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Law360 (May 14, 2020, 7:58 PM EDT) -- A cannabis industry trade association urged the governors of several Northeastern states Thursday to legalize cannabis as they start to reopen to make up tax revenue lost to the novel coronavirus pandemic.
The National Association of Cannabis Businesses asked the governors of New York, New Jersey, Connecticut, Delaware, Pennsylvania, Rhode Island and Massachusetts to pass legislation to fully legalize cannabis as the states begin to reopen. Legalizing cannabis sales and encouraging retailers to employ strategies such as home delivery and curbside pickup would generate millions of dollars in tax revenue to replace revenue lost to the pandemic, the group said in a statement.
"In states where cannabis has already been legalized, the industry is boosting small business and minority entrepreneurship, creating jobs and generating millions of dollars in state tax revenue," said Gina Kranwinkel, the association's chief executive officer.
Legalizing adult cannabis is a logical next step because most states that allow legal cannabis have deemed those businesses as essential during the pandemic, according to the statement. The organization said it is consulting with state leadership on cannabis legalization policy design and implementation.
Democratic Gov. Andrew Cuomo planned to try again to legalize and tax recreational cannabis this year through his executive budget for the 2021 fiscal year, but a final budget didn't include those provisions. Under his proposal, tax would have been imposed on cannabis cultivation and on sales of cannabis to dispensaries and would allow an additional 2% tax on the invoice price for cities or counties with populations of 1 million or more.
Legislation was also introduced February in Connecticut to legalize and tax the retail sale of cannabis while exempting cannabis used for palliative purposes from sales or excise tax. The proposed bill, H.B. 5130, would dedicate the revenue to drug awareness education, testing for potency or illicit substances, studying the impact of legalization and consumption and homeless services.
In 2019, legislation was proposed in Delaware to impose a 15% tax on retail marijuana and establish a state tax deduction for marijuana establishments' necessary business expenses. It would allow people 21 and older to legally possess and consume up to 1 ounce of marijuana for personal use.
Rhode Island Gov. Gina Raimondo, a Democrat, has proposed legalizing adult-use cannabis and having the state control sales by contracting with operators to run recreational cannabis retail stores. Pennsylvania Gov. Tom Wolf, also a Democrat, has also come out in support of legalizing recreational marijuana.
Last month a coalition of cannabis trade organizations sent a letter to congressional leaders to amend the Coronavirus Aid, Relief and Economic Security Act
to include the state-legal cannabis industry and allow those companies to access loans, tax credits and other assistance.Representatives of the state governors did not immediately respond to requests for comment Thursday.
--Additional reporting by Elise Hansen, James Nani and Daniel Tay. Editing by Neil Cohen.
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