Cannabis Legalization Would Have Major Effects On Local Businesses

The article ‘Cannabis Legalization would have Major Effects on Local Businesses’ was written by Rochester Business Journal. It discusses the ongoing efforts to legalize cannabis in New York. This has been a process in the works for many years, but hasn’t passed through legislation yet. The purpose of this article is to demonstrate how this legalization would affect the state as a whole: including local businesses, the economy, and taxing. Rochester Business Journal warns for proper analysis of this bill because they fear if it is not implemented correctly then it could destroy the economy the state is hoping to create (Rochester Business Journal, 2020).

The author starts by recapping the past few years and goes on to foreshadow theories as to what future New York has with legalized recreational use of marijuana. There are many examples used from past experiences to formulate hypotheses as to what could come from legalizing marijuana. The article is an explanation about the positive and negative effects that we might see if these laws are passed.

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It was very clear and straightforward while offering advice and past legislation to create a better understanding of what New York state could potentially risk or gain in the process of legalizing marijuana.

With marijuana gaining popularity, it has become a major topic of conversation throughout our country. We have seen it become a great source of income for many states like Colorado and California. It has helped their economies expand and businesses flourish in many ways that they otherwise wouldn’t have been able to achieve.

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In January 2019, Gov. Andrew Cuomo of New York announced that he wanted to include cannabis legalization in the 2019 budget (Rochester Business Journal, 2020). The legislature had a cannabis bill sitting in the senate finance committee called the “Marijuana Regulation and Taxation Act” (Rochester Business Journal, 2020). The controversy over these bills was whether tax revenue that was generated from cannabis sales should be spent by the state. Secondly, whether counties with over 100,000 residents are allowed to opt out of sales, or if it should be left to local municipalities to decide if they wanted to opt out (Rochester Business Journal, 2020). Due to these differing opinions the bill did not pass and marijuana continues to be illegal in the state.

Following this, New York passed two cannabis related bills: the first was regarding decriminalizing cannabis and the second was a hemp extract bill (Rochester Business Journal, 2020). The prior bill did not legalize marijuana, but simply made the personal possession a violation rather than a criminal charge (Rochester Business Journal, 2020). It created an under two ounces policy where the person could not be charged criminally if they had less than two ounces on them. (Rochester Business Journal, 2020). The second bill was passed in relation to regulation of hemp and CBD sales. Prior to this bill being passed, the regulatory process regarding hemp was very unclear and confusing to the people involved in the industry. There were multiple instances where companies violated the law, yet were met with little regulatory enforcement. Because of the importance of clear and straightforward laws, they revised and released a new bill promising regulation while protecting hemp and CBD businesses (Rochester Business Journal, 2020). This bill allowed for more clarity on what certain procedures these companies needed to follow and what types of activity was allowed and what was not. For example, not using it as an ingredient in foods because it went against the Department of Agriculture and Markets (Rochester Business Journal, 2020).

It is important to note that if marijuana were to be legalized regulatory laws would need to be as specific and precise as those involving CBD and hemp. We should expect them to have the same types of protections as we see in the latest bill passed (Rochester Business Journal, 2020). Without regulation protecting the manufacture and production of marijuana there could be many hazardous side effects. Since marijiuana is federally illegal, this could potentially help local businesses. New York would ultimately be forced to grow, process, and sell within the state alone (Rochester Business Journal, 2020). There would be no need for out of state companies help which would allow these local businesses to make and keep all the profits for themselves. This would also create a wide variety of job opportunities like agricultural machinery, farming production, management, packaging, accounting, sales, marketing, etc. (Rochester Business Journal, 2020). It is estimated by the Rockefeller Institute of Government that the cannabis market “could generate a total economic output of $4.1 billion and a total employment of 30,700” (Rochester Business Journal, 2020).

A crucial downfall that New York would need to consider is regarding their high taxing. We have seen similar issues with California because they also have extremely high tax rates. In New York, there is potential for tax rates to be in excess of 90% (Rochester Business Journal, 2020). This is because New York has one of the highest state taxes in the United States, including an 18% state tax and a 4% local tax (Rochester Business Journal, 2020). This would affect many of the local businesses that would not be able to afford the tax rates and give the major companies a head start. Because of this it might do more damage to the economy then help. This is something that the state would need to prepare for and consider when legalizing.

If there is a future for New York to pass and legalize marijuana then there are many aspects to discuss. The situation has pros and cons and it is unclear what the future could hold. There is a potential for the economy to flourish, creating many jobs and opportunities for its citizens. Due to the reliance on in-state work, it would allow local businesses to prosper and create an entirely new market that is in high demand right now. There are opportunities for multiple ways to sell and distribute marijuana recreationally including coffee shops, restaurants, dispensaries, like we have seen in Colorado. This can create new work and even attract many tourists – which is another way to create major profit.

In contrast though, we can see that the taxing situation could prevent this from becoming a productive, new market. Having an excess tax rate would cause many of these industries to go out of business especially within the first few years of starting up. Many people would lose a lot of money, jobs, and resources. The only chance for prosperity would be if New York state acquired proper taxing and regulating of these companies (Rochester Business Journal, 2020). This would need to be a well thought out plan, accounting for all the potential side effects, so that they are prepared and equipped to create this new market. Companies who hope to see this bill passed would need to make it a point to speak with their senators and educate them on the importance of taxation and regulation (Rochester Business Journal, 2020). In doing so, they can give a new perspective to those in office who are unsure if passing this law is a good idea or not. New York state will need to decide if taking this potential risk of legalizing marijuana would be worth it in the end for their citizens and for their economy.

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Cannabis Legalization Would Have Major Effects On Local Businesses. (2022, May 23). Retrieved from https://studymoose.com/cannabis-legalization-would-have-major-effects-on-local-businesses-essay

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