Last-ditch effort to provide relief to growers better than no plan at all
Kudos to New York state’s Office of Cannabis Management for its eleventh hour effort to let licensed growers move their marijuana through sanctioned farmers markets beginning this summer.
The governor’s office, which a generation ago would be allocating resources to prosecute dealers and consumers, today recognizes that Empire State voters and visitors overwhelmingly favor more access to more weed at more times.
It’s always been this way. I’ll never forget the fragrance of Washington Square Park as an NYU grad student in the nineties, nor the code I needed to supply my delivery guy (JB116) who would arrive with a backpack full of kind bud in 90 minutes or less.
In no other state east of the Mississippi River (except perhaps Michigan) is the legacy market for cannabis stronger than New York. Unsanctioned cannabis marketplaces and unlicensed storefront retail outlets are the norm rather than the exception in a state that will have less than 25 of its 300 conditional adult-use retail dispensary (CAURD) licenses operational by midyear.
Grown In readers familiar with the cannabis programs in Illinois and other mostly northeast blue states that expanded to adult-use in recent years can empathize with such a paltry percentage of social equity licensed retailers opening up their doors years after adults were given legal permission by the state to consume.
State industry adult-use expansion laws with the progressive intent of allocating commercial licenses to individuals most disproportionately impacted by the war on drugs, in the most generous of interpretations, have not as of yet been implemented with fidelity. In Illinois, a pioneer of such programs, less than 10 percent of the hundreds of social equity retail, manufacturing and cultivation licenses awarded since the adult-use law was passed in the state in 2019 are operational.
While skeptics will point to that math and declare those and other programs with similar results a failure, there is no precedent for states creating commercial markets for federally illegal products at the scale of cannabis. All 38 states with legal cannabis struggle at this arduous task. This rationalization, however, is weak tea to the owners of mostly minority-owned businesses in which these programs were designed to empower and who today are left holding the dime bag (or in New York millions of dime bags)
The innovative idea coming out of New York Governor Kathy Hochul’s administration to regulate commercial cannabis sales at farmers markets is rooted in the fact that approximately 200 licensed New York farmers are sitting on hundreds of thousands of pounds of unsold weed. There are not enough licensed retail outlets to absorb that quantity. Many of those farmers are debating as to whether to even plant another crop in 2023 as they were expecting many more than 20 dispensaries to be open by now when they incurred the cultivation cost last year.
In an effort to provide some relief and perhaps grab some headlines at the end of a legislative session, New York’s Office of Cannabis Management proposed a solution that could start in a matter of weeks enabling a minimum of three licensed farmers to team up with a CAURD to find a location and get rolling. The New York State Fairgrounds, state-owned property, is a potential venue.
While farmer advocates applaud the chutzpah, they concede that the farmer’s market plan is “not fully vetted” and may be no more than a “band aid”. An executive with a vertically-integrated multi-state operator that is one of a small handful of mostly corporate “registered organizations” licensed to sell medical cannabis in New York – but at this point not allowed to participate in the state’s adult-use program – said that the state is trying “to be cute and clever with this but is mostly just grasping at straws.”
The biggest winners of New York’s adult-use expansion at this point are legacy retailers who, despite proposals by the state to crackdown on their operations, continue to sell cannabis in plain sight. Proceeds from the state’s $200 million Cannabis Social Equity Investment Fund have not been allocated to enough of the CAURDs to provide a meaningful alternative for consumers. A press release from the Office of Cannabis Management this week indicated a series of modifications to the fund to “better fit some CAURD licensees’ business models.”
Cannabis corporations, many heavily invested in the promise of a multibillion dollar adult-use market in New York, are hemorrhaging cash. The inability to expand their operations in New York may become an existential challenge in a tough economic climate for operators across the board. A lot of industry jobs are at risk.
While the idea to allow for legal cannabis farmers markets in New York may be no more than a pipe dream, the state deserves credit for recognizing the scope and complexity of the problem and proposing a solution that gives more legal access to more consumers in more environments. Ambitiously half-baked ideas, at this stage, are better than no bold thinking at all.
And in New York, if you can bake it there, you can bake it anywhere.
