Licensed cannabis businesses in New York are urging Governor Kathy Hochul to veto legislation that would establish a state cannabis industry wage board, arguing that it would lead to significantly higher prices for legal marijuana and potentially force businesses, including those prioritized for social equity, to close.
The Safe Affordable Cannabis New York coalition is campaigning against the bill, distributing stickers and directing consumers to a website where they can send messages to the governor. The coalition states that the bill is a "Big Labor power play" that would introduce excessive costs into the industry.
Under current New York law, licensed cannabis businesses are required to have "labor peace agreements" that facilitate employees' right to organize. However, recent court rulings have suggested these mandates may conflict with federal law. The proposed wage board, which would include a representative from the AFL-CIO, a cannabis industry representative, and a state Labor Department appointee, would recommend wages and benefits for all sectors of the cannabis industry.
Industry insiders contend that increased labor costs would inevitably be passed on to consumers, making legal cannabis less competitive and potentially driving customers back to the illicit market. Osbert Orduña, founder of The Cannabis Place in Queens and chairman of the Safe Affordable Cannabis New York coalition, stated that higher prices benefit illicit operators, including international drug trafficking cartels.
"When Albany passes laws that raise prices, our communities lose and the illicit market wins," Orduña said. "If Gov. Hochul signs this bill into law, businesses will close and hardworking New Yorkers in the cannabis industry will lose their jobs."
The coalition also points out that the current legal framework already imposes significant costs. Distributors pay a 9% fee to retailers, and retailers collect a combined 13% tax—9% for the state and 4% for local governments—from customer sales. Research cited by the coalition suggests that a 10% increase in cannabis taxes can reduce legal sales by 12.6%, and a 10% price increase can decrease legal sales by 18%.
Growers are also concerned about absorbing additional expenses. Joseph Calderone, chief operating officer of Grateful Valley Farm and co-founder of the Cannabis Farmers Association, noted the heavy investment required to operate under New York's demanding regulations and stated, "We can’t simply absorb another layer of costs."
Supporters of the wage board, such as Mario Cilento, president of the New York State AFL-CIO, argue that it is necessary to ensure adequate wages and benefits for cannabis workers and to meet social equity and economic development goals.
The rollout of New York's legal cannabis market has faced numerous challenges, including delays in dispensary approvals, the flourishing of illicit operators, and turmoil within state regulatory agencies. A scathing audit by the governor's office and admissions of miscalculations by the Office of Cannabis Management have highlighted early difficulties. The governor's office has stated that Hochul is currently reviewing the bill.