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ALBANY — New York would become the first state in the nation to tax marijuana based on the potency of its THC — the psychoactive substance giving users their high — under Governor Andrew M. Cuomo's budget proposal.

The governor rolled out the new approach to taxing weed while the state struggles with an enormous budget gap.

But while pot legalization advocates back the push for a regulated marijuana market, Allan Gandelman, president of the New York Cannabis Growers and Processors Association, labeled the THC-based tax structure "rather bizarre."

Gandelman warned the proposal would leave New York with one of the highest marijuana taxes in the nation and set the stage for cost-conscious consumers to patronize black market dealers.

"Decreased taxation will mean increased legal sales, which will ultimately equal an increase in tax revenue," he said.

Marijuana sold in flower form, or buds, pre-rolled joints or loose weed known as shake would come with a wholesale tax of 0.7 cents per milligram of THC content. Concentrated cannabis oil products could be taxed at 1 cent per milligram of THC.

Under Cuomo's proposal, the tax on edibles and other cannabis-infused products would be even higher — 4 cents per milligram of THC.

"No other state has tried to do something like this," said Jordan Isenstadt, spokesman for the growers' group. "If you're buying vodka, you don't pay more money for a higher proof vodka."

The goal of the THC tax, said Freeman Klopott, spokesman for the governor's Division of the Budget, is to create "parity and consistency in the taxation of cannabis products."

"This approach builds off of the experiences of other jurisdictions which have used administratively burdensome and less precise mechanisms to tax THC concentration based on broad product categories," Klopott added.

The strategy advances an "accurate and regionally competitive cannabis tax" for New York that reflects "best practices" embraced by Illinois and Canada, he said.

Several states that have legalized marijuana have given residents the green light to cultivate a small number of plants for personal consumption. Cuomo has not embraced legal home-grown.

Competing legislation advanced by Sen. Liz Krueger, D-Manhattan, would let New Yorkers cultivate as many as six plants for their own use.

The governor's proposal drew a chilly reaction from another group that favors legalization, the New York chapter of the Drug Policy Alliance. Its director, Melissa Moore, argued it provides insufficient financial support for "community reinvestment" in neighborhoods "brutalized by the immoral war on drugs."

A final state budget is slated to be in place by April 1. Cuomo sought to legalize marijuana a year ago, but lawmakers ended up adopting a spending plan that shelved the measure.

Joe Mahoney covers the New York Statehouse for CNHI’s newspapers and websites. Reach him at jmahoney@cnhi.com.

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