New York Strikes Marijuana Reform Deal Paving Way For Adult-Use Bill

New York is fast-tracking marijuana legalization 

That's according to Senate Finance Committee Chair Liz Krueger, citing an agreement between Governor Andrew Cuomo and the State Legislature on a deal to legalize adult-use cannabis sales for adults over 21.

“It is my understanding that the three-way agreement has been reached and that bill drafting is in the process of finishing a bill that we all have said we support,” Krueger told Bloomberg on Wednesday.

The measure could be on the floor and ready to be voted upon as early as next week, she added.

An Anticipated Deal: Cuomo is a long-standing proposer of legalizing recreational cannabis in the state. Recall his including a cannabis reform proposal in his budget request earlier this year.

The request was denied by the Senate, who moved the conversation to achieving a deal with the executive branch, for the introduction of a separate bill on cannabis reform.

While the text language has not been made public yet, Krueger says the agreement will include a 13% sales tax, 9% of which would go to the state and 4% to the localities. 

An excise tax of as much as 3 cents per milligram of THC could also be included.

Effects On The Cannabis Markets: A fast-tracked legalization bill in New York could mean a great blow to the New Jersey cannabis market, per a recent analysis by Cantor Fitzgerald.

New Jersey legalized recreational cannabis last November through a ballot vote, and is still aiming to close regulations, which could be delayed until late 2021 or early 2022.

A pre-approved bill between the executive and legislative branches in New York could help the state reach a comprehensive regulation sooner. Legal cannabis in New York would mean a loss for New Jersey, as much of its market was envisioned in out-of-state buyers coming from New York.

According to analyst Pablo Zuanic, if New York legalizes before New Jersey, stocks from companies with operations in the Emprie State and not in the Garden State — like Cresco Labs CRLBF — would see benefit.

Those on the opposing end, with only New Jersey operations (like Ayr Wellness AYRWF, TerrAscend TRSSF and Verano) would experience a negative outcome.

Companies with operations in both states would still experience a positive effect. These include Acreage ACRDF, Columbia Care CCHWF, Curaleaf CURLF, and Green Thumb industries GTBIF.

Photo by Patrick Tomasso on Unsplash