Marijuana proposal pitched in New York would generate $300M in annual tax revenue: Cuomo

New York Gov. Andrew Cuomo released details Tuesday of his plan to legalize recreational marijuana in the state, including a proposed taxing scheme he expects to generate roughly $300 million in annual revenue.

“New York has to establish a regulated adult-use cannabis program,” the Democratic governor said while delivering his State of the State address in Albany. “And we have to do it in a way that creates an economic opportunity for poor communities and people who paid the price, and not the rich corporations who are going to come in to make a buck.”

Slated to be included in the governor’s annual budget request, Mr. Cuomo said his proposal, The Cannabis Regulation and Taxation Act, would legalize the recreational use of marijuana for adults 21 and over, pave the way for retail pot sales and automatically seal certain cannabis-related criminal records.

“It generates approximately $300 million in tax revenue and creates good union jobs that we need,” Mr. Cuomo said during his speech.

Recreational marijuana would be subject to at least three separate taxes in New York under the governor’s proposal, including a 20 percent state tax and a 2 percent local tax on sales from wholesales to retailers, plus a per-gram tax paid by growers. Revenue raised would be allocated toward state initiatives including a traffic safety committee, small business loans and public health programs, among others.

Ten states have legalized recreational marijuana, including seven that permit the plant to be sold at licensed dispensaries: Alaska, California, Colorado, Massachusetts, Nevada, Oregon and Washington state.

Marijuana remains illegal under U.S. law, however, putting state laws across the country in direct conflict with federal prohibition.

Mr. Cuomo convened a working group last year to examine the pros and cons of legalizing marijuana, and its members ultimately concluded that the positive benefits of a regulated marketplace outweighed the negative aspects.