE) groups. This is in addition to investing 40% of cannabis tax revenue into the communities that were harmed by the criminalization of cannabis.
William M. X. Wolfe, a member of Harris Beach PLLC’s cannabis industry team, has said, “New York’s program is one of the most comprehensive out of the states that have legalized cannabis thus far. This is likely because NY looked to other states with similar programs when crafting its social equity regulations to ensure that they not only gave preferential treatment to qualified applicants but also reinvested in communities adversely impacted by cannabis prohibition.”
The SEE efforts of the bill are beginning to build steam due to community organizations educating and networking with potential applicants who might need help using the MRTA. “We want to help entrepreneurs grow their businesses because, at the end of the day, we want to get tax revenue back into the community,” said Edwin Spencer, co-executive director of the BLOOM ROC group, which undertakes outreach and education for potential SEE applicants. “We want these businesses to be so successful that their tax revenue leads to change in the schools and down the street. And we’re willing to work and collaborate with anybody else who is trying to help.”
BLOOM ROC reaches out to businesses owned by women or minorities, as well as to distressed farmers, disabled veterans, individuals from communities hit by cannabis criminalization, and others who could be involved with SEE efforts. “If you are an individual who wants to reimagine yourself in the cannabis industry,” said Previous Brown, co-founder of the group, “BLOOM ROC is creating those avenues to make sure that it’s easy for you. And if you are a legacy operator wanting to legitimize your illegal business, we want to be able to resource to you as well.”
“We benefit from all these organizations like BLOOM ROC, Cannabis Connect, and others that have stepped in and are doing this work to educate the population,” said Damian Fagon, the Chief Equity Officer for the New York State Office of Cannabis Management. “I think New York has caught up to speed in a lot of ways and people know a lot more than they did a few years ago when the MRTA was signed. That’s to the benefit of the industry; people are going to be able to be more successful, make better decisions and they’re going to be taken advantage of like we’ve seen in other states.”
A pending legal challenge in the US District Court in New York’s Northern District presents a risk to these efforts. Variscite NY Four LLC and Variscite NY Five LLC filed suit against the New York State Cannabis Control Board because the license program favors New York residents. The complaint asserts that the federal Dormant Commerce Clause prevents states from discriminating against interstate commerce and that this makes the cannabis license program unconstitutional. If an injunction is granted to the plaintiffs, New York’s entire adult cannabis program could be halted.
