Amd §§71, 72 & 3, Cannabis L; amd §§63, 3, 105 & 102, add §63-b, ABC L; amd §493, Tax L; amd §99-ii, St Fin L
Authorizes the issuance of a low potency cannabis beverage retail permit to licensed off-premises liquor and wine stores to allow the regulated sale of low potency cannabis single use beverages that contain no more than 5mg of THC manufactured by New York state adult-use licensees; provides for the allocation of low potency cannabis beverage tax revenue in the New York state cannabis revenue fund.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10191
SPONSOR: Zaccaro TITLE OF BILL:
An act to amend the cannabis law and the alcoholic beverage control law,
in relation to the issuance of a low potency cannabis beverage retail
permit; to amend the tax law, in relation to the imposition of tax on
the sale or transfer of certain low potency cannabis beverages; and to
amend the state finance law, in relation to the allocation of low poten-
cy cannabis beverage tax revenue in the New York state cannabis revenue
fund
PURPOSE OR GENERAL IDEA OF BILL:
This bill authorizes the issuance of a Low Potency Cannabis Beverage
Retail Permit to licensed off-premises liquor and wine stores, allowing
for the regulated sale of Low Potency Cannabis Beverages manufactured by
New York state adult-use licensees.
SUMMARY OF PROVISIONS:
Section 1. Subdivision 1 of 71 of the cannabis law is amended to include
businesses licensed under 63 of the alcoholic beverage control law.
Section 2. Subdivision 1 of 72 of the cannabis law is amended to prohib-
it the sale of cannabis at retail without a retail dispensary license
except as otherwise provided in 63-b of the alcoholic beverage control
law.
Section 3. 3 of the cannabis law is amended to add a new subdivision to
define Low Potency Cannabis Beverage.
Section 4. Subdivisions 1 of 63 of the alcoholic beverage control law is
amended to include low potency cannabis beverages and subdivision 4 of
63 of the alcoholic beverage control law is amended to.include low
potency cannabis beverages as defined in subdivision thirty-nine 3 of
this chapter.
Section 5. The alcoholic beverage control law is amended to add a new
63-b to establish a low potency cannabis beverage permit issued by the
state liquor authority.
Section 6. 3 of the alcoholic beverage control law is amended to add a
new subdivision 39 that defines low potency cannabis beverages.
Section 7. Subdivision 16 of the 105 of the alcoholic beverage control
law is amended to include cannabis.
Section 8. Subdivision 8 of 102 of the alcoholic beverage control law is
amended to prohibit any alcoholic beverage retail licensee to sell
cannabis with the exception of low potency cannabis beverages.
Section 9. Subdivision (c) of 493 of the tax law is amended to impose a
tax on the sale or transfer of low potency cannabis beverages by
distributors to a person holding a cannabis beverage retail permit under
63-b of the alcoholic beverage control law at a rate of nine percent and
impose a tax on the retail sale of low potency cannabis beverages by a
permittee under 63-b of the alcoholic beverage control law to a consumer
at a rate of thirteen percent of the amount charged for such sale.
Section 10. 99-ii of the state finance law is amended by adding a new
subdivision 3-a to allow the revenues derived from the thirteen percent
retail tax on low potency cannabis beverages in the amount of one
percent to the state liquor authority for the costs of implementation,
administration and enforcement of the cannabis beverage retail permit,
two percent to the cannabis revenue fund to provide loans, grants and
technical assistance to small businesses and social and economic equity
applicants, two percent to the cannabis revenue fund to be used by the
office of cannabis management for trade practice oversight and the
enforcement of laws against the illicit sale of cannabis, four percent
to be distributed to the local municipality in which the sale occurred
and four percent to the New York State cannabis revenue fund for the
general purposes set forth in this section.
Section 11. The opening paragraph of subdivision 4 of 99-ii of the state
finance law is amended to include subdivisions three and three-a of this
section.
Section 12. Effective date.
JUSTIFICATION:
Currently, consumers are spending an estimated $482 million on cannabis
beverages illegally marketed through federal "hemp" loopholes in bodegas
and gas stations. By replicating Article 4 Adult-Use framework, New York
ensures these products are grown by local farmers and manufactured by
licensed New York processors under strict quality-control standards, and
that the State benefits from the associated tax revenue.
New York's independent liquor stores are uniquely qualified to retail
low potency cannabis beverages. They are already required to be inde-
pendently owned, must maintain a distance of at least 200 feet from
schools and houses of worship, and employ staff trained in rigorous
age-verification protocols.
Crucially, this bill protects the existing dispensary market. By capping
these beverages at a low potency of 5mg of THC, the state creates a
distinct product for new consumers that differentiates itself from the
higher-dose cannabis beverages sought by adult-use dispensary shoppers.
This bill would also provide revenue to fund loans and grants for social
equity-owned dispensaries, furthering the intent of the Marijuana Regu-
lation and Taxation Act of 2021. The resulting tax revenue also provides
needed enforcement resources for the Office of Cannabis Management and
will fund Community Reinvestment Grants, State Education, and Drug
Treatment.
PRIOR LEGISLATIVE HISTORY:
New bill
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect on the one hundred and eightieth day after it
shall have become a law. Effective immediately, the addition, amendment
and/or repeal of any rule or regulation necessary for the implementation
of this act on its effective date are authorized to be made and
completed on or before such effective date.
STATE OF NEW YORK
________________________________________________________________________
10191
IN ASSEMBLY
February 12, 2026
___________
Introduced by M. of A. ZACCARO -- read once and referred to the Commit-
tee on Economic Development
AN ACT to amend the cannabis law and the alcoholic beverage control law,
in relation to the issuance of a low potency cannabis beverage retail
permit; to amend the tax law, in relation to the imposition of tax on
the sale or transfer of certain low potency cannabis beverages; and to
amend the state finance law, in relation to the allocation of low
potency cannabis beverage tax revenue in the New York state cannabis
revenue fund
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 71 of the cannabis law is amended
2 to read as follows:
3 1. A distributor's license shall authorize the acquisition,
4 possession, distribution and sale of cannabis from the licensed premises
5 of a licensed adult-use cultivator, processor, adult-use cooperative,
6 microbusiness, or registered organization authorized pursuant to this
7 chapter to sell adult-use cannabis, to duly licensed retail
8 dispensaries, businesses licensed under section sixty-three of the alco-
9 holic beverage control law, and on-site consumption sites.
10 § 2. Subdivision 1 of section 72 of the cannabis law is amended to
11 read as follows:
12 1. Except as otherwise provided in section sixty-three-b of the alco-
13 holic beverage control law, no person shall sell cannabis at retail
14 without a retail dispensary license. A retail dispensary license shall
15 authorize the acquisition, possession, sale and delivery of cannabis
16 from the licensed premises of the retail dispensary by such licensee to
17 cannabis consumers.
18 § 3. Section 3 of the cannabis law is amended by adding a new subdivi-
19 sion 56 to read as follows:
20 56. "Low potency cannabis beverage" means a single-use beverage
21 container that contains no more than five milligrams of total THC.
22 § 4. Subdivisions 1 and 4 of section 63 of the alcoholic beverage
23 control law, subdivision 1 as amended by section 3 of part K of chapter
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14705-01-6
A. 10191 2
1 60 of the laws of 2004 and subdivision 4 as amended by chapter 24 of the
2 laws of 2024, are amended to read as follows:
3 1. Any person may make an application to the appropriate board for a
4 seven day license to sell liquor or low potency cannabis beverages at
5 retail not to be consumed upon the premises where sold. Such application
6 shall be in such form and shall contain such information as shall be
7 required by the rules of the liquor authority and shall be accompanied
8 by a check or draft in the amount required by this article for such
9 license.
10 4. No licensee under this section shall be engaged in any other busi-
11 ness on the licensed premises. The sale of lottery tickets, when duly
12 authorized and lawfully conducted, the sale of reusable bags as defined
13 in section 27-2801 of the environmental conservation law, the sale of
14 corkscrews or the sale of ice or the sale of publications, including
15 prerecorded video and/or audio cassette tapes, or educational seminars,
16 designed to help educate consumers in their knowledge and appreciation
17 of alcoholic beverages, as defined in section three of this chapter and
18 allowed pursuant to their license, or the sale of non-carbonated, non-
19 flavored mineral waters, spring waters and drinking waters or the sale
20 of glasses designed for the consumption of wine or liquor, racks
21 designed for the storage of wine, and devices designed to minimize
22 oxidation in bottles of wine which have been uncorked, low potency
23 cannabis beverages as defined in subdivision thirty-nine of section
24 three of this chapter, or the sale of gift bags, gift boxes, associated
25 gift or promotional items, or wrapping, for alcoholic beverages
26 purchased at the licensed premises shall not constitute engaging in
27 another business within the meaning of this subdivision. Any fee
28 obtained from the sale of an educational seminar shall not be considered
29 as a fee for any tasting that may be offered during an educational semi-
30 nar, provided that such tastings are available to persons who have not
31 paid to attend the seminar and all tastings are conducted in accordance
32 with section sixty-three-a of this article. For the purposes of this
33 section, gift or promotional items shall only include those items that
34 are complimentary and directly associated with the sale of wine or
35 liquor they are promoting and shall mean: (i) items that are de minimis
36 in value, but in no instance shall merchandise be valued at more than
37 fifteen dollars in total; (ii) items that are imprinted with the wine or
38 liquor brand logo on the gift or promotional item; and (iii) items that
39 are included as part of a manufactured pre-sealed package with the wine
40 or liquor that is being gifted or promoted. Further, for the purposes of
41 this section, promotional items shall not include any food, non-alcohol-
42 ic beverage, or other drink or food mix, nor shall these items be
43 offered for sale to the general public as individual items.
44 § 5. The alcoholic beverage control law is amended by adding a new
45 section 63-b to read as follows:
46 § 63-b. Low potency cannabis beverage retail permit. 1. The authority
47 is hereby authorized to issue a cannabis beverage retail permit to the
48 holder of a license to sell liquor at retail for consumption off the
49 premises pursuant to section sixty-three of this article.
50 2. Such permit shall authorize the permittee to sell low potency
51 cannabis beverages, as defined in subdivision fifty-six of section three
52 of the cannabis law, at retail for off-premises consumption.
53 3. (a) The annual fee for such permit shall be determined by the
54 authority, provided that such fee shall be commensurate with the admin-
55 istrative costs of issuing and overseeing such permit.
A. 10191 3
1 (b) Such permit shall run concurrently with the underlying retail
2 license and shall be renewed at the same time as such license.
3 (c) The revocation, suspension, or cancellation of the underlying
4 retail license shall automatically result in the same for the permit
5 issued under this section.
6 4. All low potency cannabis beverages shall be maintained in a sepa-
7 rate and distinct area of the licensed premises from alcoholic beverag-
8 es, clearly marked by signage as required by the authority.
9 5. Low potency cannabis beverage retail permittees shall maintain
10 inventory records of all low potency cannabis beverages acquired, in the
11 possession of the permittee, and sold using a software system determined
12 by the office of cannabis management.
13 6. The authority and the office of cannabis management shall enter
14 into a memorandum of understanding to coordinate the inspection and
15 enforcement of provisions relating to this endorsement.
16 7. (a) No permittee under this section shall sell, deliver, or give
17 away, or cause or permit or procure to be sold, delivered, or given away
18 any low potency cannabis beverage to any person, actually or apparently,
19 under the age of twenty-one years.
20 (b) It shall be an affirmative defense that such person had produced a
21 photographic identification card issued by a governmental entity and
22 that the beverage had been sold in reasonable reliance upon such iden-
23 tification, as provided in section sixty-five-b of this article.
24 8. A violation of the age restrictions set forth in this section shall
25 be deemed a violation of section sixty-five of this article for the
26 purposes of administrative proceedings to revoke, cancel, or suspend the
27 underlying retail license.
28 § 6. Section 3 of the alcoholic beverage control law is amended by
29 adding a new subdivision 39 to read as follows:
30 39. "Low potency cannabis beverage" means a single-use beverage
31 container manufactured at a premise licensed under article four of the
32 cannabis law that contains no more than five milligrams of total THC as
33 defined under section three of the cannabis law.
34 § 7. Subdivision 16 of section 105 of the alcoholic beverage control
35 law, as amended by chapter 621 of the laws of 1944, is amended to read
36 as follows:
37 16. No retail licensee to sell liquors and/or wines for off-premises
38 consumption shall be interested, directly or indirectly, in any premises
39 where liquors, cannabis, wines or beer are manufactured or sold at
40 wholesale or any other premises where liquor or wine is sold at retail
41 for off-premises consumption, by stock ownership, interlocking direc-
42 tors, mortgage or lien on any personal or real property or by any other
43 means. Any lien, mortgage or other interest or estate, however, now
44 held by such retailer on or in the personal or real property of such
45 manufacturer or wholesaler, which mortgage, lien, interest or estate was
46 acquired on or before December thirty-first, nineteen hundred thirty-
47 two, shall not be included within the provisions of this subdivision;
48 provided, however, the burden of establishing the time of the accrual of
49 the interest comprehended by this subdivision, shall be upon the person
50 who claims to be entitled to the protection and exemption afforded here-
51 by.
52 § 8. Subdivision 8 of section 102 of the alcoholic beverage control
53 law, as added by chapter 92 of the laws of 2021, is amended to read as
54 follows:
55 8. [No] With the exception of low potency cannabis beverages, no alco-
56 holic beverage retail licensee shall sell cannabis, as defined in
A. 10191 4
1 section three of the cannabis law, nor have or possess a license or
2 permit to sell cannabis, on the same premises where alcoholic beverages
3 are sold.
4 § 9. Subdivision (c) of section 493 of the tax law, as added by chap-
5 ter 92 of the laws of 2021, is amended to read as follows:
6 (c) (i) In addition to the taxes imposed by subdivisions (a) and (b)
7 of this section, there is hereby imposed a tax on the sale or transfer
8 of adult-use cannabis products to a retail customer by a person who
9 sells adult-use cannabis products at retail at the rate of four percent
10 of the amount charged by such person for such adult-use cannabis prod-
11 uct, which tax shall accrue at the time of such sale or transfer. The
12 tax imposed by this subdivision is imposed on a person who sells adult-
13 use cannabis products at retail, and shall be paid to the commissioner
14 in trust for and on account of a city having a population of a million
15 or more, and counties (other than counties wholly within such a city),
16 towns, villages, and cities with a population of less than a million in
17 which a retail dispensary is located.
18 (ii) There is hereby imposed a tax on the sale or transfer of low
19 potency cannabis beverages by a distributor to a person holding a canna-
20 bis beverage retail permit under section sixty-three-b of the alcoholic
21 beverage control law at the rate of nine percent of the amount charged
22 for such sale or transfer.
23 (iii) There is hereby imposed a tax on the retail sale of low potency
24 cannabis beverages by a permittee under section sixty-three-b of the
25 alcoholic beverage control law to a consumer at the rate of thirteen
26 percent of the amount charged for such sale.
27 § 10. Section 99-ii of the state finance law is amended by adding a
28 new subdivision 3-a to read as follows:
29 3-a. Notwithstanding any other provision of law, the revenues derived
30 from the thirteen percent retail tax on low potency cannabis beverages
31 shall be distributed as follows:
32 (a) One percent to the state liquor authority for the costs of imple-
33 mentation, administration, and enforcement of the cannabis beverage
34 retail permit;
35 (b) Two percent to the cannabis revenue fund, to be administered by
36 the office of cannabis management, for the specific purpose of providing
37 loans, grants, and technical assistance to small businesses and social
38 and economic equity applicants;
39 (c) Two percent to the cannabis revenue fund to be used by the office
40 of cannabis management for trade practice oversight and the enforcement
41 of laws against the illicit sale of cannabis;
42 (d) Four percent to be distributed to the local municipality in which
43 the sale occurred; and
44 (e) Four percent to the New York state cannabis revenue fund for
45 general purposes as set forth in this section.
46 § 11. The opening paragraph of subdivision 4 of section 99-ii of the
47 state finance law, as added by chapter 92 of the laws of 2021, is
48 amended to read as follows:
49 After the dispersal of moneys pursuant to [subdivision] subdivisions
50 three and three-a of this section, the remaining moneys in the fund
51 deposited during the prior fiscal year shall be disbursed into the state
52 lottery fund and two additional sub-funds created within the cannabis
53 revenue fund known as the drug treatment and public education fund and
54 the community grants reinvestment fund, as follows:
55 § 12. This act shall take effect on the one hundred eightieth day
56 after it shall have become a law. Effective immediately, the addition,
A. 10191 5
1 amendment and/or repeal of any rule or regulation necessary for the
2 implementation of this act on its effective date are authorized to be
3 made and completed on or before such effective date.
