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HomeMy WebLinkAbout20230467 95 West/250 Washington Special Use Permit Other Saratoga Springs Planning Board City Hall 474 Broadway Saratoga Springs, NY Subject: Request for Relief from Site Plan Requirement for Ten Cees, LLC – Conditional Adult Use Retail Dispensary Dear Members of the Saratoga Springs Planning Board, We are writing to respectfully request relief from the site plan requirement imposed on Ten Cees, LLC at our planning hearing held on 08/03/2023. As an engaged member of the Saratoga Springs community, we would like to bring to your attention some important considerations regarding the site plan requirement and the communication with the planning department during the planning process. The Principal City Planner, Susan Barden, provided the application and supporting documents to the Planning Board, as is her practice for each hearing. During our first meeting, Ms. Barden did not delve into the details of the site plan requirement, rather indicating that responsibility for any changes to sidewalks on or near the property would rest with the town or property owner. This opinion was reinforced when Ms. Barden reached out to the West Hill Plaza property owner in the days preceding the planning hearing to discuss the sidewalk. Ten Cees representatives had made multiple attempts to contact her, but she only reached out to the property owner regarding this issue. If in fact this was the responsibility of Ten Cees, LLC, the planning process is most effective when there is open and transparent communication between all parties involved, ensuring that the concerns and needs of the community and the business are adequately addressed. In this instance we were surprised by this issue, as meaningful communication with us seemed to be lacking. There seemed to be some confusion about what direction was given to local municipalities related to the licensing of CAURD applicants. The rules state that”...all municipalities including counties, are preempted from adopting any law, rule, ordinance, regulation, or prohibition pertaining to the operation or licensure of adult-use cannabis, medical cannabis or cannabinoid hemp licenses. However, towns, cities and villages are permitted to pass local laws and regulations governing the time, place and manner of adult-use retail dispensaries and on-site consumption licenses, provided such laws and regulations do not make the operation of the license unreasonably impracticable. For example, cities, towns, and villages may pass laws and regulations pertaining to local zoning and the location of licensees, hours of operations and adherence to local building codes. Municipalities may not issue or require local licenses for cannabis businesses.” We believe that the site plan requirement as it pertains to the shopping plaza, given that the focus of the requirement is a sidewalk that would not generally be the responsibility of the property owner or city, falls under “unreasonably impracticable” for a brand new business who is a tenant in one suite of the property. We are attaching two government issued directives that explain local purview for CAURD licensees. It is vital that the planning requirements be considered with a holistic view that takes into account not only the immediate impact on the property but also the overall impact to the city. MRTA imposes an excise tax on adult-use cannabis at every level of the distribution chain. In particular, there is a 4% tax imposed on the retail sale price for local governments, 25% of which goes to the county and the other 75% of which goes to the city of Saratoga Springs. Taxes are remitted to the New York State Department of Taxation and Finance on a quarterly basis and the revenues from the 4 percent tax are distributed to the counties, cities, towns and villages in which the retail dispensary is located. This revenue is now lost for the city. In light of these considerations, we humbly request that the Saratoga Springs Planning Board consider granting relief from the site plan requirement imposed on Ten Cees, LLC. This will allow for a more comprehensive evaluation of the dispensary's potential benefits while ensuring that the concerns of both the business and the community are harmoniously addressed. In addition to the two aforementioned documents, we are attaching our written plan for line control, as you requested. We thank you for the timely issuance of our Special Use Permit and for your time and consideration. Your dedication to our city's safety and development is sincerely appreciated. Very truly yours, Marcy Leventhal Ten Cees, LLC, the NY CAURD licensee set to occupy 95 West Avenue in Saratoga Springs, has developed a robust and innovative approach to manage the potential lines that may develop outside its facility. Understanding the importance of community safety and orderly operations, Ten Cees, LLC has devised a comprehensive three-pronged strategy to address this concern. Firstly, the dispensary plans to leverage cutting-edge point of sale (POS) software to establish a digital queue system. This system will enable customers to wait comfortably in their vehicles until they are notified via the app that it's their turn to enter the dispensary. This digital queue not only streamlines the customer experience but also minimizes congestion on the premises, contributing to a smoother and more organized operation. Additionally, Ten Cees, LLC aims to enhance customer efficiency through an order-ahead functionality. This forward-thinking approach empowers customers to place their orders in advance and pick up their purchases quickly upon arrival. By reducing the time spent within the dispensary, this approach not only reduces wait times but also enhances overall customer satisfaction. Furthermore, to ensure orderly queuing, the dispensary intends to establish physical lines outside its front door that wrap around to the back door, utilizing strategically placed stanchions. This physical queue management system will ensure that customers maintain a safe and organized distance from each other while waiting, fostering a sense of order and safety. A security guard or facility employee will manage line control, to ensure it is not infringing on the accessibility of neighboring businesses or spill into the parking lot or street, creating a safety hazard. In the event of high demand during peak times, Ten Cees, LLC has also considered the implementation of an appointment-based system to further control foot traffic. This measure would prevent walk-ins during busier periods and enable the dispensary to better regulate customer flow, ensuring that both the customer experience and the surrounding community are well-managed. Ten Cees, LLC's multifaceted approach to line management underscores our commitment to operational excellence, community security, and adherence to the highest industry standards. By blending technological innovation, customer-centric solutions, and thoughtful physical queue management, the dispensary aims to establish itself as a responsible and well-regarded member of the Saratoga Springs community. 1 What is in the Law Local Governments Overview On March 31, 2021, New York State legalized adult-use cannabis (also known as marijuana, or recreational marijuana) by passing the Marijuana Regulation & Taxation Act (MRTA). The legislation creates a new Office of Cannabis Management (OCM) governed by a Cannabis Control Board to oversee and implement the law (collectively referred to as “OCM”). The OCM will issue licenses and develop regulations outlining how and when business can participate in the new industry. The OCM will also oversee the State’s existing Medical Marijuana Program and Cannabinoid Hemp Program, previously regulated by the Department of Health. The information below is a collection of key provisions from the MRTA which impact local governments and local officials. For additional information or to contact the Office of Cannabis Management, please visit our website at: www.cannabis.ny.gov or e-mail us at: info@cannabis.ny.gov. Local Opt-out Cities, towns, and villages can opt-out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses from locating within their jurisdictions; however, municipalities cannot opt- out of adult-use legalization. Possession and use of cannabis by adults 21 years of age or older is legal in New York State. To opt-out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses, a municipality must pass a local law by December 31, 2021. This means that if a municipality has already passed a local law or resolution prohibiting adult-use cannabis licensees from operating in its jurisdiction, the municipality will have to pass a new local law conforming to the opt-out requirements outlined in the MRTA if the municipality still chooses to opt-out. If a municipality does not opt-out by December 31, 2021, the municipality will be unable to opt-out at a future date. However, at any time a municipality may opt back in, to allow adult-use retail dispensaries and/or on-site consumption licenses, by repealing the local law which established the prohibition. A municipality may choose to opt-out of both adult-use retail dispensaries and on-site consumption licenses or just one type of license (e.g. allow retail dispensaries but not on-site consumption licenses). Municipalities are prohibited from opting out of other adult-use license types from locating or operating within their jurisdiction. Additionally, municipalities are prohibited from opting out of medical cannabis or cannabinoid hemp license types. If a town passes a local law to opt-out, it only affects the area of the town outside of any village within the town. County governments are not permitted to opt-out of any adult-use license types. Any local law opting out of adult-use retail dispensaries or on-site consumption licenses will be subject to a permissive referendum as outlined in section 24 of the Municipal Home Rule Law. This allows voters within the municipality to petition whether or not to approve the local law. 2 Local Control and Preemption Except for the opt-out provision described in the section above, all municipalities including counties, are preempted from adopting any law, rule, ordinance, regulation, or prohibition pertaining to the operation or licensure of adult-use cannabis, medical cannabis or cannabinoid hemp licenses. However, towns, cities and villages are permitted to pass local laws and regulations governing the time, place and manner of adult-use retail dispensaries and on-site consumption licenses, provided such laws and regulations do not make the operation of the license unreasonably impracticable. For example, cities, towns, and villages may pass laws and regulations pertaining to local zoning and the location of licensees, hours of operations and adherence to local building codes. Municipalities may not issue or require local licenses for cannabis businesses. Notification to municipalities At least 30 days prior to applying for an adult-use retail dispensary or on-site consumption license, an applicant must notify the municipality of the applicant’s intent to apply for such license. The notification must be made to the clerk of the village, town, or city, or if in the city of New York, the community board in which the proposed premise is located. When the municipality expresses an opinion for or against the granting of the license, the opinion shall be deemed part of the record and used by the OCM to determine whether to grant or deny the application. The Cannabis Control Board must then respond in writing to the city, town, village, or community board, with an explanation of how such opinion was considered in the granting or denial of an application. Adult-Use Taxation The MRTA establishes three taxes on adult-use cannabis. First, there is a tax imposed on the distributor based on the milligrams (mg) of total THC in the product. There are different rates of tax depending on the cannabis product form. • Edibles (e.g. food and beverages) are taxed at $0.03 per mg of total THC • Concentrates (e.g. vaporization oil, wax, shatter, and resin) are taxed at $0.008 per mg of total THC • Cannabis flower (e.g. loose flower, pre-rolls, or shake) are taxed at $.0005 per mg of total THC The mg per total THC tax accrues at the sale from a distributor to a retail dispensary and is paid to the State by the distributor. If the distributor is also the licensed retailer, such as a microbusiness or registered organization, the tax accrues at the time of the retail sale. Second, there is a state excise tax imposed on the sale of cannabis products by a retail dispensary to a cannabis consumer at 9 percent of the products’ price. Third, there is a local excise tax imposed on the sale of cannabis products by a retail dispensary to a cannabis consumer at four (4) percent of the products’ price. This tax is distributed to local governments based on where the retail dispensary is located. Twenty-five (25) percent of the tax revenue goes to the county and seventy-five (75) percent goes to the cities, town, or villages within the county as a proportion of cannabis sales. If a town and a village within the town both allow adult-use sales, the revenue shall be distributed based upon a distribution agreement between the town and village. If no such agreement exists, then the revenue distribution between the town and village shall be divided evenly. 3 Adult-Use Tax Revenue Distribution All adult-use cannabis taxes are deposited in the New York State Cannabis Revenue Fund. First, the Cannabis Revenue Fund covers the costs of administering the cannabis programs and the implementing the MRTA, including costs to the OCM’s operating costs, increasing Drug Recognition Expert training, and implementing incubators and workforce development for social and economic equity applicants. After upfront costs, the remaining tax revenue is distributed into three separate funds: • 40% to the State Lottery Fund for education • 40% to the Community Grants Reinvestment Fund to issue grants to non-profit and community-based organizations in communities disproportionally impacted by cannabis prohibition, and other social equity initiatives. • 20% to the Drug Treatment and Public Education Fund to development and implement statewide public education campaigns and provide substance use disorder treatment programs for youth and adults. Public Consumption (Smoking) The legislation adds cannabis to the existing Clean Indoor Air Act (CIAA), which establishes prohibitions on where cannabis can be smoked or vaporized. The smoking or vaporizing of cannabis is prohibited anywhere smoking tobacco is prohibited. Cannabis cannot be consumed when operating a motor vehicle. Pursuant to the CIAA, municipalities are authorized to make laws that are more restrictive than the CIAA. Home Cultivation of Cannabis New Yorkers 21 years of age and older can grow up to 6 cannabis plants in their home for personal use (3 mature plants and 3 immature plants) and a maximum of twelve plants per household (6 mature plants and 6 immature plants). Please be aware the home cultivation of cannabis is not allowed immediately. Pursuant to the MRTA, the home cultivation of cannabis is only permitted after the OCM issues regulations governing home cultivation of cannabis, which will occur within 18 months of the first adult-use retail sale. The MRTA also permits the home cultivation of medical cannabis for certified patients registered in the Medical Cannabis Program. Home cultivation for certified patients has an accelerated timeline, but is not authorized until the OCM issues regulations, which will occur on or before September 30, 2021. • Cannabis plants must be kept in a secure place and not accessible to any person under 21. • Home cultivated cannabis cannot be sold to anyone and is only intended for personal use. • The use of compressed gas solvents, such as propane or butane, to process or extract home cultivated cannabis, will not be allowed. • Local municipalities may enact and enforce regulations relating to home cultivation of cannabis, provided no municipality may completely ban or prohibit home cultivation. Personal Possession Adults over 21 can possess up to 3 ounces of cannabis and 24 grams of concentrated cannabis (like vaporization oil or an edible). Adults may possess up to five pounds of cannabis at their personal residence or grounds. Personal possession over the legal limit and the unauthorized sale of any amount of cannabis is illegal and subject to penalties. 4 Contact Us Please visit our website or contact us using the e-mail and phone number below for more information. Website: www.cannabis.ny.gov Call: 1-888-OCM-5151 Email: info@cannabis.ny.gov Overview On March 31, 2021, New York State enacted the Marihuana Regulation and Taxation Act (MRTA), which, among other things, legalized recreational adult-use of cannabis in New York. The legislative intent of MRTA was to regulate, control and tax cannabis, generate significant new revenue and make substantial investments in the communities and people most impacted by cannabis criminalization.1 For example, MRTA expunged the criminal records of many low-level marijuana offenders and offered these individuals entrepreneurial opportunities within the cannabis industry. Now, more than two years after its passage, some retail cannabis locations are open for business, with new locations opening every few weeks in recent months. The implementation of MRTA and the operation of an adult-use cannabis market presents new and unique issues for local governments, particularly for the cities, towns and villages that will have marijuana retail dispensaries and consumption sites located within their jurisdictions. The purpose of this report is to provide a brief background on MRTA and an overview of the financial and operational implications the Act may have for local governments as the industry develops. Background Upon the passage of MRTA, New York became the 15th state in the nation to legalize the recreational use of cannabis.2 MRTA regulates the lawful possession and use of marijuana for adults 21 and over and establishes a plan for the creation of a regulated and taxed industry for the growth, manufacture, delivery and sale of cannabis products.3 Even prior to MRTA, the State had amended the Penal Law in 2019, effectively “decriminalizing” the possession of small amounts of cannabis, thereby reducing the legal punishment and punitive damages associated with certain marijuana offenses.4 (As early as 2018, New York City had taken measures to shift its overall marijuana enforcement policies in an effort to reduce the number of arrests made for individuals found to be publicly consuming marijuana.5) The State has also allowed cannabis to be used for medical purposes, through a State-run program, since 2014.6 Oversight and Regulatory Agencies Among other things, MRTA created the Cannabis Control Board (CCB) and the Office of Cannabis Management (OCM).7 CCB serves as the approval and oversight body of the OCM and is responsible for approving the regulatory framework for New York’s marijuana industry, including issuing applications and licenses to cannabis businesses, per OCM’s recommendations. OCM is responsible for implementing the regulations adopted by CCB, including, but not limited to, the production, licensing, packaging, marketing and sale of marijuana, and processing of marijuana licenses.8 Thomas P. DiNapoli, State Comptroller OFFICE OF THE NEW YORK STATE COMPTROLLER Division of Local Government and School Accountability June 2023 Local Governments and Recreational Adult-Use Cannabis in New York State 2 Office of the New York State Comptroller June 2023 Conditional Licenses Although regulations for some cannabis business licenses are still being finalized, conditional licenses are currently being issued for three types of marijuana businesses: cultivators, processors and retail dispensaries.9 OCM has issued nearly 280 conditional licenses to allow hemp growers to cultivate cannabis for the recreational adult-use market.10 In addition, 40 processors have been granted conditional licenses to distribute marijuana products to duly licensed adult-use retail dispensaries.11 Both types of conditional licenses were originally set to expire on June 1, 2023, but were extended for an additional year, until June 1, 2024.12 Currently, OCM only grants Conditional Adult-Use Retail Dispensary (CAURD) licenses for retail distribution to business and nonprofit applicants that meet additional criteria meant to promote MRTA’s social and economic equity justice goals.13 OCM provides all qualifying criteria for eligibility on its website.14 As Figure 1 shows, OCM has issued a total of 255 CAURD licenses as of the release of this report, concentrated largely in New York City and Long Island.15 A preliminary injunction stemming from a federal lawsuit filed in September 2022 temporarily enjoined OCM from issuing CAURD licenses in the Central New York, Finger Lakes, Mid-Hudson and Western New York regions. The injunction was narrowed in April 2023, allowing OCM to issue CAURD licenses in all regions with the exception of the Finger Lakes. On June 1, 2023, the court approved a settlement agreement that, among other things, terminates the injunction, and the case was dismissed.16 So far, only 15 of these licensees are “active,” meaning the retail dispensary is open for business: eight in New York City and one each in Albany, Binghamton, Ithaca, Plattsburgh, Rensselaer, Schenectady and Syracuse.17 FIGURE 1 Number of Conditional Adult-Use Retail Dispensary Licenses Issued in New York State by Region Source: New York State Office of Cannabis Management (OCM). Note: Data as of June 20, 2023. There are six licenses that have been awarded to operators for which a location has not been provided; therefore, these licenses are not included in the regional counts above. There are currently 15 active retail dispensaries in the State: eight in New York City and one each in Albany, Binghamton, Ithaca, Plattsburgh, Rensselaer, Schenectady and Syracuse. Of the active licenses, five offer temporary delivery only until a retail storefront is established. Western New York Finger Lakes Mid- Hudson Capital District Long Island Central New York New York City North Country Mohawk Valley Southern Tier Cities with One or More Active Retail Dispensaries 120 Rensselaer Schenectady FIGURE 1 Number of Conditional Adult-Use Retail Dispensary Licenses Issued in New York State by Region Source: New York State Office of Cannabis Management (OCM). Notes: There are six licenses that have been awarded to operators for which a location has not been provided; therefore, these licenses are not included in the regional counts above. There are currently 15 active retail dispensaries in the State: eight in New York City and one each in Albany, Binghamton, Ithaca, Plattsburgh, Rensselaer, Schenectady and Syracuse. Of the active licenses, five offer temporary delivery only until a retail storefront is established. 3June 2023 Division of Local Government and School Accountability Local Government Impact Opting Out MRTA allowed towns, cities and villages to request that CCB prohibit the granting of retail dispensary licenses and/or on-site consumption licenses within their jurisdictions, by passing a local law, subject to permissive referendum, prior to December 31, 2021.18 (In the case of a town, requesting such a prohibition would only apply to the area of the town outside any village that did not pass such a law.) Once the deadline had passed, local governments could no longer request such a prohibition. Municipalities that adopted local laws requesting to “opt out” before the deadline can opt back in at any time by repealing their local law. According to the Rockefeller Institute of Government, this limited opt-out window, as well as the lack of clarity on the licensing requirements and other rules and regulations for marijuana retail businesses, may have created an incentive for some communities to opt out in the first instance, pending further discussion or gaining a better sense of what the recreational marketplace would look like.19 As shown in Figure 2, more than half (845 out of 1,528) of municipalities in New York State opted out of hosting retail dispensaries or consumption sites, or both. Nearly 86 percent of these local governments opted out of allowing both types of cannabis businesses, although 118 (14 percent) opted out of hosting consumption only.20 Regionally, Long Island had the highest percentage of municipalities that opted out (83 percent of total), followed by the Mid-Hudson region (71 percent); the Mohawk Valley region had the lowest percentage (30 percent). Opting out of consumption sites alone was particularly common in the Capital District, where 21 percent of all municipalities made this choice. New York City is a single market and an entire region and did not opt out. FIGURE 2 Cities, Towns and Villages in New York State that Opted Out of Allowing Retail Dispensaries and/or Consumption Sites by Region Source: OCM. Note: Data as of January 12, 2023. A municipality that opted out of allowing retail dispensaries and/or consumption sites before December 31, 2021 can, at any time, opt back in by repealing the local ordinance. Western New York Finger Lakes Mid- Hudson Capital District Long Island Central New York New York City North Country Mohawk Valley Southern Tier FIGURE 2 Cities, Towns and Villages in New York State that Opted Out of Allowing Retail Dispensaries and/or Consumption Sites by Region Source: OCM. Notes: A municipality that opted out of allowing retail dispensaries and/or consumption sites before December 31, 2021 can, at any time, opt back in by repealing the local ordinance. 4 Office of the New York State Comptroller June 2023 As Figure 3 shows, by type of local government, villages were most likely to opt out of at least one form of hosting (60 percent), followed by towns (55 percent), while cities were least likely (23 percent). Regionally, there is some variation to this. For example, all categories of local governments on Long Island had high opt-out rates (including both of its cities), whereas Western New York showed a particularly stark contrast between its cities (none of which requested to opt out) and its towns (over 60 percent of which requested to opt out). FIGURE 3 Percentage of Municipalities in New York State that Opted Out of Allowing One or More Type of Cannabis Business by Class and Region Source: OCM. Note: Data as of January 12, 2022. A municipality that opted out of allowing retail dispensaries and/or consumption sites before December 31, 2021 can, at any time, opt back in by repealing the local ordinance. New York City is excluded from the chart above because it is a single market that did not opt out of hosting any type of cannabis business. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% CapitalDistrict CentralNY FingerLakes LongIsland Mid-Hudson MohawkValley NorthCountry SouthernTier WesternNY Total Cities Towns Villages FIGURE 3 Percentage of Municipalities in New York State that Opted Out of Allowing One or More Type of Cannabis Business by Class and Region Source: OCM. Notes: A municipality that opted out of allowing retail dispensaries and/or consumption sites before December 31, 2021 can, at any time, opt back in by repealing the local ordinance. New York City is excluded from the chart above because it is a single market that did not opt out of hosting any type of cannabis business. 5June 2023 Division of Local Government and School Accountability The City of Binghamton in Broome County is home to the third operational licensed cannabis dispensary in the State and the first located outside of New York City.22 In October 2022, Binghamton amended its zoning ordinance to allow certain cannabis businesses to operate in certain zoning districts.23 Generally, Binghamton’s zoning ordinance classifies each cannabis business operating within its jurisdiction on the basis of its respective commercial activity, including retail (i.e., dispensary or delivery), on-site consumption, or industrial (e.g., cultivator, distributor and processor), and regulates the location of the business on the basis of its classification.24 In other words, these regulations restrict where all or some of the cannabis businesses can operate within Binghamton. For example, Binghamton’s zoning ordinance prohibits cannabis businesses from operating in residential zoning districts, certain medical districts, and certain neighborhood office and commercial districts, and permits cannabis businesses (depending on their respective classifications) to operate in certain business, commercial and industrial districts.25 Example of Local Zoning Regulations Local Control of Cannabis Businesses Except for the opt-out provisions discussed above, municipalities are preempted by the State from adopting any laws, rules, ordinances, regulations or prohibitions related to, among other things, the operation and licensure of adult-use cannabis businesses. However, cities, towns and villages may pass local laws and regulations governing the time, place and manner of operation of retail dispensaries and consumption sites, provided such law or regulation does not make the operation of such dispensaries or sites unreasonably impracticable, as determined by CCB. For instance, these municipalities can pass local laws and regulations pertaining to local zoning and the location of such cannabis businesses, the hours of operation and adherence to local building codes.21 Adult-Use Cannabis Tax and Revenue Distribution MRTA imposes an excise tax on adult-use cannabis at every level of the distribution chain. Distributors pay a tax based on the number of milligrams of THC in the product. Two additional taxes are then imposed on the retail sale price, one for 9 percent (for New York State) and one for 4 percent (for local governments). All taxes eventually get reflected in the price paid by the consumer.26 Taxes are remitted to the New York State Department of Taxation and Finance (Tax and Finance) on a quarterly basis.27 Of the three excise taxes, the revenues from the 4 percent tax are distributed to the counties, cities, towns and villages in which the retail dispensary is located. Tax and Finance is responsible for certifying the amount of tax, penalties and interest attributable to retail sales of cannabis products within New York City and the counties outside the City and paying such amounts (less any amounts reserved for refunds and reimbursements) to the Office of the New York State Comptroller (OSC). In turn, OSC is responsible for distributing the local tax revenue to New York City and the counties, which it anticipates doing in the month following the end of the previous quarter.28 6 Office of the New York State Comptroller June 2023 Each county is entitled to retain 25 percent of the 4 percent excise tax, and within 30 days of receipt of such revenue, the county is responsible for distributing the remaining 75 percent to the cities (excluding New York City), towns and villages in proportion to the sales of adult-use cannabis products by retail dispensaries within such municipalities. If a town and a village within the town both allow adult-use sales, the county is responsible for distributing the revenue attributable to those sales to the town and village based upon the proportion agreed to by the town and village. If no such agreement exists, the county is required to evenly divide and distribute the revenue to the town and village.29 As noted, there are currently 15 active cannabis retail dispensaries in New York. Since some of those dispensaries only recently opened their doors, the amount of local tax revenue generated from cannabis sales, thus far, has been minimal. However, tax revenues will increase as existing retailers begin to make sales and new establishments come online. Looking Forward New York’s recreational adult-use cannabis industry represents a new legalized industry and, as such, its development is a complicated endeavor with many moving parts and participants. Both the timing and the magnitude of the financial, operational and societal impacts are unclear and merit close monitoring and a willingness on the part of all stakeholders to work together to ensure that the goals of the act are met and the benefits envisioned are realized. Local governments that have not opted out may soon see new cannabis retail or consumption businesses now that regulations are in place and licenses are being issued. Local officials should be aware of the potential new challenges and benefits from these businesses, including the local tax revenue they generate, and familiarize themselves with their role in the process. OCM has information for local officials on their website, at https://cannabis.ny.gov/local-government. OSC will continue to monitor the effects of retail adult-use cannabis sales on municipal finances and to emphasize the importance of transparency throughout the continued growth of the State's legal and regulated cannabis marketplace. For more information, guidance and additional resources on adult-use cannabis for local governments, go to OSC’s website at www.osc.state.ny.us/local-government/resources/adult-use-cannabis-auc. 7June 2023 Division of Local Government and School Accountability 1 Marihuana Regulation and Taxation Act (MRTA) § 2. The New York State Office of Cannabis Management (OCM) uses the term “cannabis” instead of the term “marijuana.” For more information, see “General Information,” at https://cannabis.ny.gov/adult-use-information. 2 Luis Ferre-Sadurni, “New York Legalizes Recreational Marijuana, Tying Move to Racial Equity,” New York Times, March 31, 2021, at www.nytimes.com/2021/03/31/nyregion/cuomo-ny-legal-weed.html. 3 Laws of 2021, Chapter 92. 4 Laws of 2019, Chapter 131, amended certain provisions of the New York State Penal Law. 5 “Mayor de Blasio, Commissioner O’Neill Unveil New Policy to Reduce Unnecessary Marijuana Arrests,” New York City Police Department, June 19, 2018, at www.nyc.gov/site/nypd/news/pr0619/mayor-de-blasio-commissioner-o- neill-new-policy-reduce-unnecessary-marijuana-arrests. 6 Laws of 2014, Chapter 90, created, among other provisions, Title V-A in Article 33 of the New York State Public Health Law. 7 MRTA, Article 2, Section 7 and 8. 8 OCM, “About the Office of Cannabis Management,” at https://cannabis.ny.gov/about-0. 9 For more information on the cannabis business regulations that have been approved, or are currently being proposed, see OCM, “Proposed and Revised Rulemaking and Regulator History (All),” at https://cannabis.ny.gov/proposed- revised-rulemaking-and-regulatory-history-all. 10 OCM, “List of AUCC Licenses,” accessed on June 22, 2023, at https://cannabis.ny.gov/adult-use-conditional-cultivator. 11 OCM, “List of AUCP Licenses,” accessed on June 22, 2023, at https://cannabis.ny.gov/adult-use-conditional-processor. 12 Laws of 2023, Chapter 135, amended MRTA, Sections 68-c and 69-a. 13 MRTA § 87(1)(3). 14 OCM, “CAURD FAQ,” at https://cannabis.ny.gov/caurd-faq. Licensed retail cannabis operators are also granted “delivery authorization,” which permits them to, among other things, make delivery sales directly to cannabis consumers. For more information, see OCM, CAURD: Delivery Guidance, at https://cannabis.ny.gov/system/files/ documents/2023/05/caurd-delivery-guidance_0.pdf. 15 OCM, “CAURD Licenses,” accessed on June 22, 2023, at https://cannabis.ny.gov/conditional-adult-use-retail- dispensary. There are six licenses that have been awarded to operators for which a location has not been provided; therefore, these licenses are not included in any regional counts. 16 Variscite N.Y. One, Inc. v. New York., 1:22-cv-1013 (GLS/DJS) (N.D.N.Y. Jan. 31, 2023). On June 1, 2023, a settlement between OCM and the plaintiff, Variscite N.Y. One, Inc., was approved by the federal court and the case was dismissed. According to the resolution, OCM agrees to issue one adult-use license to the plaintiff when those licenses become available, in exchange for the lawsuit being dismissed and the injunction being terminated, which allows the conditional adult-use cannabis retail dispensary licenses to be issued in the Finger Lakes region. 17 OCM, “Dispensary Location Verification,” accessed on June 22, 2023, at https://cannabis.ny.gov/dispensary- location-verification. Currently, 5 of the 15 active licenses offer temporary delivery only until a retail storefront is established. Notes 8 Office of the New York State Comptroller June 2023 Notes 18 MRTA § 131(1). The local laws prohibiting OCM from issuing retail dispensary and/or on-site consumption licenses are subject to permissive referendum. 19 Heather Trela, “To Opt In or Opt Out – That is the Question for NYC Municipalities,” Rockefeller Institute of Government, October 29, 2021, at https://rockinst.org/blog/to-opt-in-or-opt-out-that-is-the-question-for-nys-municipalities/. According to the tracking data, as of June 8, 2023, a total of 19 local governments have either passed a referendum that reverses their initial opt out, or voters overturned the opt out, for allowing a retail dispensary and/or consumption site, of which 11 of them did so after the legal deadline. For more information, see “Marijuana Opt-out Tracker,” at https://rockinst.org/issue-areas/state-local-government/municipal-opt-out-tracker/. 20 OCM, “OCM Local Opt Out Data,” accessed on June 8, 2023, at https://cannabis.ny.gov/ocm-local-opt-out-data. 21 MRTA § 131(2). For more information on Local Control and Preemption, see OCM, What is in the Law: Local Governments, at https://cannabis.ny.gov/system/files/documents/2021/09/cannabis-management-fact- sheet-9-21-local-government-06.pdf. 22 “Mayor Kraham Announces First Retail Cannabis Location,” City of Binghamton, February 8, 2023, at www.binghamton-ny.gov/Home/Components/News/News/279/15. 23 Ordinance No. 022-142 amending the Code of the City of Binghamton, Chapter 410. 24 Chapter 410 of the City of Binghamton's Code. 25 Ordinance No. 022-142 amending the Code of the City of Binghamton, Chapter 410. 26 Tax Law § 493. For more information on the State and local taxes imposed on sales of adult-use cannabis, see OCM, What is in the Law: Taxation and Revenue, at https://cannabis.ny.gov/system/files/documents/2022/04/cannabis- management-fact-sheet-taxation-03.pdf. 27 Tax Law §§ 493 and 495. 28 OSC anticipates that most of the revenue associated with these payments will be distributed in January, April, July and October after adult-use cannabis retailers have filed their quarterly tax returns and remitted payment of taxes due to the New York State Department of Taxation and Finance. However, distributions may be made in other months, depending on when returns are filed. 29 Tax Law § 496-b(2) and OCM, What is in the Law: Taxation and Revenue. 9June 2023 Division of Local Government and School Accountability Division of Local Government and School Accountability 110 State Street, 12th Floor, Albany, NY 12236 Tel: 518.474.4037 • Fax: 518.486.6479 Email: localgov@osc.ny.gov www.osc.state.ny.us/local-government Technical Assistance is available at any of our Regional Offices BINGHAMTON REGIONAL OFFICE Tel 607.721.8306 • Fax 607.721.8313 • Email Muni-Binghamton@osc.ny.gov Counties: Broome, Chemung, Chenango, Cortland, Delaware, Otsego, Schoharie, Tioga, Tompkins BUFFALO REGIONAL OFFICE Tel 716.847.3647 • Fax 716.847.3643 • Email Muni-Buffalo@osc.ny.gov Counties: Allegany, Cattaraugus, Chautauqua, Erie, Genesee, Niagara, Orleans, Wyoming GLENS FALLS REGIONAL OFFICE Tel 518.793.0057 • Fax 518.793.5797 • Email Muni-GlensFalls@osc.ny.gov Counties: Albany, Clinton, Columbia, Essex, Franklin, Fulton, Greene, Hamilton, Montgomery, Rensselaer, Saratoga, Schenectady, Warren, Washington HAUPPAUGE REGIONAL OFFICE Tel 631.952.6534 • Fax 631.952.6530 • Email Muni-Hauppauge@osc.ny.gov Counties: Nassau, Suffolk NEWBURGH REGIONAL OFFICE Tel 845.567.0858 • Fax 845.567.0080 • Email Muni-Newburgh@osc.ny.gov Counties: Dutchess, Orange, Putnam, Rockland, Sullivan, Ulster, Westchester ROCHESTER REGIONAL OFFICE Tel 585.454.2460 • Fax 585.454.3545 • Email Muni-Rochester@osc.ny.gov Counties: Cayuga, Livingston, Monroe, Ontario, Schuyler, Seneca, Steuben, Wayne, Yates SYRACUSE REGIONAL OFFICE Tel 315.428.4192 • Fax 315.426.2119 • Email Muni-Syracuse@osc.ny.gov Counties: Herkimer, Jefferson, Lewis, Madison, Oneida, Onondaga, Oswego, St. Lawrence STATEWIDE AUDIT Tel 607.721.8306 • Fax 607.721.8313 • Email Muni-Statewide@osc.ny.gov Andrea C. Miller Executive Deputy Comptroller Executive • 518.474.4037 Simonia Brown, Assistant Comptroller Randy Partridge, Assistant Comptroller Audits, Local Government Services and Professional Standards • 518.474.5404 (Audits, Technical Assistance, Accounting and Audit Standards) Local Government and School Accountability Help Line • 866.321.8503 or 518.408.4934 (Electronic Filing, Financial Reporting, Justice Courts, Training) Division of Legal Services Municipal Law Section • 518.474.5586 New York State & Local Retirement System Retirement Information Services Inquiries on Employee Benefits and Programs 518.474.7736 BUFFALO BINGHAMTON ROCHESTER SYRACUSE GLENS FALLS NEWBURGH HAUPPAUGE osc.state.ny.us Contacts Like us on Facebook at facebook.com/nyscomptroller Follow us on Twitter @nyscomptroller Contact Office of the New York State Comptroller Division of Local Government and School Accountability 110 State Street, 12th floor Albany, NY 12236 Tel: (518) 474-4037 Fax: (518) 486-6479 or email us: localgov@osc.ny.gov www.osc.state.ny.us/local-government