High hopes for legalizing marijuana in New York dissipated Wednesday, but pushes to decriminalize the drug and expand the state’s restrictive medical program remained alive.

Sen. Liz Krueger (D-Manhattan), sponsor of a bill that would permit the sale, possession and use of marijuana for people ages 21 and older, announced Wednesday morning that Senate discussions over how to fully legalize the drug had stalled. The stumbling block: how to distribute tax proceeds.

“This is not the end of the road, it is only a delay,” Krueger said in a statement. “We came very close to crossing the finish line, but we ran out of time.”

The discussions collapsed late Tuesday night following a frantic effort by legislators and supporters to sway a block of holdout Senate Democrats from Long Island and two from New York City, by amending the proposal to make it more palatable, according to people familiar with the plan.

With the legislative session scheduled to end this week, lawmakers and Gov. Andrew Cuomo have run out of time to reach an agreement over how to parcel out tax revenues from marijuana sales, according to legislative sources.

Assemblymember Crystal Peoples-Stokes (D-Buffalo), who shepherded the bill in the Assembly, wanted a portion of the revenue go to minority communities, which have been disproportionately affected by aggressive prosecution of drug laws.

‘Time to Act is Now’

Cuomo signaled in a statement Wednesday morning that he sees promise in a decriminalization compromise. “This legislative proposal is not new,” he said. “I first proposed this decriminalization measure in 2013, and again in this year’s budget. The time to act is now.”

With legalization unlikely, lawmakers are discussing alternative measures to blunt the impact of law enforcement on people caught with weed.

One would further decriminalize marijuana possession and establish a process for expunging certain pot-related misdemeanor convictions from criminal records. A second would expand the state’s highly restrictive medical marijuana program, a fallback plan that’s been waiting in the wings. Another bill would allow hemp to be grown for commercial use.

All of the measures are “very much on the agenda,” Assemblymember Dick Gottfried (D-Manhattan), chair of the Assembly Health Committee, told THE CITY.

“On the medical piece, there is wide consensus on the need for additional qualifying conditions, better geographic access, and a more functional business market,” said Gottfried, one of the architects of the medical marijuana program first approved in 2014.

Many patients have complained that the limited number of dispensaries currently licensed by the state, just 40, are too difficult to access. Staten Island, which has 2,500 patients authorized for medical marijuana prescriptions, has yet to see its first facility open.

Bills’ Fates Unclear

“It will be a great loss if the larger adult use bill fails,” Gottfried added, “but we can do a lot of good in the next day or two with these stand-alone pieces.”

But the Plan B package faces its own challenges. One Assembly source familiar with the discussions said it seemed unlikely the chamber would tackle the medical marijuana expansion or the hemp regulations, but was significantly more hopeful on decriminalization efforts.

“I would think that we would still look to do decriminalization, at the very least,” said Assembly Speaker Carl Heastie (D-Bronx), who said he was “not sure” about the two other bills.

Sen. Gustavo Rivera (D-Bronx), who heads the Senate health committee, seemed optimistic about the medical bill being brought to a vote in his chamber.

“I think we have to do it and I think we have a very good shot at doing it,” Rivera told THE CITY.

In the Senate, lawmakers haven’t committed to passing the marijuana decriminalization bill introduced by Sen. Jamaal Bailey (D-Bronx), which would replace criminal charges for small amounts of marijuana with violations. Low-level convictions would also be expunged.

“We are trying to figure some things out,” Bailey told reporters.

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