National and Local Cannabis Advocacy Groups voice concerns & propose common sense amendments to NY’s Cannabis Control Board’s proposed PLMA regulatory changes.
— MCBA, M4MM, NHCC Tri-State, SDVICA, NYCRA, LICC
NEW YORK CITY, NY, UNITED STATES, October 28, 2024 /EINPresswire.com/ — The proposed amendments to the Packaging, Labeling, Marketing, and Advertising Regulations under Parts 128 and 129 of the New York Code of Rules and Regulations (NYCRR) have raised significant concerns among industry stakeholders, particularly regarding their implications for market fairness and tax compliance.
Key Concerns:
Taxation Compliance: The amendment does not mandate that cannabis retail sales tax be applied to the full price of products, allowing for discounted sales that could significantly diminish state and local tax revenues. Similar regulations in other states have ensured that the tax is calculated on pre-discount prices to uphold fiscal integrity.
Market Value Definition: By allowing promotions that inherently lower the price of cannabis products, the amendment contradicts the foundational principle that cannabis should be sold at or above market value. This creates an unsustainable market environment that could disadvantage smaller licensees and erode consumer trust.
Section 129.2(q)
The Office has proposed the following amendment to the regulations:
A licensee may advertise through price reductions or any other discount, coupons, points-based reward systems, customer loyalty programs, or “buy-one-get-one” offers provided that: (1) such offers do not result in the sale of cannabis products below market value or subvert State and local tax collections; (2) if not within a licensed or permitted premises the advertising or advertisement of such offers is in the form of an electronic communication, mailer or via a licensee’s website where the intended audience is adults twenty-one years of age or over; and (3) the advertising or advertisement of such offers is not adhered or affixed to a cannabis product package or label.
This is problematic as, despite the Office’s attempt to navigate around the regulatory prohibitions, the amendment as written is in clear violation. In regard to the subversion of State and local taxation, the regulations must require that licensees charge the cannabis retail sales tax on the full price of the cannabis or cannabis product and not the discounted price. This taxation requirement is in place in other States to ensure that licensees do not lower prices, thereby subverting tax collection, and having a negative impact on projected tax receipts.
In regard to the prohibition under the Cannabis Law that states, advertisements may promote or implement discounts, coupons, or other means of selling adult-use cannabis products below market value, the proposed amendment does just that. By definition, a discount, coupon, buy one-get one, etc., offer is a licensee selling cannabis products for below market value. In other words, if the argument were to be made that such an advertisement is not the advertising of selling cannabis below market value, no such coupon, discount, etc. would be necessary, it would instead just be the market value.
Proposed Language:
(q) A licensee authorized to conduct retail sales may advertise a discount through a paid [price reductions or any other discount, coupons] points based reward system or customer loyalty program[s, or “buy one get one” offers] provided that:
(i) such offers do not result in the sale of cannabis products below market value, which shall be defined as being twice the wholesale price minus 15%;
(ii) the retail tax due on such products is calculated on the pre-discount price so as to not [or] subvert state and local tax collections;
(iii) if not within a licensed or permitted premises the advertising or advertisement of such offers is in the form of an electronic communication, mailer, or via a licensee’s website where the intended audience is adults twenty-one years of age and over; and
(iv) the advertising or advertisement of such offers is not adhered or affixed to a cannabis product package or label.
Section 129.2(s)
The regulations propose allowing licensees to give away free cannabis products to cannabis consumers. The proposed Section 129.2(s) should be removed from the proposed regulation amendments.
This would allow the larger licensees to gain an unfair advantage over smaller licensees who may not be able to afford such giveaways. The Cannabis Law was created and implemented with the idea that those who have been disproportionately harmed by cannabis prohibition be given the chance to build generational wealth and make up for past harms. With this proposal, the Office is creating a race to the bottom that will not only detrimentally impact small cannabis businesses, but raises the possibility that a justice impacted individual may invest a significant part of their savings only to lose it all because a larger licensee was able to give away free products to consumers.
Conclusion:
We urge the Office to reconsider these proposed amendments in light of their potential to harm both the market and the intent of New York’s cannabis legislation. The health of the industry depends on fair competition and adherence to regulatory principles that support all licensees, especially those who have been historically marginalized.
Respectfully,
Service Disabled Veterans In Cannabis Association
Minority Cannabis Business Association
Minorities for Medical Marijuana
National Hispanic Cannabis Council : Tri-State Chapter
New York Cannabis Retail Association
Long Island Cannabis Coalition
Osbert Orduna
Service Disabled Veterans In Cannabis Association
+1 631-836-4909
[email protected]
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Article originally published on www.einpresswire.com as National & Local Cannabis Advocacy Groups Voice Concerns Over Proposed Amendments to NY’s Cannabis PLMA Regulations
