Democratic Gov. Andrew Cuomo of New York presented his plan to legalize recreational marijuana in the state on Tuesday. The governor outlined highlights of his proposal in a written message that was distributed to lawmakers as part of his State of the State address.

Under Cuomo’s plan, a state Office of Cannabis Management would be created to regulate the recreational cannabis industry. The new agency would also be tasked with developing a plan to review and seal past convictions for marijuana offenses.

Cuomo’s plan would include licenses for cannabis cultivators, distributors, and retailers. Marijuana cultivators would not be allowed to own retail dispensaries. A twenty percent state tax and 2 percent local tax would be imposed on transactions from wholesalers to retailers and cultivators would be assessed taxes on a per-gram basis. The governor said that the tax rates of neighboring states were a factor in determining the rates for New York.

“The how is something that we’re talking about right now,” Cuomo said. “I think you have to look at New Jersey and you have to look at Massachusetts. They are natural competitors in the marketplace.”

State taxes in Massachusetts on recreational pot total 17 percent and local governments can add up to 3 percent more. New Jersey has not yet legalized recreational marijuana but is also developing a plan to do so.

Big Money in Pot Taxes

Cuomo said that projections show that up to $300 million dollars a year could be raised from taxes on legal cannabis. The legalization plan is part of the state budget, which earmarks those funds for regulatory costs, substance abuse prevention programs, a small business development plan, and traffic safety measures. The final budget is expected to be approved by the legislature before the start of the new fiscal year on April 1, giving a potential timeline for legislative action. Democratic lawmakers, who largely support cannabis legalization, now control both the state Senate and Assembly.

Sales of recreational marijuana would only be permitted to adults age 21 and over. Counties and cities would be permitted to prohibit pot sales within their jurisdictions.

Just two years ago, Cuomo referred to cannabis as a gateway drug but then changed his position during a primary challenge to his reelection in 2018. Cuomo was reelected in November and last month said he would make legalizing cannabis a priority of his new term. Since then, New York City Mayor Bill de Blasio has called for the state’s legalization plan to create an industry based on small businesses.

Kevin Sabet, the president of the anti-pot group Smart Approaches to Marijuana, said that legalizing cannabis does not generate the tax dollars anticipated and vowed that his group would oppose Cuomo’s plan.

“No matter how many states try, pot does not bring the promised ‘windfall’ of revenue,” said Sabet. “This fight is far from over. We will be making our voices heard.”