Yesterday New York’s cannabis authority voted through regulation which will now allow large medical cannabis operators to enter the market, in a controversial yet ‘pivotal’ move.
This has once again brought major change to those hoping to operate in the nascent legal cannabis market, which is expected to become one of the country’s largest.
We spoke to, Michael Zaytsev, the Academic Director of LIM College’s Business of Cannabis Degree Programs, and author of The Cannabis Business Book, to get his take on where the market is, and where it is headed.
(This interview was conducted before yesterday’s OCM meeting)
Business of Cannabis: New York on November 3 will explore the current cannabis retail and licensing infrastructure in New York. Early Bird Tickets are available until midnight on September 8. Get yours here: www.cannabisnewyork.live.
With a further 212 CAURD licenses now granted, does this finally represent the acceleration many have been hoping for?
It did, until litigation derailed everything. Unfortunately, the state of the NY market right now is one of frustration. Many, especially the CAURD license recipients who have received licenses but are enjoined from opening, are discouraged.
There has been harsh criticism of the rollout and how the state has handled things. While these perspectives are valid and the delay is especially costly to those CAURD licenses who are now stuck in limbo, it’s important to understand that none of these new developments were surprising to the people who have been in this market and industry for a long time.
Any time a state attempts anything novel, like New York has, there are bound to be hiccups, growing pains, and roadblocks. It’s likely that this won’t be the last bump in the road. However, over time it will get figured out and the market will open and become robust.
Are there any other initiatives being brought in imminently which are designed to help speed up the roll out of legal stores in the state? Which potential barriers are still left to overcome?
The OCM is planning on opening up the applications for the next round of licenses in October. This represents the next phase of adult use implementation in New York. Along with opening the door for hundreds of new cannabis businesses, this will also open the door to new cannabis license types.
The cannabis microbusiness license and the cannabis research license, in particular, will create a whole new dynamic in New York where small businesses and innovation are supported and encouraged. While this is exciting and will help the New York market develop, there are currently significant barriers that will continue to make things challenging.
Specifically, I’m referring to the lawsuit that is preventing CAURD licenses from opening up their stores and getting a chance at the head start and opportunity they were promised.
Besides that, is the massive challenge of thousands of unlicensed stores selling untested products and not paying taxes or following regulations. Every day there are new unlicensed stores popping up in New York City and across the state. This will be a big barrier for the regulated market to overcome.
It feels like momentum is also finally gathering with regards to the crackdown on grey market operators. Is that something that will continue to gather pace?
I don’t want to speculate, but I suspect that eventually there will be more enforcement action against grey market operators.
It doesn’t seem like the state is interested in creating pathways for these unlicensed operators to transition towards being regulated. Nor does it seem like most of these operators are interested in being regulated and taxed. Therefore, this problem will likely persist indefinitely, unless the State figures out an innovative and integrative solution.
Some have argued that the state’s lofty and admirable social equity goals have slowed the roll out, do you feel the benefits of these ambitions outweigh the drawbacks?
That is a short sighted and silly argument in my opinion. The fact of the matter is, it’s a massive undertaking to create a regulatory framework for an adult use cannabis market. It’s exceptionally difficult to do so in one of the largest markets in the world.
While the state could have done a better job with the rollout, hindsight is always 20/20. To blame the problems with the roll out on social equity goals is unfair and unproductive. Let’s applaud the state for prioritising equity.
Personally, I think they could and should have gone even further in centring and promoting equity. Sometimes, though, the road to hell is paved with good intentions.
While it was admirable to strive towards equity and justice in such a meaningful way, obviously the implementation has left a lot to be desired. Rather than becoming hung up on what could have been done differently or better, we need to focus on how we can best promote and facilitate equity given where and how things stand today.
What are your predictions for the state’s legal cannabis market over the next 12 months?
Hopefully, a year from now the New York market will live up to its promise of becoming the most exciting, fastest growing legal cannabis market in the world. There will be thousands of new jobs and businesses created by legal cannabis in New York.
If there are no further roadblocks, delays, lawsuits, then we’ll have a thriving market where consumers have access to a diverse array of affordable, safe, tested products and where tax revenues from cannabis sales are contributing towards community reinvestment and repairing the harms caused by the war on drugs.