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The legal market for cannabis in New York is still months away – and uncertainty still surrounds the budding industry.
How it will operate still isn’t certain. Who the players will be still is an open question. And how consumers will respond to it, despite robust expectations, still is unknown.
But that isn’t stopping local entrepreneurs – from mom-and-pop stores to farmers – from taking steps to get ready for the legalized marketplace – whatever it may look like.
Some of those players, along with industry experts, gathered at the University at Buffalo on Thursday for a symposium on the legalized cannabis market. Here are five takeaways.
Much is still murky
The list of local Western New York farmers licensed to grow the first batches of legal recreational cannabis in New York is growing.
Hopeful operators are hungry for answers, but answers are hard to come by. Even those experts in the most in the know don’t have all the answers – largely because so much is still up in the air and answers don’t exist yet.
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Such are the pitfalls of building a brand-new industry from scratch.
“There’s a lack of clarity in the regulations. We don’t know what to do and we’re struggling to understand,” said Reggie Keith, owner of Canna-House, a cannabis social club on Chandler Street.
It’s something the state is working on, but it could be a while. Legal sales could begin by the end of the year.
“We’re trying to cut through the bureaucracy,” said Chris Alexander, executive director of the State Office of Cannabis Management.
There will be an influx of jobs. But how many?
Todd Giolando – at Three Cord Ranch, his small family farm in Derby – is among the first 200 New York farmers growing recreational marijuana.
Licensed growers are already looking for labor and facing the same shortage experienced by every other industry. More jobs will open up as more operators become licensed and as retail operations come online.
Though colleges do offer courses on the different aspects of cannabis production, the industry is brand new – so experience in legal marijuana operations will be hard to come by.
That means many operators will be looking for people with skills that relate to the industry (non-cannabis farming, for example) and those who had knowledge of the product before it was legal, but don’t necessarily have a formal education.
“The way I would look at it is, what knowledge and transferable skills do you have now and where can you apply that in the current industry, and what lane will be most in alignment with what you want to do?” said Nhi Kha, founder of hemp dispensary Sativa Remedy in the City of Tonawanda.
The jobs may pay better than other entry-level occupations, since every licensed operator in New York is required to have a labor peace agreement in place with a union.
Gray-space operators are likely setting themselves up for disappointment
Hopeful operators are commonly but, regulators say, erroneously told to get their grow and retail operations set up before they receive their licenses, in order to hit the ground running.
There are stores in New York that sell cannabis products already, and every one of them is illegal, Alexander said. And operating in that legal gray area is putting their hoped-for license in jeopardy.
“You are not putting yourself into a good position to be viewed as a respectable operator by breaking the law before you even start the program,” Alexander said. “You think this is giving you an advantage and it’s not. It’s cutting out the government.”
As legal sales get closer, the state will crack down more on illegal ones.
“It’s the only way to move people into that legal space,” said Aleece Burgio, general counsel and strategic advisor to greenhouse consultant MJI Solutions.
Local growers have a two-year head start
A big fear among mom-and-pop operators is that large out-of-state operations will flood the market and gobble up business, wiping out smaller businesses.
It has happened in other states and that’s a fear among lawmakers, as well. That’s why the state has required that initial licenses go to New York-based businesses and that out-of-state companies are prohibited from entering the market at first.
“It’s important to manage the out-of-state companies because they’re coming from all over,” said Assembly Majority Leader Crystal Peoples-Stokes. “They gotta wait. New York was here first.”
Social justice is a key component
New York is gearing up to start the application process for the first recreational cannabis dispensary licenses, which will be awarded to residents who have been impacted by a marijuana-related criminal conviction.
Peoples-Stokes said the bill to legalize cannabis was written in such a way to that it would help restore communities of color and those harmed most by the war on drugs, which disproportionately incarcerated people of color and those living in poverty.
Taxes on cannabis sales are expected to raise roughly $300 million per year, and those funds are slated to go toward community reinvestment programs, education and drug treatment.
When choosing operators to license, the state is giving priority to those who have prior drug convictions or legal involvement, or who have family members who faced legal involvement because of cannabis.
“The people who suffered the most have to gain the most,” Peoples-Stokes said.