Taxes and criminality among key differences between two proposals
ROCHESTER, N.Y. (WROC) — While there appears to be an air inevitably surrounding this year’s push to legalize recreational marijuana by April 1, some significant—and familiar—sticking points remain.
Those sticking points are revealed in the comparison of Gov. Andrew Cuomo’s legalization plan and the state legislature’s.
“The governor’s proposal seems to emphasize more larger companies being involved where you’re going to need additional equity or substantial equity in order to participate in this industry,” said Harry Bronson, a Democratic Assemblymember who represents the Rochester area.
Cuomo’s office disputes that claim, but the sentiment sums up the general disagreement between the two camps. Specifically, the points of difference lie in policy details like taxes, criminalization, home grow, destination of revenue, and competition.
On taxes, Cuomo’s plan, which is called the Cannabis Regulation and Tax Act, or CRTA, uses a two-tier system.
Essentially, the state would tax the product before it’s even sold to the public and that tax would be based off of the amount of THC in it. Sales tax plus a separate state 10.25% tax would then get applied to the final retail sale price, which in some parts of the states could mean a tax at the time of purchase of close to 20%.
Those who support the legislature’s proposal, the Marijuana Regulation and Taxation Act, or MRTA, say Cuomo’s proposal would make marijuana too expensive and push people back to the black market.
The MRTA only taxes the final retail product and might not raise as much much money to help New York State close its massive deficit as the CRTA would. Supporters of the MRTA also express concern over a portion of the CRTA that pertains to criminality.
Currently, in New York, possession of a small amount of marijuana is only a violation, but the language in the CRTA says possession of illicit marijuana after legalization would be deemed a misdemeanor. Cuomo’s office told NEWS10’s sister station in Rochester on Tuesday they do not “intend” to criminalize possession, and said changes are possible during negotiations with the legislature.
There’s an obvious difference in the two plans when it comes to growing marijuana at home: the MRTA allows it and the CRTA does not.
Where tax revenue goes has been one obstacle that has tripped up previous legalization efforts and that debate has not disappeared. The MRTA lays out specific percentages of revenue that will go to specific programs, many of which are designed to target communities that “have been disproportionately impacted by the drug war.”
A large percentage will get channeled to the Community Grants Reinvestment Fund. The CRTA on the other hand will set aside a specific amount, not a percentage, to community programs, but some in the legislature claim that this part of the proposal is structured as more of a promise than a guarantee and can change based on the whims of the governor.
Lastly, legislators say they need to see specific prohibitions that would prevent bigger medical marijuana companies, which already have a foothold in the state, from crowding out the market and preventing smaller entrepreneurs from competing.
The CRTA is now part of Cuomo’s budget proposal and some key legislators in the legalization fight say they’ll need to see some changes before they can approve the budget.