After several years during which the Legislature and the Governor were at odds, agreement was finally reached and on March 31, 2021, Governor Andrew Cuomo signed the Marihuana Regulation and Taxation Act legalizing adult use cannabis and expanding the existing medical marihuana program. In addition to the retail dispensaries for medical and general adult use, the law authorizes all adults to cultivate limited quantities of cannabis once retail sales commence. New York thus becomes the sixteenth state to fully legalize cannabis.
The law sets up multiple types of licenses: cultivator, processor, distributor and retailer. Specific provision is made for small business and cooperative licensees. Current medical registered organizations are authorized to apply for adult use retail licenses, and are the only class of licensee allowed to vertically integrate cultivation, processing, distribution and retail sale under single ownership. The law establishes as the regulatory body the Cannabis Control Board within the New York State Liquor Authority.
The Board is directed to promulgate regulations addressing a wide variety of topics, including environmental concerns generally and pesticides specifically. In consultation with the State Department of Agriculture and Markets and Department of Environmental Conservation the Board is directed to promulgate regulations “governing the safe production of cannabis, including environmental and energy standards and restrictions on the use of pesticides and best practices for water and energy conservation.”
The Act also identifies environmental concerns among the selection criteria for licensing. Regulations are to be promulgated which will require consideration, among other criteria, of whether an applicant has demonstrated “the ability to increase climate resiliency and minimize or eliminate adverse environmental impacts, including but not limited to water usage, energy usage, carbon emissions, waste, pollutants, harmful chemicals and single use plastics.” In addition, if the application is for an adult use cultivator or processer license, the applicant must identify “the environmental and energy impact, including compliance with energy standards, of the facility to be licensed.”
Cultivator licensees are subject to additional requirements. Again in consultation with the State Department of Agriculture and Markets and Department of Environmental Conservation the Board is directed to promulgate regulations addressing “sustainable farming principles and practices such as organic, regenerative, and integrated pest management models to the extent possible, and shall restrict whenever possible, the use of pesticides to those that are registered by the department of environmental conservation or that specifically meet the United States environmental protection agency registration exemption criteria for minimum risk, used in compliance with rules, regulations, standards and guidelines issued by the department of environmental conservation for pesticides.”
Finally processors of hemp, a separate license category, are required to “take such steps necessary to ensure that the cannabinoid hemp or hemp extract used in their processing operation has only been grown with pesticides that are registered by the department of environmental conservation or that specifically meet the United States environmental protection agency registration exemption criteria for minimum risk, used in compliance with rules, regulations, standards and guidelines issued by the department of environmental conservation for pesticides.”
These new requirements are actually likely to bring more transparency about the operations of all aspects of cannabis businesses than has been the case with the existing medical registered organizations. The Department of Environmental Conservation has resisted disclosing the identity of pesticides approved for use in the existing medical program. That information will now presumably become public. None of the other environmental concerns required to be addressed were ever regulated or considered in granting the ten existing medical registered organization licenses. The scope of the regulations of such factors will be determined by the rulemaking, which is bound to attract significant attention from both the industry and advocacy organizations. For example, energy requirements in Massachusetts are sufficiently rigorous such that only LED lighting is able to meet the requirements.