Member Blog: 5 Things You Need to Do Before You Launch Your Cannabusiness in New York
Cannabis was legalized in New York in 2021, and now the market is starting to fully open up for all types of cannabusinesses across the state. Despite a rocky start to rolling out new licenses, it’s almost time for the general public to dip their toes in and start their own dispensaries.
New York’s legal cannabis market is projected to be worth $4.2 billion by 2027, making it the country’s second-largest recreational cannabis state. It won’t be long before cannabis businesses have hundreds of locations across New York.
Curious about how to open a New York dispensary? Here are five things you need to do to get ready for your blossoming cannabusiness.
Conduct Market Research & Choose a Location
Since many cannabusinesses will be opening up in New York in the next few years, you need to ensure that yours is set up for success from the start. The best way to secure success is by selecting a high-demand area with minimal competition. You can identify lucrative locations by exploring different neighborhoods and conducting market research.
Visit prospective spots in person, instead of just looking at them on a map. You’ll get a much better sense of the feel of the area, the type of people walking through, the surrounding businesses, and more. And if feasible, talking to residents and local business owners will help you to really understand the market.
It is also important to be mindful of the New York zoning laws before securing a location. According to statewide zoning restrictions, a cannabis dispensary can’t be on the same road or within 500 feet of a school and 200 feet from a house of worship. Cities may have additional restrictions to limit the number of cannabis dispensaries in a certain location. Do your research before you get married to a location that won’t work out for logistical reasons.
Apply for a License
You’ll need a license to open a cannabusiness in the state of New York. However, as of October 2023, the path to applying and receiving a cannabis license in the state is a little up in the air.
When applications for the first licenses opened up, New York legislators wanted to ensure that people who were negatively impacted by the state’s previous criminalization of cannabis could apply first. This included people who were convicted of a cannabis offense in New York or were affected by a loved one’s conviction.
Now, starting on October 4, 2023, New York will start accepting license applications from a much broader pool of entrepreneurs. Applications are open to everyone over the age of 21 who does not already have three licenses. This is exciting news for many aspiring cannabusiness owners who were not eligible the first time around.
However, these licenses may not be issued as soon as prospective owners hope. When the state legalized cannabis, its goal was to award half of the retail licenses to people with previous cannabis convictions, racial minorities, women, and veterans disabled during service. Several veterans have filed a lawsuit stating that veterans were unfairly passed over for the early licenses. The judge in the case ordered that the state wait to award any new dispensary licenses until the case continues.
Opening a dispensary in New York will be expensive. While profits will likely be high once you open, you need to find a way to secure the funding needed to get your cannabusiness operational — which experts say could cost between $500,000 to $2 million.
This figure accounts for a variety of expenses for your cannabusiness, including:
Licensing and application fees
Lawyers and consultants
Real estate
Dispensary design and construction
Staffing
Business equipment
Surveillance and security system
Marketing and advertising
Products and inventory
Many cannabis entrepreneurs take out loans to cover these up-front costs, either from credit unions or cannabis-friendly banks. Some are able to partner with others or enlist investors to start their businesses. However, you should do your due diligence and research before taking on a loan or going into business with an investor. Unfortunately, there has been some predatory lending occurring in the market because of the inability to lend from large banks. Make sure that you do this research before you get too far in the process of creating your cannabusiness.
Understand Cannabis Laws & Regulations in New York
There are hundreds of laws and regulations that apply to cannabusinesses in New York. While this can feel overwhelming, it’s important to follow them carefully, especially when you’re setting up your dispensary.
There are some regulations that apply to your customers that you’ll need to adhere to, including:
Customers must be over the age of 21
Customers can only buy 3 ounces of cannabis flower per day
Customers can only buy 24 grams of cannabis concentrates per day
Others regulations apply to your business location, including:
Installing a 24-hour commercial-grade security system
Installing a perimeter alarm
Conducting video surveillance in every part of the store with cannabis products
Products cannot be visible from outside of the store
Maintaining minimum staffing levels (depends on business plan submitted with application)
Training staff on local ordinances, laws, and cannabis safety
It’s vital to take these rules seriously from the beginning. Neglecting even a single law could result in your dispensary getting shut down. You can consult an extensive overview of the New York cannabis laws and regulations here.
Invest in the Right Team
You need to hire a team of high-quality employees who will help your business succeed from the very first day. Your budtenders can make or break your entire business model, so you need to vet them carefully and train them well.
Your budtenders will be interacting directly with clients. They’ll answer their questions, suggest products, and upsell items. Hire these employees carefully, and make sure they’re happy in their positions by offering great pay and benefits.
To streamline training, create training manuals and SOPs (standard operating procedures) so that every employee is trained in the same way. This will limit mistakes and increase efficiency and customer satisfaction.
Final Thoughts on Launching Your New York Cannabusiness
Cannabis is expected to become a booming industry in New York. If you’ve always dreamed of opening a cannabusiness, now’s your chance to get in as early as possible and make your impact on the market!
The Equity Workshop Tour: Impactful Conversations with Regulators
by Mike Lomuto, NCIA’s DEI Manager
Part 1 of a Blog Series Recapping the Equity Workshop Tour – Spring 2023
I believe that the cannabis industry needs intimate and dynamic events, particularly if we are to build in an equitable and diverse fashion, and that’s why I embarked on the Equity Workshop Tour, navigating countless obstacles along the way.
After completing the four workshops that comprised the Tour, that belief has been validated, with several additional takeaways.
As part of each workshop, we conducted panel discussions with representatives of state and city regulatory agencies and advocacy organizations.
These conversations were especially illuminating for me, as I got to witness firsthand the ways in which regulators and advocates have been working together in each of these states, with the same mission of equity front and center.
NEW JERSEY
In New Jersey, the Cannabis Regulatory Commission (CRC) recognizes the need for input from stakeholders, and our intimate panel discussion, with a high level of audience participation, offered exactly that.
Hearing the “origin stories” of CRC Vice Chair Samuel Delgado and CRC Commissioner Charles Barker is a large part of why I believe we have a chance at an equitable industry. Because at the end of the day, we have solid allies within the halls of government, who share our mission.
I was very encouraged to learn about a state that appears to be outpacing other states in the drive to stand up an equitable industry. There does, however, appear to be a lot of work that needs to be done on the municipal level. This is where advocacy organizations, like NCIA, and stakeholders must work together to educate local regulators in order for expeditious and equitable permitting processes to unfold. I believe that NCIA’s committees can provide support in this area, as we have previously, by providing written or verbal testimony on specific matters that municipalities are still unaware of.
It was also illuminating to understand the role that service-disabled veterans play in the industry, as pointed out by Osbert Orduna (of NHCC and SDVICA). Nichelle Santos (M4MM) also contributed valuable insights to this panel discussion.
ILLINOIS
Illinois is a state that has drawn the ire of many. While the legislation was the first to include equitable provisions, the implementation has been challenging, and many people have lost a lot.
That said, as opposed to the nascent and scattered approach of advocacy I witnessed here a few years back, it’s very encouraging to see advocacy organizations working together on the same page, developing a collaborative working relationship with one another and the regulators. A big shoutout to Cannabis Equity Illinois Coalition (CEIC) for their role in this. (check out this recent Catalyst Conversation to learn more about their work)
It seems that a consolidation of Cannabis oversight into a singular agency with its own power to regulate the industry is needed. There are currently 17 agencies with a role in Illinois’ industry, and the state’s Cannabis Regulatory Oversight Officer serves as a limited version of a centralized agency, without the power to enact the implementations everyone seems to know are needed.
I encourage you to tap in with CEIC, SEEN, and ULCIA to learn more about how you can help with the priorities they’ve identified are necessary to create an equitable industry in Illinois.
NEW YORK
In New York, there is a need for more transparency, which it seems the Office of Cannabis Management recognizes and is headed in that direction. I’ve said this before, and I’ll say it here. OCM has a difficult job, balancing the directives from those above it, with the needs of the stakeholders. As Tabatha Robinson, OCM’s Deputy Director for Economic Development Policy and Research, pointed out during the panel, OCM is made up of several dedicated people who go above and beyond because they believe in creating an equitable industry. As advocates, our challenge lies in balancing the above understanding while also ensuring that the government is held accountable for its promises
Shanduke McPhatter, a CAURD licensee who represented the NY CAURD Coalition on the panel, said it best when he advocated for greater transparency in the process. He reminded us that patience is not the issue for those who have served time, as they’ve learned patience the hard way already. But while being patient, there is a need for greater transparency from the state. A large part of this has to do with the major lack of transparency from the Dormitory Authority of the State of NY (DASNY), which also impacts OCM and their ability to operate properly. It seems like it’s time for Ruben McDaniels and DASNY to stop playing games, but I’m not stating anything that everyone in New York doesn’t already know.
Lastly, I appreciated Dr Adrian Adams (M4MM) and Scheril Murray Powell (JUSTUS) pointing out the importance of the industry to work together to find creative solutions. These types of discussions are a great starting point, but it’s how we collaborate on action items moving forward that will define our path forward.
MICHIGAN
In Detroit, our panel included NCIA Board Member Rebecca Colett, who has founded the Detroit Cannabis Project (DCP) as a mentorship group to support cannapreneurs on their journey. Thus far, that journey has mostly consisted of staying relevant and advocating properly while the myriad of municipal challenges have unfolded.
What stood out to me was the way in which Kim James and the City of Detroit’s Homegrown Cannabis Office have partnered with DCP, recognizing the need to support mentorship from the municipal level. As Detroit comes online, and as capital markets open back up to fund these new cannapreneurs, the participants in Detroit’s cannabis program will have a leg up on where they would’ve been without this type of holistic support.
Another interesting topic of conversation was led by Scheril Murray Powell, who provided an update on the work to support Legacy operators being conducted by ASTM and the JUSTUS Foundation. This includes advocating for a universal definition of “Legacy operator”, of which NCIA’s DEI Program is very supportive:
“An individual who: 1) Commercially for the majority of their income, or sacramentally, or ceremonially distributed cannabis; 2) Outside of the Legal Framework; 3) During the period of Prohibition; 4) For a minimum of 5 years before legalization.”
As part of the beginning of what will hopefully be a robust dialogue on this topic, NCIA Cultivation Committee member Joseph Smith pointed out the potential challenges for adopting such a standard in the state of Michigan, which had a caregiver program for a decade or so prior to legalization.
I can’t wait to get back out to Michigan to see this constantly-evolving program.
WHAT IT ALL MEANS
My biggest takeaway is that no matter how many of these types of conversations we have, we need to continue having them and to continue pushing the ball forward. Cannabis is going to take several years to stand up properly, and equitably, so dialogue between advocates, business owners, and regulators is invaluable at this stage in the game.
And the more cannabis entrepreneurs realize the importance of advocacy at this early stage, the more an equitable industry is possible.
My hope is that these panels, in the setting of the workshops, provide a forum for the right type of conversations, as well as inspiration for business owners as to how to advocate for themselves and others in a successful manner.
It Takes A Village: NCIA’s Equity Workshop Tour is Developing an Ecosystem
by Mike Lomuto, NCIA’s DEI Manager
The depth and cohesiveness of our networks are what will carry us through to the other side of cannabis prohibition, positioned for ultimate success.
When I started my transition from the legacy space into regulated cannabis about a decade ago, I did so in the silo of the Bay Area. After failing to make that transition successfully, I took a step back and recognized that my network wasn’t what it needed to be in order for me to build the type of long-lasting business I dreamt of.
In order to turn the dream of generational wealth into an actionable plan, I needed to expand my network. That’s when I started getting involved with NCIA. I saw access to a national network as a priceless resource on this journey. So I set out to not only access the network myself but I was also provided the opportunity to build out the DEI Program so that we could create a structure that would allow everyone to plug in.
Like any other network, not everyone is for everyone. But my legacy days taught me all I needed to navigate the network and find the people who were real, and who actually care about the industry’s potential to create a new paradigm, distinct from the normal corporate, colonial systems we see rampant in other industries.
But creating a new paradigm isn’t easy. It takes a village. And then some.
And that’s why I believe the Equity Workshop Tour is so important. It’s an opportunity for us to continue to grow our networks, and to do so with intention in a structured and curated environment, designed to facilitate and accelerate network development, so that real can find real, and folks can not only get the info and insights they need to succeed but make those valuable connections.
The Spring 2023 Tour is four stops – Chicago, Detroit, Jersey City, and Brooklyn. But this is just the beginning. We’re planning something more expansive for our Fall and Winter tours. And we also have some virtual events in the works in between, so that folks who attend the workshops can continue to build together, as well as with fellow attendees from the other workshops across the country.
Partner Organizations Who Are With Us for the Long Haul
You’ll notice that we have several organizational partners signed on for the tour. This isn’t just some slapped-together list. These partners are all organizations that we’ve been building with for some time now and intend to do so for a long time coming.
In Chicago, some of these conversations go back several years to the rollout of adult use. We hosted a Catalyst Conversation in February with Cannabis Equity Illinois Coalition on the power of Community Benefit Agreements. We’ve intersected with SEEN countless times. The United Latino Cannabis Industry Alliance is a new organization, but one whose founders we’ve been building relationships with for years.
And in Detroit, we have to show some love to the Detroit Cannabis Project, as they were also an integral part of our very first Equity Workshop at our Cannabis Business Summit in Detroit in September 2021.
NCIA proudly represents Main Street Cannabis, and this Spring Tour consists of cannabusinesses that reflect that.
Several of our sponsors are represented in NCIA’s committee structure. Meaning they have been volunteering their time, experience, and insights to the movement in more ways than one already. So much of my success in building the DEI Program comes from my regularly leaning into support from our committees.
Grow America Builders and Etain both came on as gold sponsors, and both have been contributing to our committee work for some time now.
I’m also proud to say that Dao Mastery (the coaching & consulting company I co-founded) is the official platinum sponsor for the tour.
All of these companies understand the importance of DEI in cannabis as an integral part of what we’re building toward in this industry in the first place. It’s not an afterthought, but rather something that informs the decisions we make.
It All Culminates In D.C.
This Spring Equity Workshop Tour has also been designed to provide me and our DEI Delegation with lots of insight and fuel as we head to Washington, D.C. for NCIA’s 11th Annual Cannabis Industry Lobby Days, May 16-18. We’ll be bringing with us the stories and the collective power of everyone we workshop with over the coming days. In fact, two of our DEI Delegates, Osbert Orduna and Adrian Adams, have been an integral part of planning this round of the Equity Workshop Tour. Not to mention the fact that two of our other DEI Delegates, Raina Jackson and Anthony Jenkins, were a part of planning the original round of workshops back in 2021.
I hope to see folks while I’m out here on the road this month. This is just the next step in the building of our ecosystem, and it’s an important one.
Anyone who qualifies for Social Equity is eligible to attend these FREE workshops. And if you don’t qualify for Social Equity, but you believe in what it means and stands for, we’d like to connect with you too, so don’t be shy.
2023 is New York’s year for cannabis – at least that is what we are being told. It has nearly been two years since the state voted in legalized recreational use and sale, but the state has been very slow in getting processing facilities and dispensaries up and running, with only three of the 66 licensed establishments in operation as of the end of February. It is no secret that New York has the potential to be one of the largest cannabis markets in the world. This year alone, New York City is expecting over 50 million visitors – many of them looking to buy legal weed.
Everyone can see the value that New York will bring to the industry, but why does it feel like they are dragging their feet to bring something to the table?
It appears that the state may have bit off more than it can chew.
A lack of understanding of the complexities of securing commercial cannabis real estate combined with the fact that raising necessary capital has been slow-moving, has made it so that cultivators now have too much supply with no means of distribution to meet the demand.
Good intentions, slow follow-through
The guiding social equity program behind New York’s retail licensing system is a giant leap forward within the cannabis industry to bring up those directly affected by the failed war on drugs. The Cannabis Adult-Use Retail Dispensary (CAURD) licenses are aimed at prioritizing these underserved communities and awarding licenses to those who have been convicted of marijuana-related crimes, or have a direct family member that has been charged, with the opportunity to open retail locations. Nonprofits that work directly with these communities have a chance at obtaining licenses as well.
One of the most enticing things about these licenses is that the Dormitory Authority of the State of New York (DASNY) has been tasked with finding storefronts for entrepreneurs who have been granted licenses and even build them out for them. To do so, the state has contracted 10 firms to design and construct each dispensary. But again, the state has been very slow in getting dispensaries up and running. It seems that DASNY has discovered the reality that finding landlords willing to lease to a cannabis business may be more daunting than expected.
This only adds to the sense of urgency that has lingered in the air for the last two years. Businesses are ready to get up and running just to play catch up to the underground market that is thriving across New York City’s boroughs. Currently, New York has estimated that there are roughly 1,400 unlicensed retailersoperating in the city. Unregulated sales mean that weed has the potential of going to underage kids, being tainted and it is all ultimately going untaxed. New Yorkers and the state are hurting due to the delayed rollout, but there is still time to change things around.
Since spaces are limited for license holders waiting on DASNY to figure out the real estate landscape, the state has started to give licensees the option to go out on their own to secure a location for the sake of being one of the first to the legal market.
The problem is that this good news comes with a caveat. If a licensee decides to break out on their own, they will be forgoing their share of the $200 million public-private fund that DASNY has budgeted to help with operating costs. This fund is essentially a state loan that each retailer will have to pay back, including interest. But the problem is that DASNY has not yet raised the necessary funds to dole out to retailers – the only amount that the public is aware of is the $50 million that the state provided.
So, the million dollar questions are, do these entrepreneurs take a chance to be first to the scene? Or do they trust that the money and real estate issues will work themselves out?
It is hard to say. But what we do know is that there are new cultivating and processing licenses being secured this year as well, and a huge backlog of weed in storage, so there will be no lack of product once the doors to the public open up – right now, it is just a matter of time.
So maybe NYC should get out of its own way, put a bit more “market” in the cannabis market, and let 1,000 blossoms bloom!
Andrew Kaye has been involved in all aspects of the financial services industry, as a fund portfolio investment manager, investment banker, family office investor and attorney. He has worked with start-ups on their first raise through global enterprises undertaking billion-dollar stock offerings, and has significant investment experience in the cannabis industry. Currently, Andrew works as Sweet Leaf Madison Capital’s Chief Commercial Officer. Lending his expertise toward the creation of middle market financing solutions for real estate and equipment financing needs in the cannabis space.”
“Sweet Leaf Madison Capital provides non-dilutive, asset-based lending solutions to the underserved middle market of the cannabis industry by originating real estate loans, equipment financing, securitized term loans, and more for entrepreneurs and businesses. The company is based in Denver, Colorado and has offices in New York City and West Palm Beach, Florida. To learn more or complete a loan application, visit Sweet Leaf Madison Capital online, or continue the conversation on LinkedIn, Twitter and Facebook.”
Andrew J. Kaye is Chief Commercial Officer of Sweet Leaf Madison Capital. He can be reached at akaye@sweetleafmadison.com.
Committee Insights | 11.29 | The Pathway to Greater Equity in New York’s Adult Use Cannabis Market
In this edition of our NCIA Committee Insights series, originally aired on November 29 and produced NCIA’s Diversity, Equity & Inclusion Committee, we held a lively discussion to present the official recommendations jointly submitted to the New York Office of Cannabis Management in Fall 2022.
Since early 2022, NCIA and our DEI Committee has been conducting an ongoing roundtable discussion consisting of multiple national and New York based cannabis social equity and industry organizations to assess and provide feedback regarding rules and regulations. We also covered the PIES Program, which is an innovative program that draws on the lessons learned from other states to create a streamlined solution with true DEI front and center.We also covered the PIES Program, which is an innovative program that draws on the lessons learned from other states to create a streamlined solution with true DEI front and center.
Learning Objectives:
• Learn about NCIA’s New York Social Equity Roundtable, a collaboration of multiple National and New York based cannabis social equity and industry organizations
• Gain insights into how New York is rolling out its Adult Use Cannabis market with regards to Social Equity and Justice Involved individuals
• Understand how our recommendations would impact New York’s market if implemented, and Identify opportunities for organizations and the state agency to work collaboratively
Panelists:
Frederika McClary Easley
Director of Strategic Initiatives
The People’s Ecosystem
Scheril Murray Powell, Esq.
Chief Operating Officer
The JUSTÜS Foundation
Maur Stringer
Founder, Owner, CEO
The Magi Tree LLC
Cynthia L. Mompoint
Black and Brown Economic Power in Cannabis
Adrian Adams, Ed.D.
CEO
Ontogen Botanicals
Mike Lomuto (Moderator)
Diversity, Equity, and Inclusion Manager
National Cannabis Industry Association
Sponsored By:
Cultivating Community in a City Near You: Announcing NCIA’s 2023 Event Calendar
It’s been a year of big change for NCIA. As we come to the end of 2022, we want to take a moment to send a message to our members and supporters about these changes, and most importantly, get excited for what’s next for the future of NCIA events.
The End of An Era
The events industry has faced unforeseen challenges these last couple of years, and NCIA was not isolated from these issues. Outside of needing to postpone our large tradeshows until late 2021, we also had to postpone a whole calendar of approximately 40+ events nationwide which was our primary way of connecting our community and meeting with our members face to face. Our team overcame these challenges by building our expansive digital presence and online events program to continue to provide education and exposure opportunities to our members, however this did still require a significant pivot in organizational strategy. Due to the residual hardships brought by the pandemic, we learned earlier this year that the Cannabis Business Summit & Expo was not going to be able to be produced on the scale or quality that we or our members had come to expect throughout the years. So, in tandem with our previous tradeshow co-producers, we made the difficult decision to dissolve our existing partnership and accepted an offer from them to acquire our tradeshow portfolio. For those who have been attending our tradeshows since 2014, we can’t thank you enough for your participation in those events and making them so impactful for the industry. There are too many good memories to revisit, and hope you take a moment to remember some of your personal highlights throughout the years as we look forward to coming together for new events in 2023.
Looking Ahead to 2023
For now, we will be taking a hiatus from the tradeshow space. This will allow our team to refocus our efforts into other impactful networking and educational opportunities. We’re excited to get back to our roots and focus our efforts on intentional and innovative gatherings that connect Main Street cannabis businesses with each other and with NCIA’s advocacy efforts.
We’ve listened to the feedback from our members, and know that in-person networking remains essential to building your business and growing your network. In these uncertain economic times, every dollar spent and any time away from your business impacts your bottom line. As the leading cannabis trade association representing small-business owners, we’re committed to making the investment to meet our members where they are, and to continue facilitating experiences where our members can make key connections with fellow business owners. Moving into 2023, we’re reinvigorating our events program starting with our regional Industry Social and Cannabis Caucus event series, leading into the cannabis industry’s biggest policy and advocacy event of the year: NCIA’s 11th Annual Cannabis Industry Lobby Days.
We invite you to move forward with us as we enter a new chapter in our history. Without further ado, we are excited to announce the lineup of events for the first half of 2023!
Join NCIA to Take Advantage of Complimentary Tickets
As always, NCIA members receive complimentary access to all of these events based on membership level. Looking to have an expanded presence at each event? Consider upgrading your membership today in order to include your entire team or prospective clients.
Huge thanks to the initial sponsors of these events which have made a significant investment in NCIA’s community building efforts moving into 2023! Learn more about each of these pioneering businesses helping drive our mission forward and reach out to schedule a meeting with their team surrounding the upcoming events.
Gold Sponsor
Silver Sponsor
Bronze Sponsor
Support These Events Through Sponsorship
Has your company had trouble breaking through the noise on a crowded expo floor this past year? Is your brand looking for quality B2B connections with market leaders? Want to play a larger role and align your business with NCIA’s community building and educational efforts?
Consider one of our affordable sponsorship packages, starting for as low as $500, which will allow you to reach thousands of leading cannabis businesses while supporting NCIA’s advocacy work on behalf of small cannabis businesses. Contact our team at sponsorship@thecannabisindustry.org to learn more.
We can’t thank our community enough for the continued support of NCIA and our events. We look forward to seeing you, in person, next year!
Member Blog: How to Prepare a Winning Dispensary License Application
by Gary Cohen, Cova Software
The cannabis industry has come a long way in the U.S. Although we still await federal legalization, many new states have recently jumped on the bandwagon, and legacy states are awarding more social equity licenses. While New Jersey and Mississippi will be opening their first dispensaries by the end of 2022, New York has started accepting applications for CAURD licenses from justice-involved individuals. But scoring high points on your dispensary license application can be challenging, especially with all the stringent requirements. Here are some quick tips to help you stand out and prepare a winning dispensary license application.
Follow your State Cannabis Authority’s Guidelines
Every state in the US has different guidelines and regulations for a cannabis dispensary license. Do a thorough review of all the information available on your state cannabis authority’s website, and keep a look out for when they will start accepting applications. Most states accept only electronic applications, and you will likely have to create an account online on a designated website and link your company’s official information. For an application to be deemed complete, a response to each criterion specified must be included, along with the required documents.
Ensure You Qualify and Apply for the Right Category
To be eligible to submit a cannabis dispensary license application, you must reside in the state where you are applying or must be registered to do business in that state. Many states are awarding conditional cannabis business licenses to social equity applicants first or prioritizing applicants impacted by the war on drugs to build an equitable cannabis industry. If you qualify for any of these categories, ensure that you apply for the right one to expedite the processing of your dispensary license application.
Connect with the Community Where you Plan to Operate
Some states require your dispensary to be located in the municipality you live in, and you will be awarded a license only for a particular zone. Community reach and impact are also criteria laid down by some cannabis authorities, and you must establish connections with not just local and state officials but also other people who can help you understand the bigger picture better. For example, New Jersey and New York want you to explain the positive community impact your dispensary business will have. If you don’t connect with the community, you won’t be able to align your vision with their needs in your dispensary license application.
Fortify Application with a Business Operations & Security Plan
After familiarizing yourself with the license requirements and structure, you must dive into how you can prepare the best possible application to score higher points on every measure. For example, to obtain a conditional dispensary license in New Jersey, 40 out of 100 points are for your dispensary business plan, and another 50 points are for a regulatory compliance plan. One of the most crucial aspects of this is a dispensary operations plan that you must include in your application. This plan helps authorities understand how your dispensary business will comply with all cannabis laws and regulations and ensure safe access to cannabis for your customers.
Compliance is the Name of the Game
The detailed plans included in your cannabis dispensary license application must also mention the technology provider you intend to partner with, and choosing a compliant cannabis retail platform will help you fortify your application further. Prepare a winning dispensary license application by downloading Cova Software’s free template, Dispensary Operations and Security Plan, which will serve as a comprehensive guide to writing a winning plan for a successful cannabis retailer license application.
Gary Cohen is the CEO of Cova Software, the fastest growing technology brand in the cannabis industry. Cohen’s focus has been driving the company’s overall strategy, including its vision, go-to-market plan, and strategic development. Since joining the cannabis industry in 2016 and launching Cova commercially in 4q17, Cohen has led Cova to dominate the enterprise sector for dispensary Point of Sale, while forging client relationships with hundreds of single-store retailers across North America.
With Cova’s cannabis POS and its excellent integrations with eCommerce and delivery services, the online order automatically pops up for the budtender to tender the sales, and the POS system updates inventory once payment is approved. Cova offers multiple eCommerce solutions to choose from, as per your needs and budget, and you can legally sell cannabis online stress-free while staying compliant with strict government regulations.
Equity Member Spotlight: Osbert Orduña – The Cannabis Place
NCIA’s editorial department continues the Member Spotlight series by highlighting our Social Equity Scholarship Recipients as part of our Diversity, Equity, and Inclusion Program. Participants are gaining first-hand access to regulators in key markets to get insight on the industry, tips for raising capital, and advice on how to access and utilize data to ensure success in their businesses, along with all the other benefits available to NCIA members.
Tell us a bit about you, your background, and why you launched your company.
I am a first-generation Latino of Colombian descent, Spanish was my first language and my dad spent most of my youth incarcerated. I grew up in NYC Public Housing projects, and I have first-hand knowledge of the indignity of what it feels like to personally be stopped and frisked nearly 100 times which is what happened to me as a kid and young adult for doing nothing else than being a poor Latino growing up in the hood. I was an Education Opportunity Fund scholar and the first in my family to go to college, where I received a degree in business, and a graduate certificate in law. I earned the designation of Disabled Veteran while serving in Iraq with the United States Marine Corps, and I am also a 9/11 first responder. I retired after a career in public service, and have worked as an entrepreneur for over 10 years, and know what it takes to start a business from scratch, without a rich uncle, generational wealth, or rich financial backers.
In late 2020 and early 2021, I had the opportunity to visit 50 non-MSO recreation and medical dispensaries in five states on the east and west coast. I wanted to learn more about dispensaries and best practices across the industry, but my trip opened my eyes to a different reality. Forty-nine of the dispensaries were owned by white males and one was owned by a white female, not one owner looked like me or shared a similar background. None of these dispensary owners had been stopped and frisked hundreds of times for no other reason than just because they lived in an area with historically high rates of arrests and enforcement from over-policing. Yet they were now engaged in an industry that seemed to exclude us. My trip left me sad but determined to enter the cannabis market so that people who look like me who came from the struggle of the streets, and were collateral damage in the war on drugs could have a chance. I was determined to create a positive example for Latinos and others to follow.
What unique value does your company offer to the cannabis industry?
The Cannabis Place offers a unique value proposition which is our commitment to launching as a union cannabis dispensary on day one. As of yet, we are the only dispensary in the state of New Jersey and the nation to propose this. By launching our business as a unionized shop we are being a partner to our Jersey City, NJ community. Our value proposition promises that we will be a responsible and proactive member of the community that provides union career opportunities with true living wages that will empower our team members to provide upward mobility for themselves, their families, and the greater community. Furthermore, we are engaged as a Workforce Development partner with Cornell University, the Workforce Development Institute, and Hudson County (NJ) Workforce Development Board. With these partnerships, we will develop standardized training modules that will be utilized to train prospective dispensary workers and provide opportunities for those seeking cannabis careers in this new and emerging industry.
Our mission: To provide high-quality cannabis to clients with a consistent product and first-class service they can trust. To build our brand on the core values of client service and care, while maintaining the highest standards of quality, integrity, and community outreach.
What is your goal for the greater good of cannabis?
As the CEO of The Cannabis Place, our primary goal for the greater good of cannabis is to advocate and support a proactive approach to adult-use by providing a local and safe environment to dispense cannabis products. We operate as a social impact cannabis brand and are dedicated to providing consistent access to safe and reliable cannabis products that are ethically grown and sourced. Our aim is to launch the first unionized cannabis dispensary in New Jersey, leading by example, and demonstrating to other businesses that true success is based on placing people over profits.
Our goals are as follows:
Be an accelerator for generational wealth-building opportunities among our employees from the community
Be a reliable source for cannabis education and awareness
Utilize our Community Impact grants to assist and support outreach in areas that have been disproportionately impacted
Our advocacy at The Cannabis Place is based on workers rights, especially organization, fairness and quality healthcare. We believe that it should be easier for people in all job fields to organize. At The Cannabis Place we support the implementation of legislation that will raise the minimum wage floor for all workers in our community, to provide for true living wages that place people over profits. Workers in all industries deserve more from the moment they are hired. Like many others I grew up as part of the working poor, in public housing with limited minimum wage job opportunities, without healthcare and with minimal alternatives to life on the streets. At The Cannabis Place we believe that by providing our workforce with union careers with true living wages and full benefits, our team members, their families and their communities will feel the immediate difference of financial stability, long-term growth, and the impact of upward financial mobility to help them support their family and to build a better life.
What kind of challenges do you face in the industry and what solutions would you like to see?
Latinos are consistently underrepresented in terms of business owners throughout all industries. Now when you focus specifically on cannabis and look at a national level, just 5.7% of all license types are held by the Hispanic community. I have seen challenges in the cannabis industry in two key areas, access to capital and the real estate market. It takes money to make money so if you grew up poor, without generational wealth, no rich uncle, no hedge fund connections or oligarchs to call on, how do you raise funds to have the millions that are needed to launch a dispensary or grow? Next and along the same lines is real estate. A lot of landlords won’t lease to cannabis businesses but unfortunately, our experience has been that again a predatory market exists where cannabis rental rates are 2 to 10 times the normal lease rates for the area. The other option is to buy a commercial parcel which brings us back to issue #1 – access to capital. I am ever the optimist, and I see the Latino community growing in the legal cannabis industry as entrepreneurs, c-suite members, and as leaders in the industry bringing our unique insight and sabor to the industry while creating opportunities for generational wealth for our community. In order to get there, we need to bridge the gap through social equity grants and loans that can help Hispanic cannabis entrepreneurs raise enough capital to start their business, and receiving financial education is also crucial for Hispanic entrepreneurs in multiple phases of the cannabis business planning timeline.
Why did you join NCIA? What’s the best or most important part about being a member through the Social Equity Scholarship Program?
We are a Disabled Veteran and Latino-owned company with a core focus on community impact through social impact so the ability to be a Social Equity Scholarship recipient in an organization like the NCIA, a group who are actually dedicated to ensuring that small cannabis businesses have a seat at the table in Washington, D.C. and beyond, was super important to us. We look forward to learning new information and utilizing networking opportunities to help us grow and succeed in the cannabis industry.
The fact that NCIA is leading change to protect the legal cannabis industry, advocate for our state laws, advance federal policy reforms, and to make this a more inclusive and prosperous space by working together to defend the responsible cannabis industry. Creating more opportunities for small businesses rather than just the wealthiest few is the most important thing for us as members of the Social Equity Scholarship Program.
The Cannabis Place 420 Corp is the first ever Disabled Veteran and Minority Owned Business enterprise to successfully navigate the Jersey City, NJ municipal cannabis dispensary approval process in this new and emerging cannabis market.
Committee Blog: Cannabis Lounges – Coming to a City Near You?
Although the concept of state-legal cannabis has been around in some shape or form since 1996, cannabis remains illegal to consume in most public places. In other words, legal cannabis consumption remains relegated to back alleys, derailing efforts to “normalize” cannabis use. Tourists visiting popular cities where weed is legal are caught in the unenviable Catch-22 of being able to purchase, but not publically consume, the product. And those who attempt to use cannabis in public still face criminal penalties in some states, with minorities three times more likely to be targeted for arrest, perpetuating racial disparities at a tremendous social cost.
Enter the cannabis lounge. Cannabis lounges — also known as “consumption lounges,” cannabis cafes, or some variation on that theme — are in simplest terms the cannabis equivalent of a bar or restaurant. Depending on state and local regulations, lounges offer users the chance to congregate in a public place and smoke a joint, try out a $500 gravity bong, or sip on a cannabis drink. With any luck, consumers may enjoy their cannabis with a snack or dinner, but mixing with alcohol is typically not allowed.
As with any “new” risks, some cities, states, and insurers are… concerned. Despite some obvious tax and social benefits, detractors cite a host of reasons to prevent lounges from coming to a city near you, including at the forefront: fears of public nuisance (odors, theft, and disruption) and overconsumption — especially because most states insulate cannabis cafes from liability for harm caused by obviously intoxicated or underage users, unlike dram shop laws for alcohol.
As another NCIA member recently pointed out, even in states that do allow cannabis cafes, regulatory bodies continue to struggle with how to shape the laws and regulations governing lounges to afford adequate consumer protection while allowing businesses to thrive. Moreover, without a better understanding of the regulatory landscape, some insurers — whose business model hinges on the ability to accurately price a risk — may be unwilling to play in this new cannabis lounge market.
A Sampling of State Approaches to Cannabis Lounges
Alaska led the country in 2019 in licensing on-site consumption. A handful of states and localities have followed Alaska’s guide, and more are anticipated to join this year, including Michigan and New York. We compare a few regulatory schemes below and also consider the impact of dram shop legislation on risks faced by the industry.
California
California, governed on the state level by the Medicinal and Adult Use Cannabis Regulation and Safety Act, delegates to localities the right to open consumption lounges. Put simply, cities have to affirmatively “opt in” to allow lounges. With a few contingencies — including that patrons must be 21 or older and no alcohol or tobacco can be sold on premises — “a local jurisdiction may allow for the smoking, vaporizing, and ingesting of cannabis or cannabis products on the premises of a” licensed retailer. SeeBPC § 26200(g).
To date, only a few localities have opted in to allow cannabis lounges, including San Francisco, Oakland, and Palm Springs. West Hollywood, in efforts to create an epicenter for canna-tourism, plans to allow up to 16 lounges within its jurisdiction. Because state law provides little regulatory guidance for lounges, localities generally provide more specific guidance. As an example, West Hollywood’s local municipal code requires security guards on site, as well as within a two-block radius surrounding the business during operation, and allows the sale of cannabis to an individual “in an amount reasonable for onsite consumption.” West Hollywood Municipal Code §5.70.041. Only one lounge is currently open in West Hollywood, the Artist Tree’s Studio Cannabis Lounge, which offers not only lounge access but cannabis yoga, live music, and comedy shows, along with a revolving selection of local art. The Woods, another West Hollywood dispensary with a soon-to-open courtyard lounge space, is also slated to open in 2022.
Although California law significantly limits third-party liability for alcohol-related accidents, it does not afford cannabis owners the same protection. For example, California Civil Code §1714explicitly states that furnishing alcohol “is not the proximate cause of injuries resulting from intoxication,” which has essentially absolved bars, restaurants, party hosts, and most others of potential liability for selling or furnishing alcohol to customers and guests with an exception for liability arising from the furnishing of alcohol to an “obviously intoxicated minor.” SeeCalifornia Business & Professions Code § 25602.1. Without similar protections for cannabis lounges, injured parties could attempt to sue under a negligence theory if a business or employee serves an intoxicated patron who causes harm.
Colorado
As of January 1, 2020, local jurisdictions in Colorado can opt-in to the state’s cannabis hospitality business license regime (Colo. Rev. Stat. § 44-10-609), and as of March of 2022, the City of Denver has approved cannabis hospitality businesses for operation. Denver operators include the first social equity applicant in Denver approved for a hospitality license, the Tetra Lounge, although from its website Tetra Lounge’s website describes itself as “a private lounge,” requiring a monthly or annual membership fee and a liability waiver to gain access.
As to dram shop liability, although Colorado law authorizes damages against a licensee for willfully and knowingly selling or serving alcoholic beverages to a visibly intoxicated person, the Colorado Legislature caps liability at $150,000 (Colo. Rev. Stat. § 12-47-801 (3)(II)(c)). This damages cap improves (i.e., reduces) the ISO hazard grade, resulting in the improvement of insurance options available for liquor liability. The legislature has not adopted the same or a similar damages cap on liability for cannabis consumption establishments.
Nevada
In June 2021, Nevada’s Governor signed Assembly Bill 341 into law, authorizing the Nevada Cannabis Compliance Board (“CCB”) to license and regulate consumption lounges across the state, subject always to local approval. The State plans to issue up to 65 lounge licenses (40-45 for lounges attached to existing dispensaries, 20 for independent lounges) with 10 reserved for social equity applicants.
Most recently, on June 28, 2022, the CCB voted to unanimously approve a host of regulations for cannabis consumption lounges. Nevada’s extremely detailed state regulations prohibit the sale of “single use cannabis products” with more than 3.5 grams of “usable cannabis” and 10 mg of THC for edibles; prohibit the removal of any cannabis products from a lounge; require a mitigation plan for impaired driving and detailed employee training for overconsumption; and require consumer education and warnings to customers, among other things. As with other states, Nevada allows local jurisdictions to prohibit consumption lounges and to implement more stringent regulations than state law.
Unlike other states, however, Nevada law carves out protections for cannabis lounge operators just as it does for alcohol. Nevada law already protects businesses that serve or sell alcoholic beverages from injuries inflicted by an intoxicated person. And while any person who knowingly furnishes an alcoholic beverage to any person under 21 years of age is guilty of a misdemeanor, the law provides only for criminal penalties, not civil liability. The Nevada Supreme Court has repeatedly refused to impose responsibility on vendors selling alcohol absent a legislative provision. SeeSnyder v. Viani, 885 P.2d 610 (Nev. 1994) (holding consumption is the proximate cause of alcohol-related injuries and dismissing the negligence claim against a tavern owner for alcohol service). The same rules will apply to cannabis operators.
Illinois
Over two years after full legalization of adult-use commercial cannabis in Illinois, cannabis lounges in Illinois are still relatively rare, with the first Chicago-area marijuana consumption lounge opening on April 20, 2022. Like other states, the State of Illinois does not directly license lounges, but it allows local governments to opt in.
Illinois creates a cause of action against sellers for injury by an intoxicated person. § 235 Ill. Comp. Stat. 5/6-21. The standards for liability under the Illinois dram shop law include: (1) sale of alcohol to any person who, while intoxicated, causes injury, and (2) any person owning, renting, leasing, or permitting the occupation of any building or premises with knowledge that alcoholic liquors are to be sold therein, severally or jointly, along with the person selling or giving liquor. In Illinois, the Dram Shop Statute provides the exclusive remedy for alcohol related injuries. See Charles v. Seigfreid, 65 NE.2d. 154 (Ill. 1995). The Statute also provides stringent limitations on recovery of damages. There is no equivalent in Illinois for cannabis entities.
The Takeaway for Business Entities and Insurance Providers
As with cannabis law generally, lounge operators face a patchwork of state and local regulations that vary tremendously by jurisdiction. In most places, cannabis lounge owners are not protected by dram shop/gram shop laws that otherwise insulate bars and restaurants from liability for overconsumption. This means that companies must be vigilant in protecting themselves from liability by instituting compliance and risk-management procedures.
In some instances, such as California’s West Hollywood, which has far fewer safeguards and guidelines than Nevada, operators are largely left to their own devices in implementing adequate risk transfer and risk management, compliance, employee training, and consumer education to limit risk of liability. While the West Hollywood municipal code requires lounges to limit cannabis sales of cannabis “in an amount reasonable for onsite consumption,” the “reasonableness” standard is rife with ambiguity and could lead to disputes regarding liability and assumption of risk if a patron overconsumes.
Evaluating and preventing overconsumption and intoxication will be particularly difficult for cannabis when: patrons have varying experience levels with cannabis; products can be sold in more than a single serving, and no specific consumer education is required. Thus, even in locations that have more stringent regulatory oversight, companies would be wise to consult with experienced counsel and consultants to avoid or limit potential risks associated with regulatory uncertainty, civil liability, and government penalties for non-compliance.
This brings us full circle to the question of insurance. Even in the states that allow consumption lounges, very few insurance companies provide coverage for on-site consumption (although some do). If an exclusion prohibits coverage, the company may not have coverage for important and sometimes catastrophic events, such as property damage by fire, theft/robbery, cyber events, sexual harassment or discrimination claims by employees or others, and bodily injuries to, or caused by, patrons (on and off premises).
Most existing property, general liability, products liability, and other insurance policies — including those written for the cannabis industry — expressly exclude coverage for on-site consumption or bodily injury caused by intoxication. In fact, some existing cannabis insurance companies include a “health hazard” exclusion in their policies, which exclude coverage for any bodily injury arising in any way from the use of cannabis, including any health injury. Cannabis insurance policies may also exclude coverage for intentional or illegal acts, which some insurers may try to apply to any claim involving cannabis on the basis that the sale of cannabis violates federal law (the Controlled Substances Act), even if it is state legal.
For current licensees that are planning to open an attached or adjacent consumption space, current insurance policies may not cover injuries arising in the lounge space. Further, any failure to identify a change in business type could prompt an insurance carrier to deny coverage for subsequent claims based on a theory of misrepresentation.
In closing, cannabis owners should attempt to negotiate separate and/or broader coverage that carves out coverage for their cannabis-related activities, including on premise consumption, with their current insurer or seek to obtain coverage from a different carrier. Experienced insurance coverage counsel can assist with identifying reputable insurance brokers and negotiating policies that provide such coverage. Because of the limited options, companies would be wise to begin the process of identifying experienced insurance coverage advisors at the beginning of their licensing journey.
Video: NCIA Today – Thursday, May 5, 2022
¡Happy Cinco De Mayo! NCIA Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every other Thursday on Facebook for NCIA Today Live.
Across the Country – State Cannabis News and Movement
by Madeline Grant, NCIA’s Government Relations Manager
As the deadline to submit feedback for the Cannabis Administration and Opportunity Act approached last week, our Government Relations team worked tirelessly to submit a detailed analysis and recommended improvements on behalf of the legal cannabis industry. The full comments and an executive summary can be downloadedhere.The Cannabis Administration and Opportunity Act (CAOA), submitted in July by Majority Leader Charles Schumer (D-NY) and Senators Cory Booker (D-NJ) and Ron Wyden (D-OR), would remove cannabis from the schedule of controlled substances, create a regulatory structure and federal guidelines for cannabis products and state-legal markets, and is intended to support restorative justice for the people and communities that have been disparately hurt by prohibition while ensuring fair opportunities in legal cannabis markets for small businesses and marginalized communities.
The introduction of the comprehensive draft language was a pivotal moment for the United States Senate and NCIA will continue to do whatever we can to ensure value-driven policies for the cannabis industry. Meanwhile, we continue to see movement at the state level as support for cannabis legalization efforts continues to grow. Here are some important updates happening at the state level.
California
California officials announced that they are soliciting proposals for a program aimed at helping small marijuana cultivators with environmental clean-up and restoration efforts. The California Department of Fish and Wildlife’s (CDFW) Cannabis Restoration Grant program will release applications this fall and remain open through spring 2023. The $6 million in potential funding, which comes from cannabis tax revenue, must go to government agencies, California nonprofits, or Native American tribes who would then work with cultivators on environmental efforts.
New York
The newly inaugurated governor of New York says she wants to “jumpstart” the implementation of cannabis legalization. Governor Kathy Hochul took a major step by making two key regulatory appointments to oversee the state’s cannabis market. Soon after they were quickly confirmed by the Senate during a special session. Former New York Assemblywoman Tremaine Wright (D) will serve as chair of the Cannabis Control Board, and former Drug Policy Alliance (DPA) staffer Christopher Alexander will be the executive director of the state’s Office of Cannabis Management.
Ohio
Ohio activists can begin collecting signatures for a 2022 ballot initiative to legalize marijuana in the state. The Coalition to Regulate Marijuana Like Alcohol (CTRMLA) launched its ballot effort last month. The new initiative is a statutory proposal and if supporters collect 132,887 valid signatures from registered voters, the legislature will then have four months to adopt the measure, reject it, or adopt an amended version. In the case of lawmakers not passing the proposal, an additional 132,887 signatures will be required to place the proposal before voters on the ballot in 2022.
Missouri
Another adult-use legalization proposal has been filed. Legal Missouri 2022 submitted the latest measure to the secretary of state’s office, and it will now go through a review period before potentially being certified.
New Mexico
The Cannabis Control Division announced applications are now open for businesses interested in legal cannabis producers licensed by the state of New Mexico. After an application is submitted, regulators will have 90 days to issue a determination.
Colorado
Colorado voters will decide on an initiative in November that would raise cannabis taxes to fund programs that are meant to reduce the education gap for low-income students. The secretary of state confirmed that the campaign behind the measure collected more than the required 124,632 valid signatures to make the ballot. The measure would give low and middle-income families a $1,500 stipend to have school-aged children participate in afterschool programs, tutoring, and summer learning programs.
As states continue to legalize medical and adult-use cannabis, be sure to check out our state policy map for updates. Our Government Relations team will continue to educate congressional offices as states move forward. It’s vital to have accurate information and resources for members and Congress and staffers on Capitol Hill. With advancements at the state level, we continue to relay the importance of cannabis legalization at the federal level. Please stay tuned for more updates from our Government Relations team.
Video: NCIA Today – April 9, 2021
NCIA Deputy Director of Communications Bethany Moore checks in with what’s going on across the country with the National Cannabis Industry Association’s membership, board, allies, and staff. Join us every Friday on Facebook for NCIA Today Live.
Member Blog: A Fire Under Cuomo Lights the Way — 5 Things To Know About Adult-Use Cannabis in New York
By Charles J. Messina, Esq., Jennifer Roselle, Esq. and Donald W. Clarke, Esq. of Genova Burns LLC
After several failed attempts, and seemingly the result of catching significant political heat as of late, Governor Cuomo is allowing the adult-use cannabis industry to blaze forward in New York.
With Gov. Cuomo’s signature, the bill (S.854-A), known as the “Marihuana Regulation and Taxation Act” (MRTA), establishes the legislative foundation upon which a regulatory infrastructure will be built to host a network of licensed operators to cultivate, process, distribute, sell, and host cannabis consumers. In addition to regulating adult use of cannabis, MRTA also amends the state’s existing medical use law (the New York Compassionate Care Act) and provides, among other things, rules for hemp, CBD, and other cannabis extracts.
What does MRTA mean for New Yorkers?
First, adults may personally possess up to 3 ounces of plant cannabis (and 24 grams of “concentrated cannabis”) without being prosecuted or arrested. In addition to decriminalization, the law also expunges convictions based on conduct which is now authorized under MRTA.
Unlike New Jersey’s recently approved cannabis legislation, consumption of cannabis will be permitted in the same (or similar) places as vaping and cigarettes. Also, New Yorkers will be able to grow their own cannabis. Although “home grow” will be delayed for months until after more rules are promulgated and retail sales commence, a household will be able to grow a maximum of up to twelve plants (six mature, and six immature), with a five-pound possession limit for adults.
Throughout MRTA, there is a heavy focus on social and economic equity. This is integrated in the application process, apportionment of tax revenue, and adjustments made to the penal code. Certain applicants can qualify as a “social and economic equity applicant” to help the Office of Cannabis Management reach its goal of awarding 50% of licenses to minority or woman-owned business enterprises, distressed farmers, or service-disabled veterans.
What is the Office of Cannabis Management?
Similar to New Jersey, the law’s terms will be supplemented by not-yet-created regulations. The regulatory framework will be created by a cannabis Advisory Board and carried out by the newly established Office of Cannabis Management (OCM). The OCM will be an independent office operating as part of the New York State Liquor Authority. It will have a five-member board, with three members appointed by the Governor and one appointed by each house.
What types of licenses are there and when will sales get rolling?
Because much of the regulatory licensing framework does not yet exist, there is no established start date. Reports suggest sales could commence as early as December 2022. Home-growers for recreational use must wait no less than 18 months after the initial retail sales to plant their seeds. The tiered licensing structure prohibits those upstream in the production process from selling to the general public.
The available licenses include:
*Cultivator License—includes the agricultural production of cannabis and minimal processing and preparation.
*Processor License—includes blending, extracting, infusing, packaging, and preparing cannabis for sale. There is a limit of one license per processor, but each license can authorize multiple locations.
*Distributor License—authorizes the acquisition, possession, distribution, and sale of cannabis from a licensed cultivator or processor to retail dispensaries and on-site consumption sites.
*Retail Dispensary License—authorizes the sale of cannabis to consumers, with a limit of three retail dispensary licenses per person. A retail licensee may not also hold a Cultivator, Processor, Microbusiness, Cooperative, or Distributor License.
*Cooperative License—authorizes the acquisition, possession, cultivation, processing, distribution, and sale from the licensed premises of the cooperative to distributors, on-site consumption sites, and retail dispensaries, but not directly to consumers.
*Microbusiness License—authorizes limited cultivation, processing, distribution, delivery, and dispensing of the licensee’s own adult use cannabis and cannabis products. A microbusiness licensee may not hold any other license, and may only distribute its own products to dispensaries.
*Delivery License—authorizes the delivery of products by licensees independent of another license.
*Nursery License—authorizes the production, sale, and distribution of clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis by cultivators, cooperatives, and microbusinesses.
*On-Site Consumption License—authorizes the establishment of a location for the on-site consumption of cannabis.
How will cannabis be taxed in NY and where is the revenue going?
MRTA places the tax on cannabis based upon the amount of the chemical compound that delivers effects to users (THC). There will be a 9% state tax at the retail level. A local excise tax will be 4% of the retail price. Counties will receive 25% of the local retail tax revenue, and 75% will go to the municipality. Municipalities can, however, enact legislation to opt out of permitting retail dispensaries or on-site consumption licenses within its borders.
MRTA mandates that 40% of the estimated $350 million in tax revenues will go to community grants and reinvestment, and 20% will go to drug treatment and education. The final 40% is earmarked for schools as of now.
What will be the impact on NY employers and employees?
Employers have no legal obligation to permit adult-use cannabis in their workplace. In addition, while offsite usage is protected, the law includes provisions that allow employers to take action against employees who are impaired at work if their performance is lessened, or the employee’s conduct interferes with the ability to provide a safe and healthy workplace. Employers may likewise act to comply with local, state, or federal laws or allow conduct that would result in loss of a federal contract or federal funding.
Charles J. Messina is a Partner at Genova Burns LLC and Co-Chairs the Franchise & Distribution, Agriculture and Cannabis Industry Groups. He teaches one of the region’s first cannabis law school courses and devotes much of his practice to advising canna-businesses as well as litigating various types of matters including complex contract and commercial disputes, insurance and employment defense matters, trademark and franchise issues and professional liability, TCPA and shareholder derivative actions.
Jennifer Roselle is Counsel with Genova Burns LLC and Co-Chair of Genova Burns’ Cannabis Practice Group. She has unique experience with labor compliance planning and labor peace agreements in the cannabis marketplace. In addition to her work in the cannabis industry, Jennifer devotes much of her practice to traditional labor matters, human resources compliance and employer counseling.
Donald W. Clarke is Counsel at Genova Burns LLC and a member of the firm’s Bankruptcy, Reorganization and Creditors Rights and Cannabis Law Groups. He has extensive experience with complex restructuring matters and a comprehensive understanding of federal, state, and local laws, including regulatory requirements, across all industries. This experience has enabled Mr. Clarke to assist clients with their navigation of such regulatory schemes outside of bankruptcy, including in the space of cannabis law.
For over 30 years, Genova Burns LLC has partnered with companies, businesses, trade associations, and government entities, from around the globe, on matters in New Jersey and the greater northeast corridor between New York City and Washington, D.C. We distinguish ourselves with unparalleled responsiveness and provide an array of exceptional legal services across multiple practice areas with the quality expected of big law, but absent the big law economics by embracing technology and offering out of the box problem-solving advice and pragmatic solutions.
Given Genova Burns’ significant experience representing clients in the cannabis, hemp and CBD industries from the earliest stages of development in the region, the firm is uniquely qualified to advise investors, cultivators, processors, distributors, retailers and ancillary businesses.
State Cannabis Policy Update: Can You Keep Up?
By Michelle Rutter Friberg, NCIA’s Deputy Director of Government Relations
Photo By CannabisCamera.com
Last week was an historic one for cannabis policy around the nation. The second largest adult-use market, New York, successfully legalized cannabis and has already been signed into law by Governor Andrew Cuomo (D). New Mexico’s legislature also passed adult-use legislation which awaits Governor Michelle Lujan Grisham’s (D) signature shortly. Lastly, Virginia Governor Ralph Northam (D) signaled that he wants the state’s new adult-use cannabis laws to go into effect sooner than originally anticipated. Keep reading below for a brief summary of what’s happening in each of those states, and what it means for federal policy.
New York
Last week, New York became the 16th state to approve a law creating a regulated adult-use cannabis market when Gov. Cuomo signed the Marijuana Revenue and Taxation Act (MRTA). This legislation would make possession of up to three ounces and limited home cultivation legal and will automatically expunge convictions for behavior that is legal under the new law. Notably, the new law also allows for cannabis consumption almost everywhere that tobacco consumption is allowed.
Equity was at the forefront of New York’s bill: forty percent of tax revenue will be directed toward communities disproportionately impacted by cannabis prohibition, and provisions in the MRTA seek to award half of all business licenses to social equity applicants. The importance of this can’t be overstated: nearly 60,000 people – the majority of whom are people of color – are arrested for marijuana violations in New York every year, the effects of which can permanently damage their ability to obtain employment, housing, and education, among other collateral consequences.
A 2020 report by Arcview Market Research and BDSA projected that the New York cannabis market will be worth more than $1.6 billion by 2025. The state plans to tax cannabis at 9% at the state level with an additional 4% made available to cities and counties, and with additional incremental taxes levied based on the type of product and the amount of THC contained in them.
New Mexico
New Mexico is now poised to become the 17th state to legalize adult-use cannabis upon Gov. Lujan Grisham’s signature. The legislature advanced two measures to the governor’s desk: the first legalizes and regulates cannabis possession, production, and sales for adults over the age of 21, while the second facilitates the automatic review and expungement of the records of those convicted of low-level marijuana offenses.
The state’s Cannabis Regulation Act allows for the possession of up to two ounces of cannabis for adults 21 and over, permits the home cultivation of up to six plants, and, unlike New York’s legislation, prevents local governments from opting out of retail sales. Legal retail sales are scheduled to begin in New Mexico on April 1st, 2022 (no jokes here!).
Marijuana Business Daily projects an adult-use cannabis market in New Mexico could generate $350 million in annual store sales by its fourth year of operation.
Virginia
You’ll remember that back at the end of February, Virginia’s General Assembly convened a special session where they passed adult-use cannabis legislation. The legislation detailed the regulatory and market structures for the state, outlined social equity provisions, repealed criminal penalties for the plant, and, perhaps most importantly, is subject to a second review and vote by the Assembly in 2022. Lawmakers also established a January 1, 2024 enactment date for the law, however, much of this is now in flux thanks to Gov. Northam.
Last week, Northam asked the General Assembly to speed up the legalization of marijuana in the state, making it lawful for an adult to possess up to one ounce on July 1, 2021, instead of waiting until early 2024. Additionally, Northam has proposed a quicker route for expunging marijuana-related incidents from criminal records and allowing home cultivation of up to four plants per household also as of July 1, 2021.
The Governor’s request is in the form of a proposed amendment to the legalization bill the General Assembly passed last month. It’s also important to note that Northam’s proposals include changes to several other aspects of the legislation. One would empower the Cannabis Control Authority — the new regulatory agency that will be created to oversee the industry in the state — to suspend the licenses of businesses that don’t allow workers to organize, pay less than a prevailing wage, or classify more than 10 percent of workers as independent contractors.
The General Assembly will take up these proposals when it reconvenes April 7 for a one-day session to consider any vetoes or amendments Northam has proposed to this year’s legislation.
What’s It All Mean?
Once New Mexico and Virginia’s cannabis legislation is signed into law by their respective governors, nearly 45% of Americans will live in a state with legal cannabis, and it could reach a majority before the end of the year. This has what I like to call a “trickle up” effect for members of Congress, meaning that federal legislators begin to pay much more attention to cannabis-related issues once these policies are passed in their home states. You can certainly expect more members to begin signing onto legislation like the SAFE Banking Act and signaling support for comprehensive legislation like the MORE Act and the upcoming Schumer/Booker/Wyden bill that have yet to be introduced but are highly anticipated. As always, the NCIA team in DC will continue to keep our finger on the pulse to keep you and your business informed!
State of the States – Cannabis Policy Reform in the Current Legislative Sessions
by Morgan Fox, NCIA Director of Media Relations
The last few weeks have seen quite a bit of excitement for the possibility of comprehensive federal cannabis policy reform being closer than it has ever been, but what about the states?
Historically, the vast majority of progress has been made at the state level, and this year is shaping up to be another one full of victories for legalization advocates as state governments struggle to support their economies, create new tax revenue and job sources, and tackle long-overdue criminal justice reforms.
The overwhelming approval by New Jersey voters of a referendum to make cannabis legal for adults last year has put the spotlight firmly on the Northeast and mid-Atlantic regions. With state legislative sessions already underway, a number of states are already prioritizing legalization much more heavily than in years past even as New Jersey lawmakers struggle to pass enacting legislation to carry out the will of the voters in a fair and equitable manner. It is pretty clear that New Jersey’s neighbors don’t want to be left behind when it starts reaping the benefits of regulated cannabis markets.
Early this year, New York’s Gov. Andrew Cuomo released a statement outlining his plan to make cannabis legal in the state, and just recently added amendments that would allow delivery, clarify the tax system, and reduce penalties associated with some cannabis activities. There are still some concerns with this plan, including the amount of funding that would actually go toward repairing the disparate harms caused by prohibition and the lack of legal home cultivation. Regulated cannabis in New York could be worth more than $3.5 billion and create more than 60,000 jobs, making it one of the largest state cannabis markets in the country.
Meanwhile, in Delaware, a legalization bill that was approved in the state House in 2019 is slated to be reintroduced by the sponsor in the coming weeks. This bill would come on the heels of a report released last month by the state auditor which estimated that Delaware could take in $43 million annually with a 20% excise tax, and create more than 1,400 jobs over a five year period. In what seems to be a disturbing trend in some state legislatures this year, this bill is not expected to initially include home cultivation either.
In Connecticut, however, a new adult-use bill has been introduced that would center on restorative justice and social equity in the industry and would allow adults to grow limited amounts of cannabis in their homes. This bill has strong support in the state legislature but may soon have to compete with Gov. Ned Lamont’s proposal, which is expected to be released soon.
Nearby Pennsylvania is likely to consider adult-use legislation this year, with Gov. Tom Wolf (along with the incredibly supportive and newly internet-famous lieutenant governor) urging lawmakers to address the issue and – earlier this month – calling it a priority for his state’s annual budget proposal. Rhode Island lawmakers are expected to consider legalization again this year as well, and with the departure of Gov. Raimondo, it is more likely that the emphasis will shift away from a state-run model and back to regulating private businesses.
Farther South, Virginia made headlines this month by becoming the first state in 2021 to have both chambers of its legislature approve adult-use bills. Lawmakers are committed to ironing out the differences between the two bills this month during an extended session. With Gov. Ralph Northam in full support, Virginia stands poised to become the 16th state overall to make cannabis legal for adults and the first state to do so in the South, and it would be only the third to regulate cannabis through its legislature.
Adult-use legislation has also been introduced in Maryland, with supporters and cosponsors optimistic that it could be passed this year, though lawmakers there are not as far along in the process as their neighbors in Virginia. And in medical news, advocates in South Carolina are taking another shot at passing a medical cannabis bill there.
There are signs of progress from elsewhere in the nation as well. After running out of time in an emergency session last year, New Mexico’s governor and lawmakers wasted no time in getting back to legalization efforts this year. There are currently several bills being considered, and it appears very likely that some form of adult-use will be approved there this year.
This is just a snapshot of the momentum and positive movement we are seeing at the state level this year. If you are interested in up-to-date information about all cannabis-related state legislation in the U.S., please consider subscribing to Marijuana Moment’sbill tracker.
Unfortunately, the news isn’t all good.
In South Dakota, where voters approved both medical and adult-use initiatives in November by wide margins, advocates have suffered a temporary setback on the adult-use front. After a pair of law enforcement officials sued to have the adult-use bill thrown out because it addresses too many issues for a constitutional amendment, a circuit court judge ruled in their favor earlier this month. This situation is extremely disheartening and outrageous: the will of the people was overturned by a judge who was appointed by a governor who not only actively campaigned against the ballot initiative but also paid for the lawsuit to overturn it with taxpayer money! However, supporters have appealed the decision to the state Supreme Court.
In Montana, where voters also passed an adult-use initiative in November, supporters are faced with another lawsuit on similar grounds that was filed by opponents. However, observers are skeptical of that suit being successful, and lawmakers are moving ahead with developing enacting legislation.
And in Idaho, where a medical cannabis initiative was prevented from getting on the ballot last year, prohibitionist lawmakers are moving forward with a bill that would prevent any future legislation to make cannabis or any other currently illegal substance legal. If passed, this bill would be put before the voters in 2022, where it could very well be on the same ballot as a medical cannabis referendum.
Despite efforts to overturn progress and maintain failed and harmful cannabis policies, things are generally looking up and we expect several states to pass laws to stop arresting cannabis consumers and establish legal, regulated marketplaces in the near future.
Oversupply and shortages, high prices and lack of choice for patients and consumers, illicit markets, tainted products, and the inability to access banking and capital all plague the burgeoning cannabis industry. While cannabis advocates and industry leaders are working on each of these problems, there is one solution that would ease the burden on all of them. Allowing for interstate trade between states with legal cannabis markets would improve each of these issues while supporting the individual solutions to each that the industry has been working on. This is the first post in a series that explores the benefits and barriers to setting up a legal framework for interstate trade, even before wholesale legalization at the federal level.
Since the beginning of legal, adult-use cannabis, when Colorado and Washington passed the first ballot measure allowing for adult-use, the industry was guided by the Cole Memo, which laid out the parameters for the federal government staying out of the states’ cannabis experiments. Among other things, the Cole memo stated that the DEA could crackdown on cannabis moving from states with well-regulated systems to states that do not allow cannabis. This statement has been interpreted conservatively to mean that no cannabis should cross state lines for any reason, ever, based on the fact that at the federal level, cannabis is still a Schedule I drug under the Controlled Substances Act.
Today, there are 10 states which have legalized adult-use, another 19 which allow for medical use, and six more which allow the use of CBD products only. Many of these states share borders, and producer states could serve several nearby markets without ever entering a state that does not allow cannabis in any form. Furthermore, the Cole Memo, which was rescinded by Jeff Sessions in 2018, has not been replaced by any guidance whatsoever. This means that each U.S. Attorney’s office is free to set their own enforcement priorities around state-legal cannabis activities, and there is no official overriding policy at the DOJ on interstate trade between states with medical or adult use. Corresponding guidance from FinCEN, however, remains in effect and similarly discourages the transfer of cannabis between states.
Cannabis markets vary widely from state to state with regard to the underlying market dynamics and challenges that they face. Some states produce too much while other states experience shortages. Meanwhile, new states pass legislation or have voter initiatives that allow medical or adult-use every year without any infrastructure in place to supply that state’s demand. In each new legal market, the vast majority of demand had long been met through illicit market supply, and generally from outside of the state’s boundaries.
The artificial boundaries around cannabis markets have far-reaching impacts for local economies, patient access, illicit market activity, and social equity. Later posts in this series will take a deep dive into each of these issues, and in this post, we will look at how this has impacted states, the industry, and consumers so far.
Lessons Learned:
Washington State chose to take the strictest possible reading of the Cole Memo, and insist that not only must cannabis not cross state lines but also sources of funding must come from within the state. Combined with their high capitalization requirement for licenses, the result was a disaster from an equity standpoint: only wealthy and well-connected individuals in the state (which are overwhelmingly white males) were able to even attempt a license. This decision was based substantially on the fact that interstate trade was not allowed.
In Oregon, which has an ideal growing climate and a long tradition of exporting cannabis (albeit in the illicit market), the artificial boundaries created by the ban on interstate trade lead to a massive oversupply for its small population, which crippled the industry and tanked many small businesses. Despite the fact that Oregonians consume more cannabis per capita than any state, their climate and culture have led to growing massive quantities of world-class cannabis that cannot reach patients and consumers, even in neighboring states that might have under-supply issues. The result is that hundreds of small, mom-and-pop shops and family farms have gone out of business, eradicating millions of dollars of local capital, and accelerating mass consolidation of the industry into the hands of a few foreign corporations. Meanwhile, in medical markets like Illinois and Michigan, patients have had sporadic access to quality cannabis-based medicines.
When Nevada originally launched, due to the influence of local liquor distributors, it was almost impossible to get products to market, and the state’s dispensaries sold out on the first day of sales. After ironing out some of the kinks, sales are going strong, but the practice of growing thirsty plants indoors in the desert is of dubious value when the same plant can be grown with a fraction of the inputs in northern California and southern Oregon.
California’s legal system is a perfect example of how over-regulation fuels illicit market activity. Because of the structure of their regulatory framework and high taxes, the state is served by only 800 licensed dispensaries, whose prices are double and triple those found on the illicit market for similar products. This has led to the emergence of thousands of “pop-up” or unlicensed dispensaries, selling untested products tax-free in a thriving illicit market. The booming illicit market in California has also led to massive wholesale markets of hardware, branded packaging, and flavoring and cutting agents (all technically legal) to supply the illegal operators with everything they need to look legitimate. This is a major contributing factor to the wide-spread vaping related illness cases popping up all over the country, as many illicit market operators purchase their supplies in downtown Los Angeles.
The ban on interstate trade promises to continue to create new and novel problems as well. If New York, the 4th most populous state in the union, legalized adult-use (which seems likely in the near future), and interstate trade were still banned, it would require a massive investment, on the order of billions of dollars, to create enough indoor and greenhouse grow facilities to supply the demand created by its 19 million inhabitants. The recent legalization of hemp under the last Farm Bill has created a number of legal dilemmas as well, as some individual states that do not recognize any difference between hemp and cannabis flower have seized products and arrested individuals taking hemp legally grown in one state to a market where it is legal to sell.
Some suggest that these issues will be sorted in local markets, and in each state individually this approach might seem to make sense. When you add these problems together, though, a much more elegant, efficient, and obvious solution emerges: let states that have always exported cannabis send it to states that have always imported it. A set of different and seemingly unconnected problems become each other’s solutions.
Historically, people across the country have consumed cannabis, and the vast majority of it was grown in a few locations that are particularly well-suited to the plant. It is highly likely that a fully-matured nationwide legal market (one which must account for not only interstate, but also international competition) will ultimately be best served by the same general market dynamics. The only question is: how long will we allow the artificial market boundaries around each state to decimate local capital, curb access for patients and consumers, encourage investments that are attractive short-term but disastrous long-term, and prop up the illegal markets that pose a public health risk?
Interstate trade between states that allow some form of legal cannabis would provide much-needed relief on a number of fronts for cannabis businesses, and could be structured in such a way to support social equity efforts. With a little guidance on enforcement and thoughtful programs and agreements between states, there is a path to legal interstate commerce even before cannabis is removed from the Controlled Substances Act. The state of Oregon has already passed legislation allowing for the export and import of cannabis products provided that the Federal Government allows it. This could be either through legislation such as the proposed Blumenauer/Widen State Cannabis Commerce Act, or though DOJ enforcement guidance (whether from the Attorney General or the relevant local U.S. Attorney’s). There are multiple paths that can lead to the end of banned interstate trade, and it seems increasingly inevitable that we will see legal cannabis trade across state borders in the near future. For most operators in the cannabis industry, and for all patients and consumers, this will be a good thing, and can’t come soon enough.
Gabriel Cross is a Founder and CEO at Odyssey Distribution, LLC, a distributor for locally-owned craft cannabis producers and processors in Oregon. Gabe worked in the sustainable building industry for a decade before starting Odyssey and brings his experience with sustainability and systems thinking to his work in the cannabis industry. Odyssey manages logistics, sales and marketing for boutique producers so they can focus on creating great craft cannabis products for the Oregon market.
VIDEO: Member Spotlight With MedMen
In this month’s NCIA member spotlight, we visit with MedMen at their Santa Ana, CA, dispensary location. MedMen has grown to more than 18 storefront locations across California, Nevada, and New York, and currently employs more than 800 people. Co-founder and CEO Adam Bierman, along with co-founder Andrew Modlin, launched the company nearly a decade ago. Watch this video to learn more about MedMen.
“I don’t think we can expect to ever live out something like this again in our lifetime.”
– Adam Bierman, MedMen CEO and Co-founder
2016: What’s Next?
by Michelle Rutter, Government Relations Coordinator
This year is arguably the most crucial yet for the burgeoning cannabis industry, especially as it relates to policy. Although NCIA primarily advocates for cannabis reform at the federal level, what happens in each individual state is vital to the stances Members of Congress take on our issues.
Members of Congress care deeply about issues that directly affect their specific state or district. It’s imperative that more states enact cannabis reform legislation so that more Members have a vested interest in protecting their constituents. While cannabis reform is sweeping the nation at an almost unprecedented rate, it takes time for politicians in Washington, D.C., to catch up with public opinion back home. If all of the federal lawmakers representing just the 15 states mentioned below were to vote positively on pro-cannabis legislation, it would add up to more than 180 Representatives and nearly 30 Senators.
Take a look below and see what’s coming up next in 2016. Remember that by becoming a member of NCIA, you are adding your voice to the coordinated and unified campaign at the federal level to allow cannabis businesses access to financial services, fix tax section 280E, and ultimately end federal cannabis prohibition.
The United States of Cannabis
Arizona activists remain ahead of schedule and have nearly gathered the 150,000 signatures needed to put the state’s Campaign to Regulate Marijuana Like Alcohol initiative on the November 2016 ballot. (The campaign ultimately aims to collect 230,000 in order to insure against signature drop-off.) It’s estimated that Arizona’s adult-use market could be worth up to $480 million.
With a multi-billion-dollar cannabis industry in California alone, passing an adult-use legalization initiative in the state is vital to ending federal prohibition. The most prominent full retail initiative gathering signatures for the November 2016 election is the Adult Use of Marijuana Act, which is backed by billionaire Sean Parker and the Marijuana Policy Project.
Legalize Maine and the Marijuana Policy Project have joined forces to legalize adult-use cannabis in 2016. Legalize Maine has already collected 80,000 signatures. Only 61,000 signatures are necessary to place the measure on a statewide ballot, but the organization’s goal is 95,000, to insure against drop-off. The deadline to submit signatures is February 1st.
Last August, a pair of cannabis advocacy groups separately filed paperwork to get adult-use legalization on the 2016 ballot in Massachusetts. The state recently confirmed that a measure to legalize recreational cannabis next year has enough valid signatures to force the legislature to consider the measure. If the legislature decides to pass, then the campaign will have to collect another 10,792 signatures to formally make the November ballot.
There’s no question that adult-use legalization will be on the ballot this year in Nevada. Initiative Petition 1, which would tax and regulate marijuana similarly to alcohol, has been certified for the 2016 ballot. Backers had previously collected nearly 200,000 signatures to either force legislators to enact their initiative or put it on the ballot. When state lawmakers abstained from voting on the issue, the measure was automatically forwarded to this year’s ballot for a popular vote.
In Florida, the group United for Care received clearance from the state Supreme Court for a 2016 ballot measure that would legalize medical marijuana. The group nearly succeeded in legalizing medical marijuana in 2014, garnering 58% of the vote but falling barely short of the state’s constitutionally mandated 60% margin needed to pass,
The nation’s capital continues to debate cannabis. In December’s federal budget bill, the taxation and regulation of marijuana in Washington, D.C., was blocked by Congress again, though possessing and gifting cannabis remains legal in the city.
This month, Hawaii will begin accepting applications for medical cannabis businesses. The bill signed into law last summer opens the door for up to 16 dispensaries on the islands.
It was recently announced that Illinois saw approximately $1.7 million in medical cannabis sales during November and December of 2015. There are already petitions being circulated in the state that would expand the law’s qualifying conditions.
Maryland will award cannabis cultivation, processing, and dispensary licenses this summer. Industry advocates were pleased with the amount of interest the state’s program garnered: more than 1,000 applications were submitted.
Officials in Michigan have approved language for three different adult-use cannabis legalization initiatives for the 2016 ballot. In order to have the best chance of passing, it’s important for these groups to coalesce behind one initiative.
At the end of 2015, New Hampshire began issuing medical marijuana cards to qualifying patients. It’s expected that the state will open medical dispensaries in 2016.
After a long and arduous journey, New York’s medical cannabis program became operational this month. The cannabis industry expects the program and the law’s qualifying conditions to expand this year.
In the first week of 2016, Oregon began accepting adult-use cannabis business license applications. The state has no limit on how many licenses they will decide to award.
Vermont may become the first state to legalize adult-use cannabis through the legislative process in 2016. The proposed bill would allow for up to 86 storefronts and five different business license types.
Bonus: Election 2016 – Yes, We Canna
As we all know, a new president will be elected this November, and with that a new administration will assume power next January. It is very crucial that Congress pass more pro-cannabis legislation before then.
It’s probable that Attorney General Loretta Lynch will be replaced in 2016 or early 2017. This is important because it is the Department of Justice that enforces and prosecutes federal marijuana laws.
Another possibility for 2016 is that the acting head of the Drug Enforcement Administration, Chuck Rosenberg, could be replaced as well. Rosenberg is notorious for his gaffe last year when he called marijuana “probably” less dangerous than heroin.
On New Year’s Eve, officials from the Substance Abuse and Mental Health Services Administration posted a notice on the Federal Register that calls for a report “presenting the state of the science on substance use, addiction and health” to be released in 2016. Industry advocates are hopeful that this report could be the first sign of re- or de-scheduling cannabis from the Controlled Substances Act.
During 2016, NCIA will continue working with D.C.-based public affairs firms Heather Podesta + Partners, and Jochum Shore & Trossevin PC to magnify our efforts to address the industry’s top federal priorities: access to basic banking services and fair federal taxation.
In addition to NCIA’s lobbying and advocacy efforts, NCIA exists to connect and educate our members on all facets of the cannabis industry. Our industry supports tens of thousands of jobs, tens of millions in tax revenue, and billions in economic activity in the United States.Our core mission is to ensure that our members are treated like businesses in any other American industry. Join NCIA today to get involved and be a part of the cannabis revolution!
by Mike Lomuto, NCIA’s DEI Manager
Andrew Kaye has been involved in all aspects of the financial services industry, as a fund portfolio investment manager, investment banker, family office investor and attorney. He has worked with start-ups on their first raise through global enterprises undertaking billion-dollar stock offerings, and has significant investment experience in the cannabis industry. Currently, Andrew works as Sweet Leaf Madison Capital’s Chief Commercial Officer. Lending his expertise toward the creation of middle market financing solutions for real estate and equipment financing needs in the cannabis space.”
Gary Cohen is the CEO of 
NCIA’s editorial department continues the Member Spotlight series by highlighting our 
I am a first-generation Latino of Colombian descent, Spanish was my first language and my dad spent most of my youth incarcerated. I grew up in NYC Public Housing projects, and I have first-hand knowledge of the indignity of what it feels like to personally be stopped and frisked nearly 100 times which is what happened to me as a kid and young adult for doing nothing else than being a poor Latino growing up in the hood. I was an Education Opportunity Fund scholar and the first in my family to go to college, where I received a degree in business, and a graduate certificate in law. I earned the designation of Disabled Veteran while serving in Iraq with the United States Marine Corps, and I am also a 9/11 first responder. I retired after a career in public service, and have worked as an entrepreneur for over 10 years, and know what it takes to start a business from scratch, without a rich uncle, generational wealth, or rich financial backers. 
Latinos are consistently underrepresented in terms of business owners throughout all industries. Now when you focus specifically on cannabis and look at a national level, just 5.7% of all license types are held by the Hispanic community. I have seen challenges in the cannabis industry in two key areas, access to capital and the real estate market. It takes money to make money so if you grew up poor, without generational wealth, no rich uncle, no hedge fund connections or oligarchs to call on, how do you raise funds to have the millions that are needed to launch a dispensary or grow? Next and along the same lines is real estate. A lot of landlords won’t lease to cannabis businesses but unfortunately, our experience has been that again a predatory market exists where cannabis rental rates are 2 to 10 times the normal lease rates for the area. The other option is to buy a commercial parcel which brings us back to issue #1 – access to capital. I am ever the optimist, and I see the Latino community growing in the legal cannabis industry as entrepreneurs, c-suite members, and as leaders in the industry bringing our unique insight and sabor to the industry while creating opportunities for generational wealth for our community. In order to get there, we need to bridge the gap through social equity grants and loans that can help Hispanic cannabis entrepreneurs raise enough capital to start their business, and receiving financial education is also crucial for Hispanic entrepreneurs in multiple phases of the cannabis business planning timeline.
By Jodi Green, Miller Nash LLP; Shay Gilmore, The Law Office of Shay Aaron Gilmore
by Madeline Grant, NCIA’s Government Relations Manager
Charles J. Messina
Jennifer Roselle
Donald W. Clark
The last few weeks have seen quite a bit of excitement for the possibility of comprehensive federal cannabis policy reform being closer than it has ever been, but what about the states?
Gabriel Cross is a Founder and CEO at 
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