New York’s new cannabis laws look a lot like Colorado’s

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ALBANY — The marijuana industry in New York will be similar to Colorado’s, where nine years after it was legalized there are nearly 1,000 retail stores and small medical marijuana dispensaries spread across that state.

For many people who suffer from conditions such as insomnia, depression, post-traumatic stress disorder or chronic pain, the legislation will also pave the way for easier access — and lower prices — to marijuana therapies that may help them treat their symptoms and avoid the need for synthetic drugs that often come with debilitating side effects or potentially dangerous interactions with other substances.

The Marijuana Regulation and Taxation Act passed by the Legislature — and signed into law last week by Gov. Andrew M. Cuomo — is largely mirrored after Colorado’s system that has enabled small business owners to establish a network of boutique shops and dispensaries that sell everything from small amounts of cannabis to pain creams and edibles.

Unlike some states where a few large dispensaries are spread out geographically and customers drive sometimes long distances to make purchases, New York’s plan is a statewide framework of relatively small retail shops with a focus on awarding licenses in many of the communities where convictions for marijuana-related offenses have been the highest.

Tobacco, alcohol and pharmaceutical companies for years had dispatched lobbyists to ply the Capitol corridors in Albany trying to influence the framing of the legislation, but lawmakers said they beat back that effort and their attempts to seize control of the industry here.

“We modeled it originally on the SLA (state Liquor Authority) and how we do operate liquor stores and bars, and then we kept taking a look at Colorado and go ‘OK,’ we see where they’re making the mistakes and they’re fixing it,” said state Sen. Liz Krueger, a Manhattan Democrat who championed the legislation with Assembly Majority Leader Crystal D. Peoples-Stokes, a Buffal0 Democrat.

The legislation signed by the governor immediately decriminalized the possession of less than three ounces of marijuana — or less than 24 grams of concentrated cannabis — for anyone 21 and older. Possession of amounts higher than that remains a violation and escalates to a felony charge when someone possesses more than 10 pounds of marijuana, or more than four pounds of concentrated cannabis.

The rollout of the regulatory platform, including an Office of Cannabis Management that will award licenses for growing, distributing, processing and selling, is expected to take at least a year to set up. The illegal sale of marijuana will remain a crime, escalating from a violation for selling small amounts to a mid-level felony for selling more than 100 pounds.

Although stigmas remain, the marijuana industry has evolved significantly in the past half-century, and become much more than a vehicle for someone to get “stoned.”

There is a science and expertise in developing the genetics and different strains from around the globe, with advanced cross-breeding techniques that have been used to grow plants that have particular attributes for treating pain, reducing anxiety and medicating those afflicted with diseases ranging from cancer to Parkinson’s Disease .Some strains will relieve anxiety, for instance, but not leave the person feeling “high” or lethargic from the use.

In Israel, Krueger said, where medical research on medical marijuana is allowed, scientists have had breakthroughs using marijuana extracts to treat children with severe autism.

“There’s a bunch of problems with medical. We’re not allowed to do research in this country, unlike the drug companies,” she said. “It’s hard to come up with a new product, research and market it. It’s more word of mouth … in which case people will say, ‘I’ll just go get marijuana.'”

To encourage the medical industry to continue to flourish — insurance companies won’t pay for it and prices for patients are extremely prohibitive — the new law increases the types of illnesses for which doctors can prescribe marijuana treatment. The additional conditions eligible for marijuana prescriptions include Alzheimer’s disease, muscular dystrophy, dystonia, rheumatoid arthritis, autism and “any other condition certified by the certifying health care practitioner.”

The law also doubles the number of medical marijuana licenses available and allows those companies to have up to eight dispensaries — up from four — with two of those being retail outlets.

“They also be allowed two of the first few years to sell marijuana (non-medical) to companies with recreational licenses,” Krueger said. “They’re the only ones in the state of New York who are already growing legal product. … It takes a while to get everybody started up. So we don’t’ want a program that starts up with no supply of marijuana (and) it will increase their ability to make money because they had complained we had set up a system for them that left them barely hanging on.”

Dr. Mark Oldendorf, who runs a general practice in Albany and has studied the marijuana industry and its medical applications for years, said the provision enabling New York practitioners to certify medical marijuana use for patients for any condition is a big step.

“I think that’s terrific because that will really, really be a shot in the arm to the medical marijuana industry here in New York state, because now doctors can say you can have medical marijuana for whatever — for insomnia, for depression, for whatever they feel it’s appropriate for,” he said. “That is key because I found a tremendous benefit for insomnia for a lot of people. And that’s a big market. I think that’s an underlying theme in a lot of these preparations, especially for underlying pain, PTSD; it works well for them and it also gets them a night’s sleep, whether it works for the pain or not.”

Oldendorf said he is studying the potential of establishing a retail outlet that would benefit an inner-city community but also be used to fund research. Because marijuana remains a prohibited substance under federal laws there have been relatively no control studies on its use and effectiveness in treating medical conditions.

“You look at the list of side effects of the drugs that I give out; they’re all synthetics made in the laboratory that God probably never, ever meant to put in our body,” Oldendorf said. “I think that probably this is going to maybe mark the beginning of some formal, randomized control trials and for people to invest in research and use some of the money from retail sale to invest in research – that’s what I would do.”

In Colorado, where many dispensary owners obtained their first seeds from overseas, the retail shop owners are also allowed to grow and manufacture their own products.

New York’s law also allows “nursery licenses” that will allow someone to grow immature plants and sell them to other cannabis licensees, and “delivery licenses” that allow a business to make home deliveries from retail locations.

In addition, there will be “microbusiness licenses” that allow the holder to cultivate, produce and retail their own cannabis products but with significant size limitations. There will also be “on-site consumption licenses” for retail locations that will allow people to use cannabis products at the location.

As in Colorado, regulation will be extremely tight.

A man who owns a small dispensary in southeastern Colorado, not from from the Kansas border, said experienced growers there often find a plant that becomes one of their top sellers — the right levels of THC ((tetrahydrocannabinol) and CBD (cannabidiol) — and will keep that plant in a vegetative state using artificial lights. That vegetative state — which is about 18 hours under light and six hours in darkness — mirrors conditions early in a grow season when the plants grow but do not flower.

Instead, the growers take clippings from those plants and create new plants that yield the “buds” that are smoked or used to make concentrates, edibles and creams. Once a plant is 8-inches tall, it receives a tag that allows the state of Colorado to track that plant throughout its life, including documenting how much product it yields, the level of THC and the weight of any waste product left over.

The law in Colorado allows someone to buy up to one ounce per day. But shop owners can do little to stop “loopers,” the show owner said, who are often coming across state lines and will move through various shops in a town and buy multiple ounces of marijuana from different shops on the same day. They often take it back and sell it illegally in their home state.

The prices fluctuate in Colorado and are driven by factors that include availability as well as the strength of the strain. Marijuana with a very high level of THC, often sells for the highest prices.

In Colorado, the shop owner said, CBD products that do not contain THC — much like what has been available legally in New York — are viewed skeptically as “snake oil” and many industry experts believe those products are not effective without some level of interactive THC.

“You need the THC to react with the CBD and then it becomes effective … effective for helping people with pain,” he said. “Creams, topical creams, transdermal patches, suppositories for people with colorectal cancer. There is a long road ahead of us. … It’s natural. People like that. It does give relief.
What we sell is happiness and relief. That’s what people are coming in the door looking for.”

The level of THC will also be a factor in how much tax is paid in New York, with a distributor paying tax based on the per-milligram of THC in a product as determined by a lab analysis. That level will be labeled on the product. The legislation set tax rates of 0.5 cents per milligram for cannabis flower, 0.8 cents for concentrate and 3 cents for edibles. There is also a 9 percent tax for retail sale, which goes to the state, and additional 4 percent tax that will be distributed in the localities where the retailer is located.

“The price does fluctuate, especially seasonally, because of so many outdoor grows,” the Colorado shop owner said. “We have our winter here, like there, and these plants cannot survive a frost. There is one growing season and everyone harvests at same time and then it comes to market.”

But it also requires a great deal of effort to grow the marijuana under the regulations set by many states. The plant products are tested for yeast levels, microbials, pesticides, heavy metals and other pollutants that must remain belows levels — measured in parts per million — in order to sell the product to the public.

A provision similar to Colorado’s that allows homeowners to grow up to six plants per adult — a concession that Cuomo had initially opposed — is not expected to be legalized until at least early 2023 — 18 months after retail shops have opened.

But an exception was made in the law for medical marijuana cardholders, who can begin growing their own plants six months after the effective date of the bill.

The law allows cities, towns, and villages to “opt-out” from having adult-use dispensaries or on-site “social consumption sites” located in their communities. But that decision would be subject to a permissive referendum that would allow those who oppose the governing body’s vote to gather enough signatures to force a vote on the issue. The “opt-out” vote must be passed by Dec. 31, and cannot include other aspects of the industry such as grow or distribution facilities — only retail.

The issue of marijuana seeds remains a largely unregulated aspect of the industry. There are seed companies in the U.S. and also in Europe and other overseas locations that provide mail-order service to New York. Although the federal government considers marijuana seeds contraband, enforcement is rare. New York’s new marijuana law does not address the issue of seeds.

“We sell them here. It’s not a huge business. We also have clones for sale,” the Colorado shop owner said. “How do you start something that’s not legal? … How do you get a plant without a seed (and) where do you get the seed from? It’s that funny gray area. We kind of just bluffed our way through it. … Our seeds came from Amsterdam (Netherlands).”

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