We are currently living through undeniably challenging times. As individuals and businesses across the State and country begin to stay at home for an indefinite period, a wave of anxiety is setting in. Besides the very real dangers of contracting the novel coronavirus, there are unclear economic ramifications. How long will businesses be shuttered? How many will never open again? Where is my next paycheck going to come from? Will there be a job for me on the other side of this?
Here in New York, Governor Cuomo has shown exceptional leadership and is mobilizing the capabilities of the State to fight an invisible war. This crisis is occurring right as the 2021 budget would normally be under negotiation ahead of the constitutionally mandated April 1st deadline. Included in the Governor’s budget proposal is the Cannabis Regulation & Tax Act (CRTA). Manifested after years of consideration, this would put into place a regulatory structure legalizing the commerce of adult-use cannabis in a way that would spur a craft marketplace, afford opportunities to communities significantly affected by the war on drugs, and incentivize small business growth. Unfortunately, reports are out that “controversial” measures such as the CRTA will not be included in the final budget. This would be a huge mistake.
As we have seen with the explosion of the craft beverage industry, the economic benefit that hundreds of small businesses bring to the State can be enormous. Between the wine and beer industry, over 80,000 jobs are supported with an economic impact of over $19 billion. The creation of an adult-use cannabis industry, according to a study by the Rockafeller Institute, could create 30,000 jobs and generate a total economic impact of $4.1 billion. When you include the tourism impact that on-premise operations could have combined with a rise in manufactured hemp products, the economic impact could easily double. As with the craft beverage industry, much of the wealth created would be in small businesses and spread throughout communities across the State. Legalizing commerce of adult-use cannabis through the CRTA has an opportunity to create 1,000 millionaires instead of 1 billionaire.
The impact of this war on COVID-19 will extend beyond businesses to city, county, and state tax funds. Critical services and infrastructure projects may be put on hold next year due to a lack of funding. Comptroller Tom DiNapoli recently estimated the current health crisis could lead to a decrease in tax revenues of up to $7 billion. Cannabis legalization could, at the very least, dampen the impact with an estimated $1.3 billion in tax revenue for the State and municipalities once the marketplace is up and running.
Without a doubt, efforts and funding to fight this invisible war should remain a priority. But, lawmakers can and should include adult-use cannabis legalization in the budget, something New Yorkers overwhelmingly support. When this crisis is over, the significant economic impact will be realized. New Yorkers have an amazing resolve and ingenuity; we will rebound. As we do, the enormous opportunities that will bring jobs, new ventures, investment, and tax revenue can be there with a newly created cannabis industry. Right now, more than ever, we need our leaders to afford these opportunities. Right now, we need cannabis legalization.
-Kaelan Castetter, CEO