Statutory Provisions for MRTA to Protect the Environment, Farmers, and Revitalize Rural Communities and Urban Communities through Seed to Sale Equitable Supply Chain

Submitted on behalf of

New York’s Small Farm Alliance of Cannabis Growers & Supporters

(Small FarmA)

May 29, 2019

Andi Novick, Esq. https://nysmallfarma.org/

The legalization of cannabis presents the single largest economical boost for farming communities that this state has ever witnessed. And yet, as the state is preparing to authorize the growing of an agriculture crop for the first time in a century, the MRTA has failed to include farmers in this new industry. Moreover, the MRTA has neglected to control carbon emissions: an indispensable part of any new legislation, particularly when that legislation is ushering in one of the worst greenhouse polluters of any industry in the United States.

This document includes our statutory proposals to correct these omissions through language that supports small farmers, employing regenerative farming practices, who grow without the use of synthetic chemicals and with the greatest reverence for the planet and the climate crisis that can no longer be ignored. All proposed statutory language is written in blue type.

Reducing carbon emissions are priorities that must be incorporated into all new legislation- particularly the MRTA

It is irresponsible and disingenuous for NYS or NYC to proclaim bold targets for curbing harmful carbon emissions only to undermine those efforts by surrendering the reigns of leadership to a notorious carbon polluting industry.

In a widely-cited 2012 study from the US Dept of Energy’s Lawrence Berkeley National Laboratory,[i] it was estimated that growing legal and illegal cannabis indoors in the United States used $6 billion dollars of electricity per year- primarily due to power grow lights and cooling systems. That’s one percent of America’s total electricity use! [ii] Annually, that amount of consumption is equivalent to greenhouse gas emissions (CO2) from that of three million average cars.[iii] And that was 7 years ago before Washington, Colorado and 8 more states legalized.[iv] According to another report by a clean energy research firm, indoor cannabis cultivation’s energy-use is so intense, it is 50-200 times more energy-intense than a typical office building. [v]

We already know that indoor cannabis cultivation is one of the most energy intensive industries in the U.S. The unsustainable way cannabis is grown indoors releases disastrous levels of greenhouse gas pollution into the atmosphere. And yet, the MRTA is silent.

Massachusetts, recognizing that indoor cannabis cultivation could throw off their commitment to reducing carbon emissions, restricted electrical use, capping it at 36 watts per square foot of cultivation space. Boulder Colorado requires that all medical and recreational cannabis growers report their energy use to the city and offset 100% of their electricity use with renewables.

Consistent with New York’s commitment to reduce carbon in the atmosphere, clearly no businesses operating as a result of this new legislation should be permitted to operate in contravention of these goals. The MRTA must incorporate these climate-saving requirements for all cannabis growing: both restricting electrical consumption as well as requiring that all fossil fuel-based energy be offset 100% from renewable sources. To fail to do so not only undermines New York’s stated objectives, but dangerously hinders our very real need to reduce global heating with expediency.

Accordingly, we propose including the following language at Article 2, section 12 of the MRTA, to reflect the imperative of controlling energy use and concomitant carbon emissions:

§ 12. Rulemaking authority.

4. The office, in consultation with the department of agriculture and markets and the department of environmental conservation, shall promulgate necessary rules and regulations governing the safe production of cannabis, including environmental and energy standards and restrictions on the use of pesticides, including a minimum requirement that the Lighting Power Densities (LPD) for any indoor cultivation space must not exceed an average of 36 watts per gross square foot of active and growing space canopy. All licensed medical and adult-use indoor cannabis growers must report their energy use to the state and offset 100% of their electric use.

Regenerative farming practices must be an essential component of the MRTA

The afore referenced Berkeley report stated the obvious:

Shifting cultivation outdoors can nearly eliminate energy use for the cultivation process.

Cannabis is a crop. Farmers grow crops. New York is a great farming state. And yet the MRTA remains silent on farming and agriculture. Not only does outdoor growing eliminate the energy problem, but regenerative or carbon farming goes beyond simply reducing emissions of greenhouse gasses: we can capture those gasses and sequester the carbon in the ground. Of course, the legislature has already recognized the value of carbon farming in the Carbon Farming Act.

In passing the Carbon Farming Act, the Assembly declared that “enhancing carbon sequestration, the long-term storage of carbon in plants [and] soils, through farming is in the best interest of New Yorkers.”

As a matter of policy and “in the best interests of New Yorkers,” any new legislation involving the growing of a crop must incorporate what the Carbon Farming Act recognized that:

“[b]y using no-till systems, planting cover crops, trees and perennial forages, and managing compost application, farmers can see improvements in water holding capacity, nutrient storage, and reduced erosion…. All of these farming practices have the collateral benefit of sequestering carbon in the soil, thereby reducing its release into the atmosphere as CO2.”[vi]

We are seeking the opportunity to set the paradigm for best growing practices in NYS and introduce regenerative farming as one of our best strategies for halting global heating. We are asking that the MRTA mandate that all cannabis be consciously grown with regard to its carbon footprint, and that at least all outdoor and greenhouse grown cannabis be grown pursuant to the practices described in the Carbon Farming Act, requiring regenerative farming practices and banning all synthetic chemicals.

Accordingly, we propose adding the following language at the MRTA § 2.

§ 2. Legislative findings and intent.

...............................

It is further declared that it is in the interest of the public’s health and safety to support the cultivation and processing of regeneratively grown, pesticide-free cannabis and is the intention of this law to promote and encourage full participation by small farmers and craft growers in the regulated cannabis industry.

It is further declared and the legislature hereby finds that soil and vegetation management can significantly enhance soil and carbon sequestration, resulting in a wide range of environmental and agricultural benefits to New York farmers and residents, including: increased yields; soil health; improved water quality; and reductions in greenhouse gases. The legislature further declares that enhancing carbon sequestration, the long- term storage of carbon in plants, soils, geologic formations and the ocean, through farming is in the best interest of New Yorkers.

It is therefore the intent of the legislature that all outdoor cultivation of cannabis, including greenhouse production, be grown pursuant to the best regenerative farming carbon-negative practices and principles, in consultation with the department of agriculture and markets.

All Cannabis in NYS should be grown free of synthetic chemicals

We’are asking that the MRTA go beyond mandating that at least all outdoor and greenhouse grown cannabis be grown pursuant to the practices described in the Carbon Farming Act to specify that no synthetic pesticides, fertilizers, chemicals be permitted. We know that pesticide use is itself a major contributor to increased greenhouse emissions. Synthetic pesticides and fertilizers are often made from fossil fuels. Synthetic nitrogen fertilizers in soils produce nitrous oxide, a greenhouse gas about 300 times more powerful than carbon dioxide at trapping heat in the atmosphere.[vii]

Moreover, aside from the general toxicity of pesticides, very little is known about what happens when pesticides are heated. Cannabis is consumed primarily by smoking or vaping and inhaling pesticides is considered a more potent route of exposure!

There are no studies showing what happens to the chemicals in pesticides once heated. The chemicals allowed to be used by the MRTA- those permitted by the department of environmental conservation or “that specifically meet the United States environmental protection agency registration exemption criteria for minimum risk pesticides”- have only been approved for limited purposes which do not consider the effect of heating the chemicals in the pesticides. Take as one example Myclobutanil, a fungicide and reproductive toxin commonly used by cannabis and grape growers to combat powdery mildew.

On grapes, which are capable of being washed, myclobutanil is considered to have low toxicity if used correctly. Burt when heated, we know that myclobutanil releases hydrogen cyanide, a gas so toxic it’s been used in chemical warfare. Myclobutanil has not be approved for use on tobacco.

Since none of the registrations with the EPA take into account exposure patterns related to cannabis use, there is no assessment of adverse health effects. Therefore, we are proposing that pesticides registered by the EPA be banned from use in cannabis production in New York. This leaves growers with biological and botanical pesticide products that are considered appropriate for organic farming. This does not include minimum risk pesticides as currently permitted by the MRTA § 81(4) and § 104(2).

Permitting the use of “minimum risk” pesticides exposes New Yorkers to unknown risks which may be anything but minimum. According to the EPA, it is the manufacture of the pesticide who gets to determine whether the risk posed by its product is dangerous or not! And if the manufacturer claims its products are safe enough, the EPA takes the company at its word! This is from the EPA’s website[viii] regarding minimum risk pesticides:

What is a minimum risk pesticide?

Because EPA has determined that certain "minimum risk pesticides" pose little to no risk to human health or the environment, EPA has exempted them from the requirement that they be registered under the Federal Insecticide, Fungicide, and Rodenticide Act.

Starting in 1996, we exempted such products to reduce the cost and regulatory burdens on businesses and the public for pesticides posing little or no risk, and to focus our resources on pesticides that pose greater risk to humans and the environment.

Will EPA confirm that my product is a minimum risk pesticide?

Generally, we do not review products that claim to meet the criteria set by 40 CFR 152.25(f) for exemption from pesticide regulation for companies planning to market such a product. We also do not provide a label review of such products. The producer is responsible to carefully read the criteria and make an evaluation of how the product meets (or does not meet) the criteria.

The MRTA authorizes the use of pesticides that the chemical manufacturer self-servingly alleges is safe enough, knowing there is no regulatory agency checking to confirm the veracity of the claim. The MRTA permits the use of chemicals that have never been tested for safety once heated. We are proposing the MRTA be amended to read as follows:

§ 12. Rulemaking authority.

In implementing these regulations, the office shall also prohibit the use of all synthetic chemicals, genetically modified products and pesticides registered with the EPA.

Cultivators possessing a farm-based cannabis license shall only use biological and botanical pesticide products that are considered appropriate for organic or regenerative farming.

We further propose striking from § 81 (4)[ix] and § 104 (2) the authorization to use “pesticides that are registered by the department of environmental conservation or that specifically meet the United States environmental protection agency registration exemption criteria for minimum risk pesticides”. At a minimum we are asking that all outdoor, including greenhouse cultivation of cannabis, be held to a standard that prohibits synthetic chemicals and genetically modified products, restricting cultivators of craft farm-based cannabis to only using biological and botanical pesticide products that are considered appropriate for organic or regenerative farming.

The legalization of cannabis presents the single largest economical boost for farming communities that this state has ever witnessed: It should be the policy of this state to invite the greatest number of regenerative small farm cannabis growers into this industry

In order to take advantage of the billions of dollars available annually for infusion into our farming communities, the MRTA must ensure that a substantial portion of those billions New Yorkers will be spending every year are recycled into small businesses run by women, people of color and other ordinary New Yorkers. This moment presents an enormous opportunity to center a significant portion of this new industry in our farming communities.

We know that regeneratively grown cannabis will provide the most nutrient-rich form of cannabis while literally extracting carbon gasses from the air. We know that cannabis grown indoors, using massive amounts of energy and relying on synthetic chemicals, only contributes to the climate crisis we’re in and that its ingestion is potentially harmful to human life. Therefore, it should be the policy of this state to encourage the greatest amount of its cannabis to be grown outdoors pursuant to regenerative practices, by attracting and supporting as many small farmers to grow as we can.

The legalization of a crop that hasn’t been grown in a century is the singular greatest opportunity for an expanding renaissance in New York’s agriculture economy, using cannabis as the catalyst to model carbon-negative farming practices, urgently needed at this moment. What is best for New York is to make sure this new industry is decentralized, thus spreading the benefits to the greatest number of New Yorkers.

The NYS Legislative Commission on Rural Resources already expressly found in its Fall 2006 report, A Vision for Rural New York:[x]

The future prosperity of our rural regions remains undeniably central to the Empire State’s overall well-being in this new century.

Lessons learned from states such as Colorado, which did not protect the state’s family farming and craft producers, is that concentrated wealth in the hands of a few leaves limited opportunities for small entrepreneurs, most notably our small farmers. It was too late to correct this failing once the law ending prohibition was enacted. This is the moment to take advantage of the billions of dollars that will be available to energize and revitalize our farming communities and regional economies. We propose 50-75% of the new cannabis cultivation market be reserved for small farm and craft production, grown regeneratively and without the use of synthetic chemicals.

Accordingly, we propose amending the MRTA at § 65. 3 as follows:

As New York prepares to open an immensely lucrative market, it is our responsibility to ensure that the generated capital is re-circulated within the state to optimize benefit to residents through increased jobs and wages, increased equity and increased social and environmental impact. After all, it is ordinary New Yorkers who will be spending the projected billions of dollars. Under the MRTA as it currently exists most of those billions will be leaving New York, going to the coffers of large out-of-state canna businesses. But by creating a legal structure directing that at least 50% of the cannabis produced come from small farmers and craft cultivators growing regenerative cannabis, the state will be creating thousands of new businesses and good paying jobs for regular New Yorkers, keeping those billions at home in local businesses and continuing to spur local job growth.

Accordingly, we have created and proposed three types of farm-based licenses: the farm-based cooperative license and the craft cultivator license, which provide the necessary support to small farm growers; and the farm cannabisery license, which should mirror the existing farm brewery laws. The farm-based cooperatives we have proposed are essential to small farmers’ ability to participate in this new industry, as well as to encourage our local and regenerative farms to be producing this crop in the greatest quantity for the health and well-being of New Yorkers.

Farm-based Cooperative License

Our proposed farm-based cooperatives are an indispensable means to support small farmers by providing a hub for growers to learn and share information, while also creating a “built-in” market for small growers’ product as well as furnishing other services to assist small cultivators’ success in this new business. These cooperatives are specifically farm-based and therefore are distinctly different from the cooperatives that have just been added to the MRTA. It has long been recognized that farms require protections specific to the business of farming, as afforded by the statutory scheme of the Agriculture and Markets law.

The farm-based cooperative model we have proposed, by definition, shares the wealth among the thousands of craft growers and small farmers who will have the opportunity to create business for themselves and New York. The farm-based cooperative is the antidote to the corporate single duty to maximize and extract profit model. Indeed, we have provided that the farm-based cooperative must be established as a New York Benefit Corporation, pursuant to Article 17 of the Business Corporation Law[xi], meaning the cooperative will be prioritizing not just profit, but society and the environment. This form of incorporation requires that the farm-based cooperative declare its commitment to creating general public benefit, defined as a “material, positive impact on society and the environment”.

A farm-based cooperative can only be owned by members who are local small farm and craft growers with licenses that restrict the amount of cannabis they can grow. A farm-based cooperative will provide the business structure small outdoor growers require as well as distributing price and profit sharing to its members. A farm-based cooperative must include the license to grow as well as all other licensed activities that the cooperative is capable of: seed breeding and sale of seeds; testing, manufacturing cannabis-infused products & distribution, on-site use, research, delivery and retail sales-farmgate. It is in the interests of all New Yorkers for this new law to herald in a farm-based industry not just because what we’ve proposed is the precise opposite of the wealth consolidation business model we are hoping the state will constrain as it creates this new industry, but because regenerative farming is essential to the preservation of our planet.

We are proposing that regional farm-based cooperatives be established in strategic parts of the State to serve as integral hubs which can support member/growers with a host of services to ensure their success as they’re first starting out. They could serve as testing facilities. They will help educate farmers as to regenerative principles and ensure such practices are adhered to by their members. They could also do the branding, marketing and selling, thus taking that burden off the smaller grower. In addition to providing a “built-in” market for small growers, these hubs would be sharing cultivation knowledge and other resources to assist small growers in this new business; they could serve as seed banks and centers of genetic research - all the while encouraging collaboration, innovation and entrepreneurship, allowing farmers to focus on genetic innovation fitting to the terroir of New York.

Accordingly, we have proposed adding the following licenses at §60 of the MRTA.

§ 60. Licenses issued. The following kinds of licenses shall be issued by the executive director for the cultivation, processing, distribution and sale of cannabis, cannabis producers, and concentrated cannabis to cannabis consumers:

1. Adult-use cultivator license;

2. Adult-use processor license;

3. Adult-use cooperative license;

4. Adult-use distributor license;

5. Adult-use retail dispensary license;

6. On-site consumption license;

7. Microbusiness license;

8. Delivery license;

9. Nursery license;

10. Farm-based cooperative license;

11. Craft cultivator license;

12. Farm cannabisery license

We propose adding the following language regarding farm-based cooperative, after MRTA § 73:

Farm-based cooperative license:

1. This license is available only to small tier growers as defined in this law. All members/owners of a farm-based cooperative must possess either a craft cultivator license or a farm cannabisery license and only those licensees may be members/owners of a farm-based cooperative. The cooperative must be organized as a benefits corporation, pursuant to Article 17 of the Business Corporation Law and provide price and profit sharing to members/owners.

(a) A farm-based cooperative license shall be a single, fully integrated multi-purpose license enabling the cooperative to process cannabis crops from member growers and other licensed outdoor growers, create cannabis-infused products, package, brand, distribute and sell on behalf of its member growers, provide a testing facility, serve as centers of genetic research and seed banks, provide seeds that have been acclimatized to our environment, provide on-site tasting and education to consumers and farmers, to the extent the licensee engages in such activities.

(b) The activities which the farm-based cooperative is entitled to perform pursuant to this license are to be considered ‘farm operations’ pursuant to the Agricultural and Markets Law section 301 (11).

(c) A farm-based cooperative is authorized to sell to duly licensed distributors, retail dispensaries, the on-site location of the farm cooperative (farm gate), farm cannabiseries, and directly to consumers.

(d) All cannabis must be grown outdoors, inclusive of greenhouses, employing regenerative farming practices designed to mitigate the release of carbon into the atmosphere as carbon dioxide (CO2) and sequestering it in the soil including, but not limited to no-till, systems, year-round cover cropping, managed compost applications, and no synthetic pesticides, insecticides, herbicides, fertilizers, or other synthetic chemicals are permitted to be used.

(e) All member/owners of a farm-based cooperative are limited as to the amount of cannabis each member can grow in accordance with their licensed tier, however there is no limitation on the number of members who can participate in the cooperative nor the collective amount of growing space of the farm-based cooperative.

(f) The cooperative will have a physical location where members may choose to have their own plots on the cooperative’s property and said member would be fully responsible for all aspects of cultivating and harvesting the amount of cannabis authorized by the member’s license, much like a community garden.

(g) The cooperative will supply and manage the RFIS plant tagging process, enabling tracking from seed to sale.

(h) The cooperative will assure its members’ compliance with regenerative cultivation practices, quality and quantity.

(i) The cooperative will be responsible for collecting tax on purchases from its member growers and from sales to consumers.

- (j) The cooperative must be run and owned by member farmers with a board of directors and executive leadership. New York residents must hold ownership of at least 60% of the business. The cooperative should be established as a for-profit entity, with at least 20% profit sharing to its supply farm/grower members.

(k) The cooperative should strive to exceed New York’s minimum wage benefits.

Craft Cultivator License

In order to encourage the greatest amount of small regenerative growers to enter this new market, we have provided for smaller tiers of growing space, making it easier for farmers to add cannabis as a new crop to their existing rotation. Smaller tiers also enable the state to charge less in licensing fees that will then increase as farmers scale up in subsequent years. Our proposed craft cultivator license only permits small farm craft grows, limiting the growing area into 6 tiers: the smallest being the outdoor equivalent of 1,000 square feet and the largest being 1 acre. All cannabis must be grown regeneratively and synthetic chemicals are prohibited.

Recognizing the challenges that we’ve seen in other states for existing and new farmers to enter the market, either because they’re small or may not have a background in business - much like a lot of great craft brewers who’ve started successful businesses - we expect craft cultivators will rely heavily on the farm-based cooperatives. That is why farm-based cooperatives are essential if we are to realize the economic growth potential cannabis farming can create for rural communities. Without this farm-based cooperative model, farmers will be locked out of this new industry: a loss not just for farmers, but a missed opportunity for NYS to infuse some of the billions New Yorkers will be spending, into its rural communities.

We have proposed adding the following language after MRTA § 73:

Craft Cultivator License:

1. Any person may apply for this type of cultivation license to grow outdoor, regeneratively farmed cannabis, including greenhouse cultivation, as limited by the following tiers. An applicant must choose one tier, but can apply subsequently to change that tier:

Tier 1: 1,000 SF;

Tier 2: 2,500 SF;

Tier 3: 5,000 SF;

Tier 4: ¼ acre (11,000 SF);

Tier 5: ½ acre (22,000 SF);

Tier 6: 1 acre (44,000 SF).

(a) It is further required that all cannabis must be grown regeneratively employing practices designed to mitigate the release of carbon into the atmosphere as carbon dioxide (CO2) and sequestering it in the soil including, but not limited to no-till, systems, year-round cover cropping, managed compost applications, no synthetic pesticides, insecticides, herbicides, fertilizers or other synthetic chemicals.

(b) The activities which a craft cultivator licensee is entitled to perform pursuant to this license are to be considered ‘farm operations’ pursuant to the Agricultural and Markets Law section 301 (11).

(c) This license shall authorize the sale of cannabis from the licensed premises of the craft cultivator by such licensee to duly licensed farm-based cooperatives, processors in this state, farm cannabiseries, or microbusinesses.

(d) If a craft cultivator grows on her own property and isn’t a member of a cooperative, the state would inspect the facility and the grower would pay an inspection fee. If a craft cultivator grows on her own property and is a member of a cooperative, the cooperative would be responsible for the facility inspection.

(e) Taxes to be paid at the distribution point by distribution entity on all transactions from distributors to retailers. If product sold directly by cannabisery or cooperative, then taxes would be collected on those sales.

Farm Cannabisery License

Mirroring the farm brewery license (and in keeping with the schematic Farm Cidery License, Farm Winery License, and now Farm Meadery License) we have proposed a Farm Cannabisery License. The Farm Cannabisery license is similar to the MRTA’s microbusiness license, but is specific to farming and entitles the licensee to the particular statutory protections farmers and farm operations enjoy pursuant to the Agriculture and Markets Law. Moreover, a cannabisery is essentially a microbusiness located on a farm and as such does not have the option of locating its premises wherever it gets approval. The farm can’t move. Accordingly, for the reasons set forth in this memorandum, a farm cannabisery license, like all farm-based licenses, should be exempt from local zoning. A cannabisery can also be a member of a farm-based cooperative if it chooses.

We have proposed that a cannabisery can apply to grow anywhere from 1,000 square feet to 1 acre, in other words choose one of the tiers described at the craft cultivator license, with the option to scale up in future years. The cannabisery should enjoy all the same statutory protections afforded by the craft brewery laws pursuant to New York’s Alcohol Beverage and Control Law and will reward New York with even greater economic advantage. The benefit to New York’s agriculture and regional communities and the employment and economic development for supporting industries which can arise from keeping this industry small and local, will explode far beyond the wineries, cideries and breweries that have been so successful, if similar support and protection were provided in the MRTA.

Accordingly, the MRTA should be amended to include the following language after MRTA § 73:

Farm Cannabisery License.

1. This license is available only to small tier growers as defined herein. Any person may apply to the office for a farm cannabisery license to cultivate, process and distribute regeneratively grown outdoor cannabis, including greenhouse cultivation. This license includes all the rights afforded by a farm brewery license pursuant to NY Alcohol Beverage and Control Law.

(a) It is further required that all cannabis must be grown locally, outdoors and regeneratively, employing practices designed to mitigate the release of carbon into the atmosphere as carbon dioxide (CO2) and sequestering it in the soil including, but not limited to no-till, systems, year-round cover cropping, managed compost applications, no synthetic pesticides, insecticides, herbicides, fertilizers, or other synthetic chemicals. (b) A licensee pursuant to this section is limited in the amount of cannabis that can be grown and processed and must choose from one of the six cultivation tiers described above. A licensee can subsequently apply to change to a different tier.

(c) The activities which a farm cannabisery licensee is entitled to perform pursuant to this license are to be considered ‘farm operations’ pursuant to the Agricultural and Markets Law section 301 (11).

(d) In addition to the definition of “farm operations” provided in the Agricultural and Markets Law section 301 (11), in the case of farm cannabiseries and farm-based cannabis cooperatives, farm operations include additional secured buildings where cannabis-infused products are manufactured, including, but not limited to, areas for packaging the manufactured cannabis products for distribution, and areas for farm gate or direct farm marketing. In the case of cooperatives “farm operations” could also include secured buildings for laboratory testing, genetic research and/or seed breeding.

(e) A farm cannabisery may manufacture, distribute and sell all of its own harvest and products produced from that harvest directly to consumers, or to a duly licensed state distributor, retail dispensaries, or a licensed farm-based cooperative. Additionally, a cannabisery may purchase up to 2,000 pounds of cannabis from other cannabis establishments in one year.

(f) The cannabisery must be owned by a New York resident farmer and if incorporated, must incorporate as a benefits corporation, pursuant to Article 17 of the Business Corporation Law. The cannabisery should strive to exceed New York’s minimum wage benefits.

(g) The cannabisery will supply and manage the RFIS plant tagging process, enabling tracking from seed to sale.

(h) An owner of a cannabisery shall not hold a license in another license category, shall not own or have ownership interest in a facility licensed pursuant to title five-A of article thirty-three of the public health law, and shall hold not more than one cannabisery license. A cannabisery can be a member of a farm-based cooperative.

(i) The cannabisery will be responsible for collecting tax on purchases and from sales to consumers.

The MRTA’s failure to amend the Agriculture and Markets Law to recognize cannabis as a crop is tantamount to excluding the only type of cannabis cultivation that is not harmful to the environment

Whether a crop is defined at section 301 of the Agriculture and Markets Law (“AML”) is critical to the protection of a farmer, the farm and the ancillary farm operations. AML 305-a protects “farm operations” in an agricultural district. Farm operations are defined at AML 301(11) as meaning “land and on-farm buildings, equipment, … and practices which contribute to the production, preparation and marketing of crops….”.

The definition of crops at AML 301 (2) is extensive as “[o]ver the years, the State Legislature has amended the Agriculture and Markets Law (AML) to enhance the breadth of what constitutes a farm operation, including the type of crops, … considered to be part of an agricultural enterprise.”[xii] Most recently the legislature amended section 301 (2) to add hemp cannabis sativa to the definition of a crop.

The statutory scheme of the AML is relied on by, inter alia, the courts and the Department of Agriculture and Markets in evaluating, as one example, whether a local law is in compliance with AML 305 (a).[xiii] 305-a protects farmers by prohibiting local governments from enacting laws or regulations that unreasonably restrict or regulate farm operations within an agricultural district, unless it can be shown that the public health or safety is threatened.

The MRTA’s failure to include the cannabis sativa that is being authorized by this law is legally equivalent to expressly excluding it as a crop. It’s omission, in accordance with the AML’s statutory scheme, would leave cannabis farms and farm operations totally unprotected, notwithstanding the subject bill’s authorizing the growing of cannabis.

The failure to direct the amendment of the Ag & Markets Law 301 is equivalent to excluding cannabis with more than .3% THC from any statutory farming protection

When a statute like AML 301 (2) provides a list of items associated as a group, in this case that group is crops, basic principles of statutory construction dictate that what’s not included is deemed to be excluded.

The list of defined crops at AML 301 (2) is long and includes most crops one would farm. That alone could cause the omission of cannabis sativa from this list to be deemed excluded under rules of statutory interpretation. But given the fact that cannabis sativa is included on that list, so long as the plant contains no more than .3% THC, the conclusion that cannabis sativa with more than .3% THC is not to be considered an agricultural crop as defined by the AML, is compelled.

The maxim expressio unius est exclusio alterius[xiv] (the inclusion of one is the exclusion of others) would apply to understand the legislature as having intentionally excluded cannabis sativa with more than .3% THC as an agricultural crop. Even the US Supreme Court[xv] has ruled that in this situation rules of construction would interpret the omission as intentional:

“The canon expressio unius est exclusion alterius does not apply to every statutory listing or grouping, it has force only when the items expressed are members of an associated group or series, justifying the inference that items not mentioned were excluded by deliberate choice, not inadvertence.”

If cannabis sativa with more than .3% THC is effectively excluded as an agricultural crop, this renders the protections of AML 305-a unavailable to cannabis farmers. With NYS’s goals to reduce greenhouse emissions from major sources to zero by 2050 and increase the use of energy from renewable sources,[xvi] it would be remarkable to exclude the only type of cannabis cultivation that is not harmful to the environment and in fact actually reduces carbon emissions.

Learning from the mistakes of our post-prohibition neighbors: Cannabis needs to be protected as an agricultural crop

The failure to recognize cannabis as an agricultural crop and cannabis farming as a protected agricultural activity created enormous problems for farmers in Massachusetts as one after the other local zoning board prevented farmers from participating in this new industry. This unfortunate trend of local zoning boards excluding farmers from the opportunity to farm cannabis has caused the Massachusetts legislature[xvii] to have to go back and seek to do that which we’re trying to get NY to do right in this bill, include cannabis as part of the AML.

We are also aware of problems some cannabis farmers in California[xviii] have had from neighbors complaining about the smell of the crop in the final weeks (a smell that unlike pesticide and fungicide odors is not harmful and to many not unpleasant). The inclusion of cannabis sativa hemp in the Agriculture and Markets Law would protect New York’s hemp farmers from these types of nuisance lawsuits as hemp cannabis sativa also becomes more pungent in the final weeks before harvest. But without the AML’s being amended to include cannabis sativa that has more than .3% THC, cannabis farmers would be without the same protections afforded by the right-to-farm law (AML 305-a). There is no rational reason to exclude cannabis farmers from the statutory protection afforded hemp farmers growing the same crop with the same issues. In fact, because of the prejudices and misdirected fears that surround THC, cannabis farmers require even greater protection.

Accordingly, AML section 301(2) must be amended by adding all cannabis sativa to the definition of crops and seeds, not just the cannabis sativa with less than .3% THC, as well as amending that portion of section 301(11) defining “farm operations” to include all operations relevant to the farming and production of cannabis. Accordingly, we propose adding this new section to the MRTA:

Section 301 (2) of the Agriculture and Markets law is amended to read as follows:

AML § 301 (2). “Crops, livestock and livestock products” shall include but not be limited to the following:

a. Field crops, including corn, wheat, oats, rye, barley, hay, potatoes and dry beans.

b. Fruits, including apples, peaches, grapes, cherries and berries.

c. Vegetables, including tomatoes, snap beans, cabbage, carrots, beets and onions.

d. Horticultural specialties, including nursery stock, ornamental shrubs, ornamental trees and flowers.

e. Livestock and livestock products, including cattle, sheep, hogs, goats, horses, poultry, ratites, such as ostriches, emus, rheas and kiwis, farmed deer, farmed buffalo, fur bearing animals, wool bearing animals, such as alpacas and llamas, milk, eggs and furs.

f. Maple sap.

g. Christmas trees derived from a managed Christmas tree operation whether dug for transplanting or cut from the stump.

h. Aquaculture products, including fish, fish products, water plants and shellfish.

i. Woody biomass, which means short rotation woody crops raised for bioenergy, and shall not include farm woodland.

j. Apiary products, including honey, beeswax, royal jelly, bee pollen, propolis, package bees, nucs and queens. For the purposes of this paragraph, “nucs” shall mean small honey bee colonies created from larger colonies including the nuc box, which is a smaller version of a beehive, designed to hold up to five frames from an existing colony.

k. Actively managed log-grown woodland mushrooms.

l. Industrial hemp as defined in section five hundred five of this chapter.

m. Cannabis Sativa, as defined in the Marijuana Regulation and Taxation Act.

Section 301 (11) of the Agriculture and Markets law is amended to read as follows:

§ 301 (11). “Farm operation” means the land and on-farm buildings, equipment, manure processing and handling facilities, and practices which contribute to the production, preparation and marketing of crops, livestock and livestock products as a commercial enterprise, including a “commercial horse boarding operation” as defined in subdivision thirteen of this section, a “timber operation” as defined in subdivision fourteen of this section, “compost, mulch or other biomass crops” as defined in subdivision seventeen of this section and “commercial equine operation” as defined in subdivision eighteen of this section, cannabis craft farm operations as licensed pursuant to the Marijuana Regulation and Taxation Act section. Such farm operation may consist of one or more parcels of owned or rented land, which parcels may be contiguous or noncontiguous to each other.

Zoning immunity for farmers in Agricultural Districts

Supporting a new cannabis craft industry for New York deserves at least the same level of statutory zoning protection that the legislature has provided for, inter alia, casinos, oil and gas drilling, residential day care, hazardous waste facilities, and other less popular industries. What we’re asking for in the MRTA isn’t extraordinary in the way some of those prior exemptions were. We must protect small farmers ability to grow and process this crop as if it were barley or grapes or hemp, by having the new statute make it clear that the state no longer considers cannabis to be a threat to the public’s health and safety, thereby preventing local planning boards from interfering with farmers growing this crop as they would any other crop. We want cannabis farms and agritourism to prosper the way vineyards and craft breweries have, but because of the misconceptions about cannabis we need the additional statutory protection.

Learning from the experiences of local farmers in Massachusetts who have been excluded from growing by local zoning boards that are either refusing to permit cannabis growing in their district or relegating it into industrial areas (where farms are not located), it is imperative that the MRTA expressly provide zoning immunity for growers who are already in agricultural districts.

The right to farm protections alone are insufficient. While AML sec 305-a does prohibit local governments from unreasonably restricting farm operations within an agricultural district, there is that wiggle room in the law which permits local municipalities to exclude certain farming operations if “it can be shown that the public health or safety is threatened.” It is because we have all been misled to believe that cannabis is so dangerous as to have been classified along with heroin, that local zoning boards could conceivably exclude cannabis farming as a public health or safety risk.

In seeking this statutory protection, we are merely asking for what we’re legally entitled to, but is necessary to expressly prescribe in order to avoid farmers being tied up for years with local planning boards. To put farmers in this situation will so seriously undermine their ability to compete in this market as to effectively eliminate their participation in the new industry being created by this bill. As explained in a volume of the NY Zoning Law & Practice Report (hereinafter the Report),[xix] the state’s use of statutory zoning immunity is well-founded and typically applied where an activity is expected to be met with local resistance:

Zoning immunity or preemption involves a determination that certain types of land uses may be exempt or “immune” from complying with local zoning and land use laws. The application of zoning immunity is deeply rooted in fundamental land use principles which provide that certain types of uses—both public and private—should not be restricted by local zoning and land use requirements because they are ... inherently beneficial to the public’s health, safety and welfare; or are solely within the purview of the federal and state governments. Notwithstanding these principles, unwary land-use practitioners and municipal boards continue to unnecessarily subject immune uses to local zoning laws thereby creating unnecessary delays in the development of these uses, unnecessary waste of municipal resources and unnecessary increases in the costs to taxpayers.

As the Report explains, there are 3 types of zoning immunity in NYS. We are focusing on statutory immunity which can only be granted through a state statute. The immunity protection language needs to be expressly included in the MRTA.

Examples of specific uses where NY has expressly preempted local zoning by statute include (i) electric generating facilities; (ii) hazardous waste facilities; (iii) residential day cares; (iv) casinos; (v) mines; and (vi) oil and gas drilling. In the case of electric generating facilities, the statutory immunity language was found in the Public Services Law; hazardous waste facilities exemption was part of the NYS Environmental Conservation Law; residential day care was in the Social Services Law. The statutory exemption for casinos was part of the new law that created casinos, the NY Gaming Economic Development Act.

Accordingly, we have included zoning immunity language to be part of the MRTA as follows, to be included at MRTA § 132. 2. (a)

Notwithstanding any inconsistent provision of law, cannabis farming and cannabis farm operations, on land located within an agricultural district, shall be deemed an approved activity under the relevant city, county, town, or village land use or zoning ordinances, rules, or regulations, inclusive of all necessary ancillary ‘farm operations’ as permitted by license pursuant to this law. The farming of cannabis grown outdoors pursuant to regenerative farming practices is in the best interests of the public’s health, safety and welfare, in accordance with the security precautions provided in these regulations. It is the intention of this legislation to promote and encourage full participation in the regulated cannabis industry by small farmers and craft growers.

It should be the policy of this state to inspire the greatest number of small regenerative growers into this regulated market by making farm-based licenses - particularly for

women, people of color and equity applicant s- available to all qualified applicants

All of our proposed craft and farm-based licenses contribute to the diversification and expansion of New York’s rural economies and to the strength of agricultural communities. Given that all the farm-based licenses we’ve proposed will be limited in size and more accessible to ordinary New Yorkers, the more of these licenses the state grants the better for New York. Like microbusinesses, already part of the MRTA, which are also limited in size, these smaller business opportunities create the potential for more diversity in the industry.

Unlike the larger-scale indoor cultivator licenses that should be restricted, so as to prevent the creation of too-big-to-compete with players as well as limit the environmental harm caused by indoor cultivation, there should be no limit on the number of craft cultivator, farm cooperative, or farm cannabisery licenses the state can issue. Aside from the fairness of diversifying this industry, our planet is in crisis so of course the state would want to support farmers who are actively helping to heal our planet. Indeed, it should be the policy of this state to encourage the greatest number of small regenerative growers to be brought into this regulated market, with priority given to women, people of color and equity applicants.

Similarly, there should be no limit to the number of members who can participate in a farm-based cooperative. Since all members of a cooperative will be small farmers or craft cultivators whose production is limited by their license, there should be no limit on the number of members who can participate as members or on the collective amount of growing space of the farm-based cooperative. Imposing a limit on the size of a cooperative would be inconsistent with what should be New York State’s policy to both consciously create good jobs for the greatest number of New Yorkers, regardless of their income levels or access to venture capital, as well as to encourage the production of regeneratively grown cannabis. We want as many small farmers’ participation in this craft farm industry as we can support.

It would be inconsistent with this goal were the state to limit the size of a farm-based cooperative to the size of the largest industrial grower because these licenses represent two opposing models. If the state were to cap the size of the largest cultivation at say 100,000 square feet (as Massachusetts has done), a single licensee would realize all of that profit from that grow. A 500,000 square foot grow with such a 100,000 SF cap would see profit for perhaps 5 individual licensees (assuming for the example a maximum tier of 100,000 SF). But one licensed farm-based cooperative that has enough members such that its accumulated growing area is equivalent to 500,000 square feet, represents shared profits not for merely 5 individuals, but for perhaps 100 farmers (assuming for this example each small farmer had a license to grow at the middle tier of 5,000 square feet). Not only do small farm growers share and distribute the wealth in the structure we’ve created, but the difference between indoor cultivation and regenerative outdoor cultivation is quite literally the survival of the planet.

Accordingly, we propose amending the MRTA at § 65. 3 as follows:

3. The office shall have the authority to limit, by canopy, plant count, square footage or other means, the amount of cannabis allowed to be grown, processed, distributed or sold by a licensee. The office will prioritize small farm growing applications over indoor cultivation applications and ensure that at least 51% of the cannabis in NYS is produced by craft cultivators and cannabiseries and microbusinesses employing carbon conscious practices. The office may issue a limited number of licenses for large indoor production, but there shall be no limit on the number of licenses to be issued for the small craft farm licenses. The bureau shall prioritize licenses to be issued to people of color, women and equity applicants, ensuring at least 51% of all licenses are awarded to women, people of color and equity applicants.

Investing in New York’s future: Accelerator Resource Hubs: A seed to sale equitable supply chain

New York has a once-in-a-century opportunity to direct billions of dollars towards the revitalization of rural and urban communities across the state. As the state prepares to open the post-prohibition door to well-capitalized existing cannabusinesses, we are urging the state to keep some of those billions of dollars projected to be realized annually, in the state working for New Yorkers. We recognize that regular New Yorkers will not be able to compete in this industry without the state’s direct support, but that were the state to invest in its citizens, that money - which will otherwise be leaving the state by way of profits benefiting only the large canna industries - will be financing jobs and businesses, regenerating New York’s communities in a way we’ve never been able to finance, until now.

It is only fitting that the state makes this investment in our future. Those billions of dollars will be coming from New Yorkers and if New Yorkers were asked, we all know they’d vote to have their money spent on healthy, regeneratively grown, pesticide-free, cannabis processed and distributed through small local businesses. What we’re proposing is unique in that it is beyond what the state has done historically. We are asking the state to partner with its citizens, creating a socio-economic accelerator program, financing our own vertically integrated cannabusinesses, where profits will be shared among farmers, small businesses, ordinary New Yorkers in rural and urban communities. The state itself will share in this profit-making endeavor.

The Accelerator Resource Hubs would be charged with the goals of increasing the success rates and viability of small business enterprises and positioning them to exceed the five-year mark. To this end, New York State may offer non-extractive finance and custom-tailored business support with confidence in the promise of a multi-faceted return on investment. These Accelerator Resource Hubs would provide workshops, create strains that are acclimatized to New York’s environment and develop the New York regenerative brand of farm-grown cannabis that will make New York not only the world’s #1 consumer in the world, but the #1 producer of the purest, healthiest, artisanal cannabis strains available.

This industry is more complicated than most due to the excessive regulations required, the infancy of the industry and the fact that federal funds and other federally related issues create major obstacles. While the state can scale licensing activities and fees, restrict vertical integration for industrial players, create microlicenses and prioritize certain applicants, this is insufficient for this particular industry. The high risk associated with starting a cannabis business; the limited options for securing finances given the federal government’s position; the further limitations on access to capital for people without collateral; the lack of access to insurance; the cost-prohibitive nature of operating a regulation-compliant business all demand that the state responds with a novel approach, more robust than it has done historically with incubator models.

Applicants for employment in one of the State’s Resource Hubs would be required to satisfy licensing criteria in one or more of the licensed categories, but the fees associated with permitting and licensing would be deferred until after the cooperative was financially viable and able to afford those fees. Priority would be given to people of color, women and equity applicants, with at least 51% of licenses reserved for these groups of people who apply to participate in these Accelerator Resource Hubs. Through the defined incubation period equity would be allocated to members, effectively fortifying the function and formation of worker cooperatives. And the state will recoup its expenses and a small amount of interest. The State would ultimately sell these accelerators to their members at which point they’d become independent worker run cooperatives.

Resource Hubs wouldn’t be one place, but a socially equitable supply chain. The state’s objective should be to help ensure the success of these accelerator cooperatives so that these Accelerator Resource Hubs become a source of growing employment for the community and the state. We want the MRTA to direct that the regulations prioritize the creation of living wage, long-term jobs with benefits in our regional communities, starting with our farming communities and extending to our urban communities, ensuring a New York-based supply chain from seed to sale. This is how we spread the economic wealth. That is surely worth the state’s incentivizing.

Conclusion

Looking to our farming communities to produce the maximum amount of cannabis for New York is an opportunity to change both the business culture as well as the agriculture, setting a new standard for farming as a means of reversing global warming. New York has the opportunity to be the state that leads the way, recognizing its responsibility not merely to regulate the economic potential of this plant, but to model a regenerative form of agriculture that eschews fossil fuels in the form of synthetic pesticides or energy in favor of the sun and other renewable sources, while prioritizing people’s need over corporate greed.

[i] http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.396.4759&rep=rep1&type=pdf

[ii] The carbon footprint of indoor Cannabis production, http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.396.4759&rep=rep1&type=pdf

[iii] IWS Collaborating with Cannabis Cultivation Facility, http://www.marketwired.com/press-release/iws-collaborating-with-cannabis-cultivation-facility-cse-iws-2200062.htm

[iv] Another energy study in California found 3 percent of the electricity used in California went for raising cannabis. https://sites.google.com/site/millsenergyassociates/topics/energy-efficiency/energy-up-in-smoke

[v] A Chronic Problem: Taming Energy Costs and Impacts from Marijuana Cultivation,

http://eq-research.com/wp-content/uploads/2016/09/A-Chronic-Problem.pdf

[vi] https://assembly.state.ny.us/leg/?default_fld=&bn=A3281&term=&Memo=Y

[vii] https://davidsuzuki.org/queen-of-green/food-climate-change/

[viii] https://www.epa.gov/minimum-risk-pesticides/minimum-risk-pesticide-definition-and-product-confirmation#whatis

[ix] MRTA § 81. Provisions governing the cultivation and processing of adult-use cannabis.

4. Cultivators of adult-use cannabis shall only use pesticides that are registered by the department of environmental conservation or that specifically meet the United States environmental protection agency registration exemption criteria for minimum risk pesticides, and only in compliance with regulations, standards and guidelines issued by the department of environmental conservation.

[x] A Vision for Rural New York, https://cardi.cals.cornell.edu/sites/cardi.cals.cornell.edu/files/shared/documents/RED/rvp-summary_report.pdf

[xi] The benefit corporation law allows for the creation of a new and voluntary corporate entity that will allow businesses to consider profit as well as society and the environment. This form of incorporation allows a business to balance fiduciary duty between its shareholders and stakeholders. https://benefitcorp.net/sites/default/files/documents/New_York_Benefit_Corp_How-To_Guide.pdf

A benefits corporation should not be confused with a B Corp. The B Corp certification is a valuable branding tool for businesses, but is not a legal form. The benefits corporation we have proposed, permits the corporate entity to consider profit as well as society and the environment. This form of incorporation allows a business to balance fiduciary duty between its shareholders and stakeholders.

[xii] New York’s Department of Agriculture and Markets, Guidelines for Review of Local Laws That Define “Farm Operations”, “Farm”, “Agriculture”, “Farmland” or Any Similar Term, https://www.agriculture.ny.gov/AP/agservices/guidancedocuments/AgGuideline-FarmOperation.pdf

[xiii]AML §305-a contains the following mandate:

Local governments, when exercising their powers to enact and administer comprehensive plans and local laws, ordinances, rules or regulations, shall exercise these powers in such manner as may realize the policy and goals set forth in [AML Article 25-AA], and shall not unreasonably restrict or regulate farm operations within agricultural districts in contravention of the purposes of this article unless it can be shown that the public health or safety is threatened.

[xiv] See McKinney's Cons Laws of NY, Book 1, Statutes § 240, at 412-413 "where a statute creates provisos or exceptions as to certain matters the inclusion of such provisos or exceptions is generally considered to deny the existence of others not mentioned".

[xv] Barnhart v. Peabody Coal (Scotus 2003)

[xvi] NYS Climate and Community Protection Act

https://www.nysenate.gov/legislation/bills/2017/a8270/amendment/b

https://www.nysenate.gov/legislation/bills/2017/s7971

[xvii] Currently there is a bill before the legislature seeking to amend Massachusetts’ definitional statute to expressly include cannabis within the statute that describes other farming or agriculture activities. As we contribute to the legislation being proposed in NY, this is the time to learn from the experiences of other states.

https://www.nofamass.org/content/legislative-priorities#cannabisfarming

Cannabis farming is farming!

Bill number(s): HD.1271

Bill title: “An Act clarifying the definition of agriculture”

What does this bill do?

This simple legislative fix would clarify the definition of agriculture to include "hemp and marihuana."

HD.1271 - An Act clarifying the definition of agriculture

· The first paragraph of MGL 128 Section 1a shall be amended to include the phrase “the growing and cultivation of both hemp and marihuana,” after the phrase “floricultural or horticultural commodities”

[xviii] In California, families have sued and complained about the smell of cannabis, although the article does not identify the size of the grows in the area. See What’s That Smell, https://www.nytimes.com/2018/12/19/us/california-today-marijuana-smell-lawsuit.html

[xix] NY Zoning Law & Practice Report (hereinafter The Report) describes in a volume entitled Zoning Immunity: What’s That?, https://www.woh.com/img/uploads/file/2NYZONING-R-4168282-FINAL.pdf

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