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A 10601

Establishes a low potency cannabis beverage retail permit

2025 Regular Session Introduced by Al Stirpe

Creates a separate Low Potency Cannabis Beverage Retail Permit for off-premises sale of LPCBs (≤5 mg THC) at liquor stores, with tax, tracking, and cross-agency rules.

REFERRED TO ECONOMIC DEVELOPMENT
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Bill Summary · A 10601

Summary: Bill A.10601 (2025-2026) – Establishes a Low Potency Cannabis Beverage Retail Permit

Jurisdiction: New York
Session: 2025-2026
Introduced: March 13, 2026 (Sponsor: Assembly Member Stirpe)

Purpose and overall objective
- Create a regulatory framework for the sale of low potency cannabis beverages (LPCBs) at retail, separate from conventional alcoholic beverages.
- Allow liquor-off-premises retailers to obtain a dedicated LPCB retail permit and sell LPCBs for off-premises consumption.
- Integrate LPCBs into New York’s existing cannabis and alcohol regulatory structures, with specific licensing, taxation, enforcement, and revenue-sharing provisions.

Key provisions and changes

1) Definitions
- Adds a new definition: “Low potency cannabis beverage” means a single-use beverage container containing no more than 5 milligrams of total THC.

2) Cannabis law amendments (licensing structure)
- Expands distributor and retail licensing framework to accommodate LPCBs, while aligning with existing adult-use cannabis operators.
- Retail cannabis dispensary licenses remain the primary avenue for cannabis sale; LPCBs are introduced under a separate, beverage-specific permit issued under the alcohol control framework.

3) Alcoholic Beverage Control (ABC) law changes
- Establishes a new Low Potency Cannabis Beverage Retail Permit under the ABC law.
- Permittee: Holder of a license to sell liquor at retail for off-premises consumption (i.e., typical liquor store or similar off-premises license).
- Authorization: Sell LPCBs at retail for off-premises consumption.
- License term and renewal: Permit runs concurrently with the underlying liquor license and renews on the same schedule.
- Interplay with underlying license: Revocation/suspension/cancellation of the underlying liquor license automatically affects the LPCB permit.
- On-premises separation: LPCBs must be maintained in a separate, clearly marked area from alcoholic beverages.
- Recordkeeping: Permittees must maintain inventory records of LPCBs using a software system designated by the Office of Cannabis Management (OCM).
- Enforcement: ABC and OCM will coordinate inspections and enforcement via a memorandum of understanding.

4) Age and compliance
- Age restrictions: No LPCB sale to individuals under 21; an affirmative defense is allowed if valid government-issued ID is presented and relied upon in good faith.
- Age-related penalties: Violations treated as violations of the underlying license, influencing license revocation/suspension procedures.

5) Taxation and revenue allocation
- Adds a three-tiered tax regime for LPCBs:
- Distributor-to-retailer transfer tax on LPCBs: 9% of the amount charged.
- Retail sale tax to consumer: 13% of the sale price.
- Initial 4% tax to local municipalities where the sale occurs.
- 2% of the 13% to the Cannabis Revenue Fund for small business loans, grants, and technical assistance (targeting social/economic equity applicants) via the OCM.
- 2% to the Cannabis Revenue Fund for trade practice oversight and illicit-sale enforcement.
- 4% to the New York State Cannabis Revenue Fund for general purposes.
- 1% of the 13% to the State Liquor Authority for implementation, administration, and enforcement costs.

6) State finance and fund distribution
- 3-a subdivision to the State Finance Law sets:
- 1% to the State Liquor Authority (implementation/administration/enforcement)
- 2% to Cannabis Revenue Fund for small business support
- 2% to Cannabis Revenue Fund for enforcement against illicit sales/trade practices
- 4% to local municipality hosting the sale
- 4% to the New York State Cannabis Revenue Fund for general purposes
- Existing fund governance (e.g., remaining fund distributions) remains as established, with specified reallocation under the new subdivision 3-a.

7) Effective date
- The act takes effect 180 days after it becomes law.
- Immediate authority for rulemaking and related actions necessary to implement the act may be exercised before the effective date.

Who is affected

  • Liquor off-premises retailers: May apply for and operate a Low Potency Cannabis Beverage Retail Permit.
  • Licensed retailers: Must ensure LPCBs are stocked, segregated, and tracked in inventory systems; must adhere to required signage and separation from alcoholic beverages.
  • Office of Cannabis Management (OCM) and State Liquor Authority (SLA): Joint enforcement and oversight, including cost allocations and interagency coordination.
  • Local governments: Receive a portion of LPCB tax revenue (4%) to support local purposes.
  • Cannabis businesses and applicants: Eligible for targeted funding and technical assistance under the new fund allocations, supporting equity and small-business growth.

Effective impact and considerations

  • Introduces a separate retail channel for low potency cannabis consumables, aligning alcohol retail infrastructure with cannabis product distribution.
  • Establishes a robust tax framework with multiple earmarks to support administration, equity programs, enforcement, local revenue, and general cannabis funding.
  • Requires new inventory controls and cross-agency coordination to ensure compliance and age-verification integrity.
  • Creates potential interaction with existing cannabis licensing and opioid/treatment-related funds via the broader Cannabis Revenue Fund structure.

Note: This summary focuses on the bill’s substantive provisions, licensing structure, taxation, enforcement, and anticipated fiscal impacts as described in the bill text.

Compiled from official sources — confirm details with the bill’s official record.

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