New York Governor Signs Bill Recognizing Cannabis as a Crop in Agriculture Law

New York Governor Kathy Hochul has officially signed legislation that designates cannabis as an agricultural product under the state’s agricultural law. This landmark decision provides farmers growing cannabis with the same legal protections as those cultivating traditional crops and marks a significant shift in the treatment of cannabis within New York’s regulatory framework.

A Boost for Cannabis Farmers

The new law allows cannabis to be formally classified as a crop, offering protections that were previously out of reach for growers. Farmers will now have access to agricultural assessments, which could ease tax burdens and provide a financial safety net.

Before this law was enacted, farmers who transitioned land from cultivating recognized agricultural products to cannabis risked losing their agricultural tax assessment. This could lead to hefty property tax hikes or even penalties for converting land use. The new legislation rectifies this issue, ensuring that cannabis farmers are not penalized for their choice of crop.

In the bill’s text, lawmakers emphasized the importance of fairness in the state’s burgeoning cannabis program:

“For the state to reach its goal of having an adult cannabis program that achieves its social equity goals, which includes distressed farmers, we must not penalize farmers who choose to grow cannabis.”

Social Equity at the Core

This decision is seen as a key step toward supporting social equity in the cannabis industry. By offering cannabis farmers the same protections as other agricultural producers, the state aims to create a level playing field for farmers from diverse backgrounds, including those from historically disadvantaged communities.

The change is particularly significant as New York continues to position itself as a leader in the legal cannabis market. The state’s cannabis program includes provisions aimed at helping small and distressed farmers gain a foothold in the industry, and this legislation reinforces those efforts.

Governor Hochul’s Mixed Approach

While the new law marks a win for cannabis farmers, Governor Hochul vetoed another piece of cannabis-related legislation on the same day. The vetoed bill would have altered the tax schedule for cannabis distributors, allowing them to pay the state’s 9% cannabis excise tax annually rather than quarterly.

This proposed change would have aligned the cannabis tax schedule with that of the alcohol industry. However, the governor chose to reject the measure without providing a detailed explanation, leaving industry stakeholders speculating on the rationale behind her decision.

Implications for the Cannabis Industry

The governor’s actions highlight the balancing act between fostering a fair regulatory environment and maintaining tight control over the state’s young cannabis market. While the inclusion of cannabis as a crop offers significant relief for farmers, the veto of the tax bill suggests the state is not yet ready to make broader adjustments to its cannabis tax framework.

Farmers and industry advocates alike are now watching closely to see how these developments impact the rollout of the state’s adult-use cannabis program, which aims to prioritize equity and sustainability.

Key Takeaways for Farmers

Here’s what cannabis farmers in New York need to know about the new law:

• Cannabis as a Recognized Crop: Cannabis is now officially part of the state’s agricultural products, granting it the same protections as other crops under New York law.
• Agricultural Assessments: Farmers growing cannabis can apply for agricultural tax assessments, reducing the risk of financial penalties for land conversion.
• Policy Intent: The change aligns with New York’s broader goals of promoting equity in its cannabis industry and supporting small-scale farmers.

With these new protections in place, New York cannabis farmers have a stronger foundation to build their operations while contributing to the growth of the state’s legal cannabis market.