New York to Legalize Medical Marijuana

New York

On June 20, 2014, the New York legislature voted to legalize medical marijuana. When signed by Gov. Andrew M. Cuomo, the Compassionate Care Act will be among the most restrictive in the nation. At the center is the New York State Department of Health, which will develop regulations and certify doctors, patients and dispensaries. It will also determine medical protocols, including appropriate dosages.

The program is not expected to roll out until early 2016 but may be delayed. The governor, acting on information from the State Police or the Department of Health that the drug is being abused, may end the program at any time. The law will sunset after seven years, and must be re-authorized by the legislature if cannabis is to remain available as a treatment option.


What the Law Provides

  • Doctors and other health professionals must be certified by the Department of Health to administer marijuana.
  • Patients must also register with that department and receive an identification card that will define dosages. They may not possess more than a 30-day supply of the drug.
  • At present, the drug may be prescribed for only 10 medical conditions: AIDS; Amyotrophic Lateral Sclerosis (Lou Gehrig’s Disease); cancer; damage to the nervous tissue of the spinal cord with objective neurological indication on intractable spasticity; epilepsy; HIV; Huntington’s Disease; inflammatory bowel disease; multiple sclerosis; neuropathies; and Parkinson’s Disease.
  • The law makes it a felony for a physician to falsely certify a patient’s eligibility or for a patient to use false certification. It will be a misdemeanor for a patient to sell prescribed drugs.
  • The drug may not be smoked, but the law will allow vaporization and oils.
  • Health insurers need not provide coverage for medical marijuana.
  • The Commissioner of Health will certify five registered organizations, each of which may operate up to four dispensaries throughout the state. These registrations must be renewed every two years. All products must be tested by an independent laboratory.
  • Plants must be grown in New York State in fully secure indoor facilities, and subject to tight seed-to-sale controls.
  • The state will impose a 7 percent excise tax on medical marijuana sales. The counties in which the medical marijuana is manufactured and dispensed will each get 22.5 percent of the tax revenues.


Law’s Meaning for Doctors and Patients

This part is puzzling. It is simply not clear how much scientific evidence was considered in the decision to ban smoking. It is also not clear how the Department of Health will make decisions about dosages or which medical conditions may be treated with cannabis. Many were surprised that glaucoma did not make the list. It is not even clear that these decisions are appropriate for a governmental agency.

Without insurance coverage, medical marijuana may not be an option for some patients. Some may delay or forego treatment. Of course, there is dissent even within the medical community about the efficacy of medical marijuana, but the prospect that medical decisions may be driven by politics as much as science is certainly bothersome.


What It Means for Business

The regulations may be a year and a half away. Several things emerge quickly, though. Without laboring the obvious, there is no legislative appetite for legalizing recreational use in New York. At first glance, the law bears some resemblance to New Jersey’s Compassionate Care Act. New Jersey’s medical marijuana industry seems to have struggled for a variety of reasons. Some will argue that the regulatory scheme is too tight, effectively strangling a nascent industry.

Those five business licenses will be valuable, but the first entrants to the market also bear the risk that Governor Cuomo or a future governor may simply shut the industry down. Tight product control requirements seem to favor vertically integrated businesses. The law may be a boon for manufacturers of vaporizers and independent testing labs. After the first euphoria, many advocates are settling into a more cautious, wait-and-see stance.

Anne Wallace is a New York lawyer who writes extensively on legal and business issues. She also teaches law and business writing at the college and professional level. Anne graduated from Fordham Law School and Wellesley College.

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