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New York’s Laws for Recreational Marijuana in 2020: Learning from Others

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February 12, 2020 in Blog

New York’s Laws for Recreational Marijuana in 2020: Learning from Others

As New York grows closer to legalization of marijuana for recreational use, it’s time to start drinking in the lessons of states that have already done so. From Colorado, New York can visit policies that have met success. From California, it can behold what many see as the dangers of overregulation. Let’s talk about the failures and successes that can contribute to New York’s laws for recreational marijuana in 2020.

Colorado’s Success & Failures: How That Might Affect New York’s Laws for Recreational Marijuana in 2020

People have suspected that Colorado’s legalization of recreational marijuana has been a success. Now, the data’s out to both support and refute that claim. Here are some fun facts, according to Alexis Keenan for Yahoo Finance (2019).

  • The combined revenue of the industry reached $1.27 billion as of October 2019.
  • The state accrued $247 million in tax revenue in 2017.
  • The number of hospitalizations due to marijuana use increased about 300%. Of course, you might perceive this as both bad and good. These hospitalizations could be a sign that users are more comfortable admitting the cause of their symptoms due to legal protection from the state.
  • A more black and white failure has been that marijuana related traffic deaths increased from 55 to 139 (these deaths involved both marijuana-only and a combination of marijuana and other substances).

In other words, fiscally, Colorado’s recreational marijuana legalization has been a slam dunk. Socially, the impact isn’t as clearly good. It’s been far more successful than California or Oregon. Much of that can be attributed to the care they took with their policy designs.

Colorado’s Policies

As early as the same year the recreational legalization rolled out, 2014, people were heralding it a success. John Hudak, a senior fellow of government studies, is one of those people. He authored a report that argued the success early and offered some explanation. Perhaps one of the reasons it was successful was that they spent two years experimenting and preparing.

The six administrative and policy features he attributed to that success include:

  1. Creating a task force and rapid response team: To avoid delays common among policymakers, the amendment had very strict deadlines built in. When it passed, there was a bit of luck. Opponents stepped aside and let the policies be administered. To that end, they created a task force composed of both staunch supporters and passionate opponents (many of whom were in law enforcement or medicine).
  2. Top-down support: Support from the governor, who actually opposed the bill initially, became a crucial reason for success. He set the tone with a job-to-do attitude.
  3. Appointing dedicated personnel and coordinating: In order to coordinate and communicate effectively, the governor appointed the first-ever Director of Marijuana Coordination. His job was to act as the middle man between state officials and private stakeholders communicating as issues arose, policy efforts began, and more. The regular face-to-face meetings and streamlined communication is surprisingly not as common in government as you’d think, and Hudak believes this a reason for the success.
  4. Reorganization of Agencies: Learning from earlier implementation of medical marijuana and a 2013 audit, the task force decided against simply handing over administration to the existing Medical Marijuana Enforcement Division (MMED), which was the initial plan. Instead, the agency was restructured and renamed the Marijuana Enforcement Division (MED). This new organization addressed existing problems with the MMED. It came with some necessary personnel shifts, including internal promotions and new hires. The new organization, in contrast to the former MMED, had positive reviews from the private sector because its approach was far more inclusive.
  5. Huge Policy Shifts: Of course, learning from the medical implementation also resulted in policy shifts. In sum:
    • Seed-to-Sale tracking system
    • Vertical integration (company ownership of the supply chain)
    • Temporary barrier to entry and preference to existing producers
    • Quantitative Purchase Limits
    • Facilities mandatorily monitored by video surveillance
    • Redesign of the Funding System to Pump Tax Funds from Sales Directly into Agency
  6. Addressing Colorado’s Culture: Naturally, when a state that’s criminalized marijuana use for over a century legalizes it, there’s some culture shock. Law enforcement in particular needed to learn to adjust. This meant training. It also meant assurances from the government that the industry would be properly and forcefully regulated.

In other words, albeit Colorado had some luck with its implementation, it took a lot more hard work and consideration. They didn’t walk into success. They constructed it.

If this is to inform New York’s laws for recreational marijuana in 2020, they might learn that the process begins well-before legalization of recreational marijuana. It also means a top-down, all-in strategy. In other words, there can’t be resistance from the top, something they’ll have to address as it sounds like in this article. They’ll want this to be able to effectively coordinate between government officials and the private sector, who shouldn’t be able to sniff out discrimination or bias in future policy changes. All of this takes serious planning, so it’s not a bad idea to ensure the amendment has strict deadlines and that a dedicate team helms the effort on passage. Finally, they’ll have to take what they’ve learned from their implementation of medical marijuana and make changes to both that and the way they think about retail sale of the product.

California’s Success & Failures: How That Might Affect New York’s Laws for Recreational Marijuana in 2020

We have an idea now why Colorado was successful, but why then has California not been considered quite so? One would expect it. It’s California. Weed culture there has been strong long since before any legal protection was in sight. It’s summed up in this article from the LA Times, which says, “Retailers and growers say they’ve been stunted by complex regulations, high taxes and decisions by most cities to ban cannabis shops.”

Overregulation is the word of the day. But how? It’s not as if Colorado didn’t regulate. Industry practically begged for, at the very least, clear and forceful regulation. While this could be part of a cultural difference between Californians and Coloradans, let’s look at the administrative and policy differences between the two:

  • Regulations are not as clear, or top-down: Whereas in Colorado, you had a clear, top-down tone set by both opponents and proponents of the measure, in California it’s just not the case. Case in point: Fewer than 20% of Californian cities allow retail shops to sell cannabis. Clearly, some people got the memo and didn’t like it.
  • The implementation wasn’t vertical: Whereas the supply chain (distributors, suppliers, manufacturers, etc.) is owned by the same companies that sell retail marijuana in Colorado, they’re all separate in California. This was intentional. They even put barriers to verticalization. At least, they did. As of 2019, they walked that back, which in and of itself is dubious because that’s a difficult genie to stuff back into the bottle. The industry had already been developed. A few reasons this is a problem: 1) It made the industry more disorganized. 2) It didn’t quite mesh with the problem that many cities still didn’t support retail cannabis. 3) There’s a lot of confusion.
  • The tax money isn’t as clearly earmarked: In Colorado, tax money from sale of cannabis, medical or recreation, goes back into regulating that industry effectively. In California, it’s not so clear. It goes to things like local government and community-based programs, California public universities, and highway patrol. This likely means that, as was the case with medical marijuana in Colorado initially, the funds for regulating the cannabis industry in California are less streamlined. Rather than self-funding, the regulation has to rely on governors to earmark funds as they did in early 2019.

We could spend all day discussing this, but the bottom-line here is not so much that overregulation is the problem, although it is a problem, it’s this: the transition and implementation of retail marijuana in California has been a hot mess.

What does this mean for New York’s laws for recreational marijuana in 2020? Well, it means pay attention, as New York is arguably more similar to California than Colorado, both being huge cultural centers and coastal cities. More than that, I think the lesson here is planning. Colorado was streamlined, efficient, on-the-same page. It wasn’t like that in the middle of the process. It’s not clamoring to get back in the game as California is. It was like that from the start. So, when recreational marijuana passes in New York, the state should not rush into selling. It should be sure everything is meticulously thought out and planned based on what it’s seen in Colorado, in California, and elsewhere.

Conclusion

New York’s laws for recreational marijuana will need some careful consideration. Thankfully, they’re not the first to do it. They can learn from the successes and failures of other states. Not so thankfully, it’s not easy. But with some careful planning, some review of the existing medical cannabis industry, some cultural reform, and maybe a little luck, they’ll be able to do it. Want to learn more about where cannabis is at in NY currently? Check this out.