Governor Cuomo to sign New York state medical marijuana bill into law

Program would tightly control the use and distribution of the drug

At 1 PM on July 7, New York becomes the 23rd state to legalize medicinal marijuana, with Governor Andrew Cuomo signing a bill into law that will allow patients to use the drug to help with a variety of ailments. The bill, which passed in June, is narrower in scope than other similar arrangements that have passed throughout the United States. It aims to provide options for patients with real need for therapy while maintaining tight protocols for the sale and use of the drug.

"This legislation strikes the right balance," Governor Cuomo said. "Medical marijuana has the capacity to do a lot of good for a lot of people who are in pain and suffering, and are in desperate need of a treatment that will provide some relief. At the same time, medical marijuana is a difficult issue because there are risks to public health and safety that have to be averted. I believe this bill is the right balance, and I commend the members of the Legislature who worked so hard on this measure."

This was an important stipulation for the New York government, which has said it will actively enforce certification to ensure only those with true need have access to medical marijuana.

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Marijuana would not be available in a smokeable form under the bill, being sold rather as an edible or in concentrated oil form intended to be vaporized with specialized equipment.

Once the bill has been signed, the New York Department of Health will have 18 months to implement supporting infrastructure for the certification of growers, distributers and patients. The bill will also automatically end in seven years, allowing the reigning administration to reevaluate it at that time.

NEXT PAGE: How Thawing State Prohibition Laws Pose a Compliance Challenge

Marijuana has been proven effective in the positive treatment of many of the diseases named in the New York bill, and while the science supports its use as a therapeutic option, legal challenges remain for states seeking to lighten its prohibition. Chief among those challenges is the fact that the plant remains banned at a federal level, meaning that at any time government officials could theoretically bust patients and distributers.

Compliance issues for corporations in the health, and financial industries are also a key consideration as prohibition standards throughout the states begin to take shape. Since the money generated from the sale of marijuana, is still technically “drug money,” by the standards of the Fed, banking, investing and paying taxes with it can be an extremely complicated process.

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For example under the proposed New York bill, “The legislation puts in place a 7 percent excise tax on every sale of medical marijuana by a registered organization to a certified patient or designated caregiver. Proceeds from the excise tax would be allocated as follows: 22.5 percent to the county in New York state in which the medical marijuana was manufactured; 22.5 percent to the county in New York state in which the medical marijuana was dispensed; 5 percent to the State Office of Alcoholism and Substance Abuse Services to be used for additional drug abuse prevention, counseling and treatment services; and 5 percent to the Division of Criminal Justice Services to support law enforcement measures related to this legislation.”

While those taxes certainly have a noble cause, the source of the money, and where each dollar invested in those public programs end up, highlights the questions that remain between state and national laws. How, for example, would a counselor hired using money obtained from taxation of medical marijuana be treated under federal standards?

In response to increasingly loose state laws associated with the marijuana, Attorney General Eric Holder recently said that the federal government will not seek to shut down financial institutions that handle marijuana money, so long as they adhere to a list of considerations before accepting deposits. This stance could dramatically shift depending on the attitude adopted by the presiding federal administration.

Still with disparate laws and conflicting regulations, this is a space that even those not directly involved with the cultivation and sale of marijuana will want to watch.

 

Associate Editor

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Chris DiMarco

Chris DiMarco, Associate Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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