[This posting is not intended to be legal advice, or a substitute for consultation with a lawyer, but I hope you’ll find it informative.]
The focus last spring when New York State enacted the Marijuana Regulation & Taxation Act [MRTA] was on the “adult-use” aspect of the law – that adults 21 years of age or older may legally use and possess cannabis. Attention was also shown the social and economic equity aspects of the new cannabis law, its recognition of the devastating collateral consequences and racially disparate impact of existing cannabis laws, and MRTA’s goal of promoting racial, ethnic and gender diversity.
But the media rarely addressed the many other questions raised by MRTA, from where cannabis-related facilities – such as retail shops and “pot farms” – will be located, to what role, if any, local communities, residents and taxpayers will have in the decision-making process.
To understand what powers local municipalities have or don’t have under MRTA, one needs to know the types of activities requiring a license to operate under the nascent cannabis law. [Note: I will not be writing here about medical marijuana or hemp, subjects also included in the comprehensive legislation]. The primary activities, as defined at Section 3 of MRTA, are:
– Cultivation, the growing, cloning, harvesting, drying, curing, grading, and trimming of cannabis.
– Processing, the extraction of concentrated cannabis and/or compounds, and the blending, extracting, or otherwise manufacturing concentrated cannabis or cannabis products (such as edibles or vaporization oil).
– Distribution, the selling at wholesale of cannabis and/or cannabis products (except medical cannabis).
– Retail sale, the selling at retail of adult-use cannabis and cannabis products to cannabis consumers.
– On-site consumption, the consumption of cannabis (smoking or vaping) in an area licensed under MRTA.
Local Municipalities and Adult-use Retail Dispensaries & On-Site Consumption
A. Opt-out Potential.
Not surprisingly, municipalities have no authority to make adult-use of cannabis illegal within their boundaries. And, of the five activities outlined above, MRTA provides a city, town, or village the power to “opt-out” of – that is, choose to prohibit from locating within their jurisdiction – only two categories of adult-use cannabis activities, “retail dispensaries” and “on-site consumption.” [MRTA Section 131(1)]
But the authority to opt-out comes with two major caveats: First, a municipality must pass a local law by December 31, 2021 to opt-out of allowing adult-use cannabis retail dispensaries and/or on-site consumption operations withing its boundaries. If it doesn’t, the city, town, or village will be unable to opt-out at a later date. Second, any local law opting out of adult-use retail dispensaries or on-site consumption licenses is subject to a permissive referendum, pursuant to Section 24 of the Municipal Home Rule Law, giving local voters the ability to petition for the right to decide whether or not to approve the local law. [MRTA Section 131(1)-(2)]
Given the fast-approaching December 31, 2021 deadline for enactment of local laws opting out of retail dispensaries or on-site consumption sites, local officials – as well as, residents and organizations interested in educating or influencing their local representatives concerning the opt-out issue – do not have the luxury of zoning out, daydreaming, or otherwise ignoring this one-time option.
B. Time-Place-Manner Regulations.
Municipalities do not face an all-or-nothing decision regarding retail dispensaries and on-site consumption operations. The MRTA allows villages, towns, and cities to adopt regulations – through its local zoning powers – addressing the time, place and manner of such activities. Here is how that authority is described by the Office of Cannabis Management:
[T]owns, cities and villages are permitted to pass local laws and regulations governing the time, place and manner of adult-use retail dispensaries and on-site consumption licenses provided that the local law and regulations do not make the operation of the license unreasonably impracticable as determined by the Cannabis Control Board. For example, cities, towns, and villages are permitted to pass laws and regulations pertaining to local zoning and the location of licensees, hours of operations and adherence to local building codes. Municipalities may not issue local licenses to cannabis licensees. [Emphasis added.]
[See the NYS Office of Cannabis Management’s take on what is in the cannabis law relating to local governments here.] Note: In contrast to the December 31, 2021 mandated deadline for opting-out of retail dispensaries and on-site consumption sites, MRTA does not set a date by which time-place-manner regulations must be adopted by local municipalities.
As indicated in the above quote, the regulations adopted by a local municipality must not be “unreasonably impracticable,” and it is the state’s Cannabis Control Board that will determine whether a municipal regulation has breached this undefined and remarkably imprecise standard.
When deciding whether or not to adopt specific local laws or regulations regarding retail dispensaries and/or on-site consumption, municipal officials should be aware that that the cannabis law itself contains – for lack of a better term – a number of time, place, and manner restrictions, including, for example, the following:
– ” No premises shall be licensed to sell cannabis products, unless said premises shall be located in a store, the principal entrance to which shall be from the street level and located on a public thoroughfare in premises which may be occupied, operated or conducted for business, trade or industry.” [MRTA Section 72(5)] Note: MRTA does not contain a similar provision regarding the location of on-site consumption facilities.
– “No cannabis retail licensee shall locate a storefront within five hundred feet of school grounds as such term is defined in the education law (of the State of New York) or within two hundred feet of a house of worship.” [MRTA Section 72(6)]
– “No cannabis retail licensee shall sell alcoholic beverages, nor have or possess a license or permit to sell alcoholic beverages, on the same premises where cannabis products are sold.” [MRTA Section 85(3)] Note: “Cannabis product” means cannabis, concentrated cannabis, and cannabis-infused products for use by a cannabis consumer.” [MRTA Section 3(9)]
– “No applicant shall be granted an adult-use on-site consumption license for any premises within five hundred feet of school grounds as such term is defined in the education law (of the State of New York) or within two hundred feet of a house of worship.” [MRTA Section 77(4)]
– In addition to prohibiting adult-use cannabis advertising and marketing “designed in any way to appeal to children or other minors,” advertising and marketing is prohibited “within or readily observed within 500 feet of the perimeter of a school grounds, playground, child day care providers, public park, or library.” [MRTA Section 86(2)(d) & (e)]
There are a variety of approaches a city, village, or town might consider in order to regulate adult-use cannabis retail dispensaries and on-site consumption sites, including, for example:
(1) limiting the zoning districts in which such activities are allowed (e.g., permitting such activities “by right” only in specified commercial and/or industrial districts);
(2) prohibiting either or both activities within specified distances from residential districts, existing residences, schools, playgrounds, parks, day care facilities, houses of worship, etc.; and/or
(3) requiring all retail dispensary or on-site consumption licensees to obtain a “special use permit” from the designated municipal body, clearly identifying specific criteria that must be met regarding each activity to ensure that the activity is not detrimental to nearby properties or the zoning district in which it would be located.
In drafting and adopting local laws or regulations pertaining to adult-use activities, it is important to remember that MRTA expressly provides the Cannabis Control Board with the power to determine whether or not local enactments “make the operation of such licensed retail dispensaries and/or on-site consumption sites unreasonably impracticable.” [MRTA Section 131(2)] A municipality’s legislative body must find a balance between regulating time, place, and manner in a reasonable fashion, and trespassing upon the CCB’s sole authority to determine whether or not a potential licensee has met the statutory criteria for issuance of a particular license.
C. Notification to municipalities.
MRTA contains a provision requiring a potential applicant to alert a local municipality of its intention to seek a license for a premise located within its jurisdiction. [MRTA Section 76] There is, however, an ambiguity in the cannabis law. The title of the section reads, “Notification to municipalities of adult-use retail dispensary or on-site consumption license.” However, the text (which is not well written) refers to “filing an application for licensure as an adult-use dispensary or registered organization [pertaining to medical cannabis], adult-use cultivator processor distributor retail dispensary or an on-site consumption licensee.” [Note: New York’s appellate courts have consistently held that it is the language of the text, not the title or subtitle, that controls how a statutory provision is to be interpreted.]
This is what the Office of Cannabis Management currently says about the notification provision:
At least 30 days prior to applying for an adult-use retail dispensary or on-site consumption license, an applicant must notify the municipality of the applicant’s intent to apply for such license. The notification must be made to the clerk of the village, town, or city, or if in the city of New York, the community board in which the proposed premise is located. When the municipality expresses an opinion for or against the granting of the license, the opinion shall be deemed part of the record and used by the OCM to determine whether to grant or deny the application. The Cannabis Control Board must then respond in writing to the city, town, village, or community board, with an explanation of how such opinion was considered in the granting or denial of an application.
Given the pervasiveness of MRTA’s preemption of local authority (discussed next), and the potential adverse impacts large adult-use cannabis cultivation and processing facilities may have on the environment, on utilization of energy, and on social and economic equity goals, it is critical that Section 76’s notification provision be liberally construed to include all adult-use cannabis activities. [See the discussion in my April 6, 2021 post regarding a 1.3 million square-foot cannabis cultivation and processing facility proposed for location at the southern end of Buffalo’s Outer Harbor.]
Local Municipalities and Cultivator, Processing, & Distributor Licenses
MRTA prohibits cities, towns, and villages from opting out of adult-use cannabis licenses for cultivation, processing, and distribution. Other than the limited exceptions relating to retail dispensaries and on-site consumption sites, all municipalities – including counties – are preempted by New York’s cannabis law from adopting any rule, ordinance, regulation, or prohibition pertaining to the operation or licensing of adult-use cannabis. [MRTA Section 131]
Whether or not the Office of Cannabis Management and/or the Cannabis Control Board expressly acknowledge that MRTA’s “Notification to municipalities” requirement applies to cultivation, processing, and distribution licenses, it would make sense for concerned municipalities to express their concerns in writing to the OCM and CCB. Such submissions should emphasize the ways in which the proposed license would fail to promote public convenience and advantage, public health and safety, and the public interest of the community, or would conflict with or adversely impact the various criteria and interests embodied in MRTA. The following is a partial list of MRTA’s selection criteria and statutory interests:
– preventing access to cannabis by those under the age of twenty-one years [MRTA Section 13(3)(a)];
– the promotion of social and economic equity, by prioritizing consideration of applications by applicants who are from communities disproportionately impacted by the enforcement of cannabis prohibition or who qualify as a minority or women-owned businesses, distressed farmers, or service-disabled veterans. [MRTA Sections 87(1), 10(2)];
– the avoidance of market dominance [MRTA Section 10(2)];
– furthering the public interest by limiting the number, classes, and character of licenses in proximity to each other, and within a particular municipality or geographic area [MRTA Section 64(1)(g)(ii)];
– the effect of granting a license on pedestrian and vehicular traffic and parking in proximity to the location [MRTA Section 64(1)(g)(iv)];
– the effect of granting a license on existing noise levels at the location [MRTA Section 64(1)(g)(v)];
– the goals of increasing climate resiliency, and minimizing or eliminating adverse environmental impacts, including water usage, energy usage, carbon emissions, waste, pollutants, harmful chemicals, and single-use plastics [MRTA Section 64(1)(g)(vi)];
– for adult-use cultivator or processing licenses, the environmental and energy impact of granting a license, including compliance with energy standards [MRTA Section 64(1)(k);
– for adult-use on-site consumption licenses, the absence of a demonstrated need for spaces to consume cannabis. [MRTA Section 77(5)(d)]
Limitations on adult use of cannabis
Although a bit off-topic, this posting will end with a brief summary of how smoking and vaping of adult-use cannabis is still restricted in New York State.
MRTA amends other New York State laws to make it lawful to smoke or vape cannabis in private homes, private residences, private automobiles, and in a hotel or motel room rented to one or more guests. [See amended Public Health Law, Section 1399-q.] Nonetheless, officials – and New York State’s residents – should be aware of the ways in which the enactment of NY’s cannabis law does not make the smoking or vaping of cannabis automatically lawful everywhere within the Empire State:
(1) As expressed at Section 2 of MRTA (“Legislative findings and intent”), “Nothing in this act is intended to limit the authority of any district, government agency or office or employer to enact and enforce policies pertaining to cannabis in the workplace; to allow driving under the influence of cannabis; to allow individuals to engage in conduct that endangers others; to allow smoking cannabis in any location where smoking tobacco is prohibited; or to engage in any conduct that violates federal law or to exempt anyone from any requirement of federal law or pose any obstacle to the federal enforcement of federal law.” [MRTA Section 2]
(2) The MRTA legislation amends New York’s Indoor Clean Air Act [Public Health Law, Article 13-E] to add cannabis, and, by doing so, prohibits the smoking or vaping of adult-use cannabis anywhere smoking and vaping of tobacco is prohibited. That includes, for example, all schools and school grounds, colleges and universities, places of employment, bars, restaurants (with narrow exceptions), public transportation, hospitals, public and private offices, all indoor arenas, and zoos. [For additional information, see Guide to the NYS Clean Indoor Air Act ]
With All Due Respect,