New York Legislature legalizes recreational marijuana for adults

• The New York Legislature passed a bill to legalize marijuana for adults on Tuesday.
• It allows for for home growing, dispensary sales, and "consumption lounges."
• Gov. Cuomo said he would sign the bill, but not when.

The New York State Senate and Assembly passed a bill legalizing marijuana for those over 21 years of age on Tuesday, bringing the Empire State into the recreational cannabis market along with several of its neighbors.

The New York Senate passed the bill to legalize recreational marijuana earlier Tuesday in a 40-23 vote. Late into the night, the Assembly passed adult-use cannabis in a 100-49. The legislation is now en route to Governor Andrew Cuomo's desk. He has said he would sign the bill and reiterated his support again on Tuesday after the bill passed both chambers of New York's state legislature.

With the April 1 budget deadline looming, lawmakers were swift to coalesce around the final language that was only released on Saturday.

Medical cannabis is already legal in a limited capacity in New York, but the recreational provisions in this bill most likely won't take effect until 2022. Norman Birenbaum told Insider in February that he expects sales to begin around 12-18 months after the bill passes, in accordance with most other states that have made the transition from medical to recreational in recent years.

Cannabis companies have been pouring over the details of the bill, with licenses up for grabs in what could become a $5 billion market by 2025, according to analysts from Cantor Fitzgerald and Stifel.

Under the framework set forward by lawmakers, adults over the age of 21 in New York would be able to legally purchase and possess cannabis.

They'll also be allowed to grow up to six cannabis plants at home, with a maximum of three mature and three immature plants per adult, and partake in marijuana on-site at various "consumption lounges."

The legislation expands New York's existing medical program. The list of qualifying medical conditions for medical cannabis could be expanded, along with product options. Flower products, which are not allowed under New York's medical program, may be permitted under the expansions.

The 10 cannabis companies that currently operate in New York's medical market are expected to have a big leg up over new entrants into the space because they already have dispensaries and cultivation in place in the state. However, the bill emphasizes social equity and outlines a goal of 50% of licenses going to social equity applicants, or individuals from communities disproportionately impacted by the war on drugs.

The bill also earmarks 40% of tax revenue from cannabis sales for a new fund to support economic and social-equity programs. Another 40% would go to the state education fund, and the remaining 20% would go to drug-education program - a structure that marks a huge win for Democrats who had pushed for social equity to be a key component of legalization.

The tax revenues that would come in from a legal market were a point of debate between Gov. Andrew Cuomo and lawmakers the past two times New York tried - and failed - to legalize cannabis. But with the myriad scandals facing Gov. Cuomo, lawmakers were able to wield more control than they otherwise would have during budget season.

In a statement released late Tuesday night, Cuomo said he will sign the bill, but did not specify when.

Details such as how many dispensaries will be allowed in total in New York still need to be worked out. The bill would create an Office of Cannabis Management and a Cannabis Control Board to regulate the industry and fine-tune these details.

Individuals who want to take part in New York's legal market would have the choice of either owning dispensaries or becoming a cultivator under the bill. The exceptions to this are existing medical operators wishing to transition to adult-use and "microbusinesses," or smaller social equity operators who can control multiple parts of their own supply chain. Incumbent medical operators will be allowed to keep their cultivation, distribution, and retail capabilities even if they choose to take part in the recreational market.

New retail operators would be allowed a maximum of three dispensaries. There is not yet a cap on the total number of licenses allowed in New York. This number of licenses may be left up to the Cannabis Control Board, the bill said.