Extras on Excise: No Lighting Up, and Other High Regulations Under New York’s Smokeless Medical Marijuana Law

After years of hard work and vigorous debate, advocates of medical marijuana can finally celebrate a victory in New York. Or did all the hard work go up in smoke? 

New York Gov. Andrew Cuomo (D) signed the Compassionate Care Act into law Monday, making New York the 23rd state to establish a medical marijuana program and legalize the use of marijuana for medical purposes. 

New York is celebrating the passage of the Compassionate Care Act as a victory because it “strikes the right balance between our desire to give those suffering from serious disease access to treatment, and our obligation to guard against threats to public health and safety,” said Cuomo in a press release about the signing of the bill. “This new law takes an important step toward bringing relief to patients living with extraordinary pain and illness.” 

But some people are saying that New York’s law is too restrictive. 

The price of medical marijuana in New York will be set by the department of health and the acting health commissioner, but whatever the price, New York is levying a 7 percent excise tax on gross receipts from the sale of medical marijuana. Most states do not levy such a high excise tax on medical marijuana, if any excise tax is levied at all. 

New York’s law goes even further by limiting the forms of marijuana that may be offered and the manner in which they may be taken. The department of health will issue guidance about the forms of marijuana that are approved for use, likely some type of edible form because of the smoking prohibition. But “under no circumstances will smoking be allowed,” the governor reiterated in the press release. The law provides that medical marijuana is unlawful if it is smoked, consumed, vaporized or grown in a public place. 

However, New York is not the only state to ban smoking of medical marijuana. Minnesota also prohibited the smoking of medical marijuana when it enacted its medical marijuana legislation earlier this year. 

New York, among other states, also limits the use of medical marijuana for the following “severe debilitating or life-threatening conditions:” 

  • cancer,
  • HIV or AIDS (positive status),
  • Lou Gehrig’s disease,
  • Parkinson's disease,
  • multiple sclerosis,
  • damage to the nervous tissue of the spinal cord with objective neurological indication or intractable spasticity,
  • epilepsy,
  • inflammatory bowel disease,
  • neuropathies, and
  • Huntington’s disease.

But some states have such limited acceptable uses that those states are not even counted among states that have legalized medical marijuana. For example, North Carolina enacted legislation last week allowing the limited use of medical marijuana in cannibidiol oil form to treat epilepsy and seizures, joining Alabama, Florida, Iowa, Kentucky, Mississippi, South Carolina, Tennessee, Utah and Wisconsin, which have all passed similar legislation this year. But they are not counted among the states that have enacted a comprehensive medical marijuana program. 

On a higher note, recreational marijuana sales in the state of Washington began Tuesday, officially making the state the second after Colorado to offer non-medical marijuana sales. 

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Do you think New York’s medical marijuana program places too many restrictions on the use of medical marijuana while taxing it at too high a rate?

For more information about this and other state tax issues, sign up for a free trial of the Bloomberg BNA Premier State Tax Library.  

Follow us on Twitter: @BBNAtax