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Without fanfare or a public appearance, New York Gov. Andrew Cuomo signed a bill legalizing adult use cannabis last week, creating the biggest market on the east coast. The enactment of New York’s Marijuana Regulation and Taxation Act came just five weeks after Gov. Phil Murphy signed New Jersey’s legal market into existence.

With a bigger, more prominent neighbor officially a green state so early into the era of a fully staffed Cannabis Regulatory Commission, will all of New Jersey’s legislative fits and starts end up coming back haunt the legal market here?

Industry experts say no, not necessarily.

“For as much criticism as we give to our legislature, our legislature has created a framework that does give us a leg up for a number of reasons,” said Mike McQueeny, counsel at Foley Hoag in Newark. “First is timeline – [adult-uses must start between] August 22 of this year [and] February 22 of next year. These are hard and fast deadlines we have to meet, and New York has no such deadlines.

There’s nothing pushing on the regulatory body there. And because it has a multi-tiered regulatory structure, my anticipation is it’ll take much more time to determine what those rules look like.”

New Jersey’s tax rate is also lower than New York’s, McQueeny noted, with state sales tax and up to a 2% local tax capping out at about 9% in New Jersey, and state sales tax and local tax capping out at about 13% in New York.

“I think a lot of folks will be doing the math to figure out gas, tolls, and fees for going over the bridge, how those numbers even out,” McQueeny said.

NOT SO FAST

To someone who just tuned in, New York’s path to legalization might have seemed to go without any challenges —Cuomo said in a press conference March 15 that legislators were closing in on a deal, and his signature was affixed on March 30—similar bills have been introduced numerous times over the years.

But credit for the speed of the last two weeks goes to “having strong advocates like Crystal Davis Peoples-Stokes, Liz Krueger, and Andrea Stewart-Cousins,” Bressler, Amery & Ross Associate Jessica Gonzalez said. “You had these three women driving these conversations for years.”

“Truthfully something that also helped catalyze it is that, for many years, Cuomo was set in his ways and didn’t want to compromise with the legislature – but given the fact that he was involved in certain scandals, he was more willing to compromise on things like the social equity provisions and the tax rate,” Gonzalez said. “And the fact that [activists] were calling on him to resign coupled with the fact that New Jersey legalized, Pennsylvania is talking about it, and Connecticut is talking about, all of that helped push this further fairly quickly.”

Gonzalez said she doesn’t see New York’s legalization having too much of an effect on New Jersey’s timeline, but believes the social equity portions of the bill will have far-reaching effects on the laws of other states, serving as “a model.”

How much of a model?

Cannabis regulator and activist Dasheeda Dawson won’t call New York or New Jersey’s cannabis programs equitable—not yet. As the head of the cannabis program in Portland, Ore., she knows that the laws, rules, and regulations can seem equitable on paper, but until they’re implemented as such, they’re just equity-centered.

New York’s law is the most equity-centered in more ways than one, she said, starting with the automatic expungement of low-level cannabis offenses. It also sets aside 40% of all tax revenues for communities most harmed by the war on drugs and sets the goal of giving 50% of licenses to equity applicants—people from communities affected by prohibition, women, minorities, distressed farmers and service-disabled veterans. The bill doesn’t leave behind patient equity, either, as it both strengthens the medical program and allows for patient’s to grow up to six plants at home.

New York’s bill had to be equity-centered: The state has arrested more people for low-level cannabis offenses than any other, though New Jersey isn’t far behind at No. 3.

“I think that [legalization in] New York forces [New Jersey’s] hand, especially if you think of north New Jersey – there’s a lot of us that are ‘New York-New Jerseyans’ and bridge and tunnel folk,” Dawson said. “New Jersey will have to step up to incentivize more people from the legacy market and all the things that people are shopping into the legal market; That means really leaning into the equity aspects and pushing back on municipalities [to do the same.]”

The way New Jersey should do that, from Dawson’s perspective, is for the areas where people of color have suffered the most inequity in cannabis prohibition, such as Hunterdon County, where Black people are 10 times more likely to be arrested for cannabis offenses than white people, to right their wrongs.

“Are you using your cannabis revenue to make sure anyone who has been arrested is cleared and not just that, but there’s restitution for any of the loss of jobs, home, children? Those are the things that are collateral damage. When you have places that are predominantly white and rich, that means you need to start there,” Dawson said.

Without their feet held to the fire, Dawson doesn’t expect the leaders from primarily wealthy, white communities to do that on their own, thus shining light on the importance of the CRC.

OPERATORS REACT

Several operators with a New Jersey presence expressed enthusiasm about the deal.

Green Thumb Industries CEO Ben Kovler applauded the legislation, because it “will generate much-needed jobs and tax revenue while advancing social equity and criminal justice reforms;” and Curaleaf CEO Joe Bayern said it will bring “economic relief and opportunity to the communities most impacted by the war on drugs…[and] ensure community and economic investment are directed where they are needed most, especially in the wake of the pandemic.”

GTI and Curaleaf’s support come as no surprise, as both have a presence in New York.

Harmony Dispensary owner and CEO Shaya Brodchandel, though, also showed support for New York’s legalization, despite not having a New York outpost himself.

“At Harmony, we consider access to cannabis anywhere to be a win. And while our locations are close to New York, we are very much looking forward to serving the patients throughout Hudson County and North Jersey,” Brodchandel said.