In New York, 769 municipalities have opted out of housing recreational marijuana dispensaries since New York legalized cannabis in 2021, and 884 have opted out of having consumption sites. Counties had nine months to decide whether to opt-out or not. However, the state’s largest and most populous cities—including New York, Buffalo, Yonkers, Rochester, Syracuse, and Albany—have all opted into the legal weed market.
So, what does it mean if your town opted out?
Municipalities had the option to opt-out of consumption sites, dispensaries, or both. Whole counties cannot opt-out of adult-use license types. If your community did not opt-in, it doesn’t mean cannabis is illegal there. A consumer is not banned from purchasing or possessing cannabis products in these areas, and investors can still obtain other types of licenses for services like cultivation or delivery. Communities are also not able to opt-out of possession and the legal use of recreational cannabis by adults 21 years or older, medical cannabis, or cannabinoid hemp license types.
What it does mean is that certain localities will lose out on tax revenue associated with some of the cannabis markets. Under the law, New York will charge a 13% excise tax on marijuana sales, with 9% going to the state and 4% to local governments. The municipalities that opt-out will forfeit their 4% share of the excise tax.
Towns that opted out have the choice to change their mind at any time. According to the law, an “opt-out” only affects the area of the town outside of any village within the town. Consumers are still welcome to travel outside the town to purchase cannabis or visit a consumption site. Consumers can also have their products delivered to them from other towns that have opted in.
Many municipalities and their residents expressed three main concerns. The first is uncertainty. The state has not yet put together a strong set of regulations, providing only a vague idea of what the recreational cannabis market will look like. Because opting in is permanent, the safest bet seems to be waiting until the rules are set. These communities may watch some of the roadblocks and pitfalls of other areas that opted in first and opt-in later with a clearer plan.
The second concern is a fear of encouraging drug use and indirectly allowing kids greater access to marijuana. Research in this area varies widely, which can cause more dissonance. While some studies show that legalization can dry up illegal markets, other studies suggest that legalization results in kids having easier access to the drug and others that are more dangerous. The third and perhaps most prevalent concern is the potential change in the “character” of the town. This could mean increased traffic, more visitors, or a concern about an influx of petty crime or impaired driving.
What about towns that didn’t hold a vote?
Several localities did not select an option at all. This automatically opts them in, and these towns and others that opted in do not have the choice to opt-out at a later date. These areas have allowed the issuance of all adult-use licenses, including licenses for dispensaries and consumption sites. While this does not mean these towns will have either any time soon, the sites do need to be approved by the municipality before they can open. Many towns will base the licenses on business plans, site location, and retail experience. The first hundred (or more) licenses will be held for people who have been convicted of marijuana-related offenses or their relatives.
The Nelson A. Rockefeller Institute of Government is keeping track of the municipality decisions for both dispensary and consumption sites. Communities that opted in are still waiting on licenses to be issued. The latest updates on licenses and new dispensaries can be found here (our page link) and on the Office of Cannabis Management webpage.