The Direction of Change in the Empire State

Change

In 2013 New York State Senator Liz Krueger introduced a bill that would have legalized recreational use of marijuana.

Here is the link. (Note that, consistent with long-standing practice, the word is spelled “marihuana” in New York legislation, actual and proposed.)

Krueger, a Democrat representing Manhattan in Albany, plans to re-introduce that act, apparently with some minor changes, in January 2015. The text of the 2015 version is not yet available. Her staff said that it was still being finalized.

When it was originally introduced the idea of such a bill was something of a Hail Mary-Jane pass. The best that more practical reformers in New York thought they could do at that time was to press for medical marijuana legalization.

But New York has moved on. After all, that medical marijuana bill did become law, and in other respects too (discussed below) the political context has shifted a good deal since 2013. So people are taking this incarnation of the Krueger bill more seriously.

 

Marijuana and Alcohol

Krueger’s proposal is, in essence, that marijuana should be treated like alcohol. Indeed, the regulation will involve the same body: the Liquor Authority, which will be empowered to grant licenses for production, transport, and retail (off-premises) sale of marijuana.

Anyone over 21 will be able to purchase small amounts of it from the state-regulated stores, although the law will still seek to avoid its possession by anyone under 18.

On a town-by-town basis, communities can opt out of retail sale through a referendum process (similar to the process that now exists for alcohol sales).

Both the state and localities will get a piece of the revenue action. Under the bill, the state will impose an excise tax, and will authorize towns to charge a sales tax. A portion of the state’s tax revenue will go to re-entry programs, substance abuse programs, and job training programs for low-income, high unemployment communities.

MJINews has calculated estimated annual black market sales in New York at $861 million, and the legal market based on period/trend as above $3.6 billion. The potential for tax revenue is of course considerable and Krueger is treating this as a major selling point for her bill. Hence its title, the Marihuana Regulation and Taxation Act.

 

Marijuana and Tobacco

There are at least a couple of points where some reformers may not believe Krueger’s bill goes far enough. One, an issue just now coming into public view, is the relevance of marijuana use to employment. On that, this bill takes an employer-friendly approach. “Nothing in this act,” the existing draft says, “is intended to limit the authority of employers to enact and enforce policies pertaining to marihuana in the workplace.”

On another point, the bill says that it is not meant to “allow smoking marihuana in any location where smoking tobacco is prohibited,” an equation of a type that has already caused some spin-off disputes in the medical context. The Southern Maine Medical Center, in Biddeford Maine, for example, has prohibited the smoking of medical marijuana in hospital grounds, a result that seems counter-intuitive given the state’s recognition of the medicinal value of this substance, and the hospital’s presumed interest in … well, medicinal values. Nonetheless, that counter-intuitive policy is justified by a desire to treat smoking of the one sort as on a par with smoking of the other, and one may discern the same “logic” within Krueger’s bill.

 

Marijuana and Politics

Whatever its merits, this bill may become a beneficiary of the rather byzantine ways of the New York legislature.

Stepping back a couple of years: the elections of 2012 left the state Senate with a nominal majority of Democrats, 32 seats out of 63. But a 5-person caucus of “independent Democrats” led by Jeff Klein split from its party’s regulars and entered into an alliance with the Republicans.

Over the course of the subsequent two years, cracks developed in the Republican Party that paralleled those in the Democratic Party. By May 2014, for example, five Republicans had professed themselves willing to support medical marijuana. Thus, even though in the following month the Democratic Party took steps toward healing its own internal split, this didn’t derail the Compassionate Care Act.

In the November elections, the Democrats lost ground, and it is the Republicans who will begin the new session in 2015 with at least a nominal majority. But with the healing of the Democratic Party split, and the movement of some Republicans their way in this field, Krueger has said that she has new hopes that a majority can be brought around to her more sweeping legislative proposal.

Christopher C. Faille, a Jamesian pragmatist, was one of the first reporters taking the hedge fund industry as a full-time beat, at the turn of the millennium, with HedgeWorld. His latest book, Gambling with Borrowed Chips, treats of common misunderstandings of the crisis of 2007-08.

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