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New York Legalized Recreational Marijuana- Important Updates to Know

In March of 2021, the State of New York legalized recreational marijuana with the Marijuana Regulation and Taxation Act (MRTA). The act is expected to generate thousands of jobs and hundreds of millions of dollars in revenue through a 9% state tax and 4% legal tax. Subsequently, 40% of total revenue will go towards various minority community-based programs.

Additionally, the bill allows consumers to

  • Purchase and possess up to three ounces of cannabis flower and up to 24 grams of concentrated cannabis
  • Store up to five pounds of cannabis at their residence

The Office of Cannabis Management (OCM) will be working to monitor the regulation of both the recreational and medical cannabis markets. They will be overseen by the new Cannabis Control Board (CCB) which will be controlled by five members. The governor appoints the first member while the state Senate and state Assembly appoint the second and third members.

Since the announcement  was made that New York legalized recreational marijuana, the OCM is not accepting any applications until they have finalized the remaining rules and application process. However, they have set the types of licenses that they will eventually accept as follows:


This allows the licensee to acquire, possess, distribute, and sell cannabis from a licensed cultivator, processer, or organization to retail dispensaries. These licensees may not have any ownership interest in a retail dispensary license or an on-site consumption license. If a distributor also has a cultivation or processing license then they can only distribute their own products.


Allows for the licensee to plant, grow, clone, cure, dry and trim cannabis. They may only sell to licensed processors and hold one additional processor license and one distributor’s license for the sole purpose of distributing their products. They may not hold a retail dispensary or on-site consumption license. The CCB may eventually allow for more than one license per location- this has yet to be determined.


This license allows for processing activities including:

  • Blending new york cannabis
  • Extracting
  • Packaging
  • Infusing
  • Labeling
  • Branding
  • Any other steps involved in preparing cannabis products.

Processors may not hold any ownership interest in a retail dispensary license or on-site consumption license but may perform processor activities at various locations.


Licensees may produce, sale and distribute clones, immature plants, seeds, and other agricultural products used specifically for:

  • Planting
  • Propagation
  • Cultivation

of cannabis by licensed cultivators, microbusinesses, or cooperatives. Individuals with a cultivator license may also hold one other nursery license.


This allows for limited cultivation, processing, distribution, dispensing, and delivery of their own cannabis products to dispensaries. Moreover, these licensees may not hold any other kinds of licenses.

Additional Updates

The bill has implemented worker protection measures that make it illegal for employers to discriminate against individuals for legal cannabis use.

Home cultivation is not immediately permitted but residents may immediately use marijuana recreationally. New Yorkers over 21 may grow up to six plants for personal use once all rules and regulations have been set. Official sales will begin on April 1, 2022. Until then, the OCM will work to finalize and publish all rules and regulations.

Ultimately, local municipalities will have the option to opt-out of allowing cannabis sales within their borders. As a result, they will not receive any tax revenue generated. To ban sales, they will need to pass a local law or ordinance by December 31, 2021. However, they may opt back in at any time. It is important to note that it is not allowed to ban anyone from possessing cannabis.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.