Government and Cannabis
Every state has had its share of bumps in attempting to create a new heavy-regulated industry while ensuring those screwed by the ridiculous war on drugs (mainlyly cannabis) can participate in this wild west.
There are countless bumps, most coming from antiquated laws. Lobbyists have come out with a full-court press; god forbid this business is run differently than those in the past. The 280E tax code essentially screws anyone attempting to build a retail establishment. Now the UN wants to force states to repeal legislation to comply with a six-decade-old treaty. Good luck with that one.
Everyone saw this one coming. New York State is being sued, again, for their rolling out of the cannabis industry. A coalition of MSOs (Multiple State Operators) have sued NY State for “alleges unconstitutional overreach and policymaking, egregious abdication of duties, and actions that put New Yorkers’ health and safety at risk.” Essentially, they are pissed about how long it has taken them to apply for a license because all of the licenses have gone to previously incarcerated people and non-profit organizations that help previously incarcerated people reenter society.
I applaud what NY State has tried to do. Our store, Gotham, partnered with Strive; they own 51% of the business. We could afford that, and I am thrilled to do it because we planned on giving back to Strive (and other organizations )with a large piece of the profits from this business. A piece of every cannabis business should be required to give back to impact change.
The issue is that the people who have been issued the licenses are not adequatelyly funded, and many real estate operators are not interested in renting to cannabis stores. However, that doesn’t appear to be the case when thousands of illegal operators exist throughout the state. It has been announced that the state is coming after them, including the landlords who have leased property to illicit storefronts. Lets hope.
NY State has set aside a pool of capital for those dispensary licensees, but it is only enough to help 20 dispensaries at most. Without speeding up the process, the loss of taxes to the state (almost $3b in the next eight years) and job opportunities.
NY State should open the application process again to anyone except MSOs. Let small businesses flourish. If you are awarded a license, 5% of your profits must go back to organizations such as Strive, which will be overseen by a group of non-Government individuals to ensure the money is going to the right place. Rally the rest of all the other states that now have dispensaries (medical and consumer) and together sue the Federal Government to change the tax and banking laws so these businesses can grow. Allow the MSOs to apply a year after this next round is complete. And most important, make sure to close down the illegal dispensaries that are untaxed and grab more market share every single day.
Cannabis will be a win for NY State, but it is time to make new decisions. Going back to the well and giving out more licenses to the same pool of applicants is not the answer. We need stores to open sooner and create taxes for the state unless the pool of capital for all of them grows exponentially now. If the Federal Government legalizes cannabis, the room for investment will change the game. Few people want to put their capital in, but the reality is they are all dying to.