Last verified: April 2026
What MRTA Did
The Marihuana Regulation and Taxation Act (MRTA) was signed into law on March 31, 2021, after a decade of failed attempts in Albany. In a single statute, it:
- Repealed Penal Law Article 221 (the old criminal-cannabis statute) and replaced it with Penal Law Article 222;
- Created the Cannabis Control Board (CCB) as the policy-making body and the Office of Cannabis Management (OCM) as its operational arm;
- Established the framework for adult-use cultivation, processing, distribution, retail, microbusiness, on-site consumption, delivery, cooperative, nursery, and registered-organization licenses;
- Set a goal that 50% of adult-use licenses go to social and economic equity (SEE) applicants;
- Authorized the automatic expungement of pre-MRTA cannabis convictions;
- Set the consumer-rights floor that NYC operates under today.
Article 222 — The New Penal Law
Article 222 dramatically downgraded penalties from the old Article 221. Personal possession of cannabis up to 3 oz / 24 g concentrate is no longer a crime in any form — it is simply lawful conduct under Penal Law § 222.05. Above that line:
| Statute | Conduct | Class |
|---|---|---|
| § 222.25 | More than 3 oz / 24 g but less than 16 oz | Violation; up to $125 fine, no jail, no record |
| § 222.30 | More than 16 oz cannabis or 5 oz concentrate | Class A misdemeanor (up to 1 yr / $1,000) |
| § 222.35 | More than 5 lbs cannabis or 2 lbs concentrate | Class E felony |
| § 222.40 | More than 10 lbs cannabis or 4 lbs concentrate | Class D felony |
| § 222.45 | Unlawful sale (any unlicensed sale) | Violation; fine up to $250 |
| §§ 222.50–.65 | Sale escalations through aggravated criminal sale (≥100 lbs) | Class A misdemeanor up to Class C felony |
The shift from misdemeanor to violation for the 3 oz–16 oz tier is the single most significant criminal-law change in modern NY cannabis policy. A violation is not a crime, carries no jail time, and produces no criminal record — only a fine of up to $125. This is the floor the MRTA built.
The CCB & OCM Structure
Cannabis Law § 7 establishes OCM. The Cannabis Control Board, chaired (until June 2025) by Tremaine Wright and now by Jessica C. García, sits above OCM and approves regulations, licenses, and major policy actions. OCM’s executive director is the operational leader. Five members make up the CCB; OCM staffs the day-to-day work.
The MRTA also created the Office of Cannabis Management Hemp program (a separate license stream for cannabinoid hemp products) and the Cannabis Advisory Board, an advisory body of consumers, industry representatives, and equity advocates.
Local Authority and the Opt-Out Window
Cannabis Law § 131 gave municipalities until December 31, 2021 to opt out of allowing adult-use retail dispensaries or on-site consumption sites. NYC did not opt out. Many smaller upstate municipalities and several Long Island towns did. A municipality that opts out cannot then opt back in unilaterally; voters would have to reverse the opt-out at a later referendum.
Tax Structure
The original MRTA tax structure included a THC-content-based excise tax that proved difficult to administer; FY25 budget legislation replaced it with a simpler retail-price excise tax:
| Tax | Rate | Notes |
|---|---|---|
| State adult-use excise tax | 9% | Imposed on retail price; replaced original THC-content tax in FY25 |
| Local (NYC) adult-use excise tax | 4% | 3% city + 1% MTA-region surcharge |
| Standard NYC sales tax | Not applied to adult-use cannabis | The 9% / 4% structure replaces standard sales tax on cannabis |
| Medical cannabis | 7% excise + standard sales tax | Lower effective rate than adult-use |
Verify current rates with the NYS Department of Taxation and Finance and OCM before relying on these figures for business or budget decisions.
By the MRTA five-year mark on March 31, 2026, statewide cumulative legal sales had reached approximately $3.3 billion per the Governor’s Office. Cannabis tax revenue funds the Drug Treatment and Public Education Fund, the Community Reinvestment Grants Program, and the Cannabis Revenue Fund.
The MRTA’s Equity Architecture
One of the law’s defining choices was to set a 50% goal for SEE-applicant licenses — the most ambitious equity target written into any U.S. cannabis legalization statute. SEE applicants include Communities Disproportionately Impacted (CDI) by prior cannabis enforcement, minority-owned businesses, women-owned businesses, distressed farmers, and service-disabled veterans. As of February 2026, the CCB reported 53% of newly approved licenses in that cohort went to SEE applicants — a meaningful step toward the goal, though the broader equity outcome has been mixed (see The MRTA 50% Equity Goal).
What the MRTA Did Not Do
The MRTA legalized adult-use cannabis at the state level but did not change federal law. Cannabis remains Schedule I under the federal Controlled Substances Act. Federal employment, federal contractors, federal land, and the federal financial system (banking, securities) all still operate under federal cannabis prohibition. The Federal Employment in NYC page details the practical consequences for the city’s federally-tied workforce.
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