The Implications Behind New York’s Decriminalization of Marijuana

By: Steve Masur and Armando E. Martinez

On June 19, 2019, the New York State Legislature in Albany rejected a cannabis legalization bill, which had enjoyed wide-ranging popular support, leaving many to wonder why. New York is the second state in the tri-state area to reject the legalization of marijuana in the last few months, as New Jersey, its neighbor, narrowly rejected a legalization bill in March. When asked to comment on the results, lawmakers stated that the opposition in legalizing marijuana in New York mainly stemmed from uncertainty as to how to allocate tax revenue. The New York State Legislature, however, made advances towards legalization by passing a marijuana decriminalization bill.

Under New York’s marijuana decriminalization bill, possession of up two ounces of marijuana will now carry a fine between $50 and $200, with the specter of jail time significantly reduced. Further, the bill will establish a process to expunge the marijuana-related convictions for those who have been previously convicted of possession. In effect, the bill will not only limit the amount of marijuana-related convictions we see in the future, but it will also provide 600,000 ex-convicts with a thinner criminal record. This means that ex-convicts who were previously precluded from entering the workforce will now be able to enter it, which could drive economic and entrepreneurial growth in New York.

The legal distinction between decriminalization and legalization is thin, but it merits scrutiny. Decriminalization means that a fine is attached to the possession of marijuana in small amounts, yet jail time is not. Depending on the state, further, possession of a larger amount of marijuana, as well as sales or trafficking of the drug, could result in harsher sentences, such as jail time. By contrast, fines and jail time are completely eliminated under legalization, which may also allow sales. Decriminalization is a step towards legalization, and although this was the last legislative session for the first half of 2019, it most certainly will not be the last time lawmakers revisit this topic in Albany. This is because the economic, social, and political implications of legalizing marijuana could likely have a marked impact on the American macroeconomy.

In 2018, the legal cannabis industry generated approximately $10 billion in revenue. Cannabis-related financial services have surged due to many firms taking advantage of the legalized markets to create and scale cannabis supply chain operations. If cannabis were legalized in New York, jobs would be created on both wholesale and retail front, which would effectively allow the state to enjoy a higher tax revenue. The push for legalization probably failed due to questions about how to allocate this revenue.

When Illinois Gov. J.B. Pritzker signed Illinois’ legalization bill, he stated that legalization would provide opportunities to those in communities who have been direly in need of a second chance. By decriminalizing marijuana in New York, the legislature is close to fully afford the same benefit to its constituents, as this bill is focused on creating on opportunities, not limiting them.  However, decriminalization is still only a half measure. In addition to broadening the tax base, full legalization would provide New York with a new industry and a new basis for entrepreneurial growth, which could make it a leader in terms of growth, especially upstate, where it is needed most.