About half of New York state’s towns have opted out of the nascent Cannabis industry, according to the Rockefeller Institute of Government. New York’s adult-use marijuana law, passed by the state legislature and signed into law by then-Governor Andrew Cuomo in the spring of 2021, established a December 31, 2021 deadline for jurisdictions to opt out of the recreational pot industry. Ultimately, about 49 percent of the state’s 1,521 towns decided against allowing dispensaries in their jurisdiction and 55 percent chose not to allow consumption sites.
While significant, there were far fewer opt outs in New York than in neighboring New Jersey, which reported 70 percent of its towns chose to ban the Cannabis industry.
According to industry insiders, most New York municipalities chose to opt out because they wanted more information about the state’s pot program before allowing it to move forward in their jurisdiction. So far, the state has failed to explain how local governments can regulate aspects of the industry like advertising and hours of operation for retailers.
Towns that chose to opt out are giving up their share of the tax revenue generated by legal Cannabis – local jurisdictions will receive 4 percent of the 13 percent excise tax on pot sales, with the other 9 percent going to the state. Towns that simply did nothing were automatically enrolled in the Cannabis industry.
Experts expect New York to become the second largest marijuana market in the country, after California, with projected sales estimates as high as $4.2 billion. However, towns that opted out are passing up on more than just pot tax revenue. Foot traffic is expected to rise in jurisdictions that allow retail pot sales or consumption sites, leading to an increase in business revenue in those towns. Likewise, real estate prices are expected to increase in those jurisdictions as home values rise.
Fortunately, the pot industry bans don’t last forever and towns can opt back in to the industry through a vote by local government. Additionally, opt outs only apply to dispensaries and consumption sites. Jurisdictions can’t opt out of marijuana cultivation and manufacturing by licensed businesses, and adults may legally possess and consume Cannabis regardless of their town’s opt out status.
