🎯 Hochul aims at big tech

🤜 HOCHUL VS. BIG TECH 🤛
NY governor announced more steps to crack down on illicit dispensaries

Driving the news: Cultivated readers surely know that legal dispensaries want the state’s government to do something — well, anything — about the proliferation of unlicensed cannabis shops in New York City.

Earlier this week, New York cannabis businesses asked Governor Kathy Hochul to go after Google and Meta for listing illicit dispensaries on their platform, which they say diverts valuable consumers away from the legal market. 

Yesterday, Hochul listened: In a press conference with cannabis business owners, Hochul directly called out the tech giants for listing illicit dispensaries, and announced a host of changes that would broaden the Office of Cannabis Management’s (OCM) powers to shut down illicit shops. 

Hochul also announced a host of measures through the state’s budget process that would give more enforcement power, including allowing the OCM to issue “padlock” orders, which would expedite shutting down stores. 

You can watch the whole press conference here. 

What she’s saying: “The role of social media, and the big tech companies, right now they’re allowing the sowing of a lot of confusion in the marketplace,” Hochul said, flanked by cannabis industry representatives. “We hope customers will want to buy safe, tested products from licensed dealers.” 

Hochul showed live that when you search for cannabis or marijuana in your phone, unlicensed dispensaries show up — with no way to tell what’s legit and what isn’t. However, she stopped short of calling for a lawsuit against the tech companies, though her rhetoric was clear.

Remember, Hochul earlier this month called the rollout of legal cannabis in New York a “disaster.” 

Why it matters: The pervasive illicit market is one of the key reasons why legitimate New York cannabis businesses are struggling (though, yes, there are plenty of other reasons as well). It’s hard to compete against stores that don’t pay taxes, and don’t need to put in the time and financial resources to comply with New York’s cannabis regulations. 

What’s next: Until recently, the OCM had few enforcement powers, and not nearly enough staff to put a dent in the state’s out-of-control illicit market. With Hochul’s very-public recognition of the problem, this might start to change. 

Hochul seems to understand the problem. It remains to be seen whether this is successful, or more changes are needed. 

-JB

“It’s an existential thing,” Ellis Soodak, the manager of Verde, a cannabis shop in New York City, told New York Cannabis Insider in a story about the challenges legal dispensaries are facing in the state. “The fact of the matter is: unless the government does something very significant in the next few months, we are going to see stores close.”

Dutchie, a cannabis tech firm, has a new report out looking at cannabis consumer trends. One key takeaway? Total item sales increased, but dispensaries offered more discounts, meaning revenue stayed mostly flat last year.

Eighty-six percent of cannabis companies are expecting to expand hiring this year  — a notable finding with all the recent layoffs inside and outside the cannabis industry — according to the cannabis recruiting company Vangst’s 2024 Cannabis Industry Salary Guide. 

Virginia’s legislature is finally sending a bill that would legalize cannabis sales in the state after weeks of back-and-forth negotiation, Marijuana Moment reports. Republican Governor Glenn Youngkin may still be a question mark, however — he previously said he doesn’t have any interest in legalizing sales, but hasn’t said he’d veto. 

Cannabis tax revenue in Canada outpaces beer and wine, reports MJ Biz Daily. The government pulled in nearly $900 million CAD from cannabis-related excise taxes, compared to $610 million for beer, and just under $280 million for wine. 

Residents of Highland Park, New Jersey filed a suit trying to stop the town from allowing cannabis sales arguing that the sales violate federal law, reports Law 360. This could get interesting. 

Australia’s annual drug use survey found that 41% of the country’s population, or nearly 9 million people, have consumed cannabis. Forty-five percent of Australians support legalization. You can see the full results here.

White couple at center of social equity lawsuits in multiple cannabis markets | MJ Biz Daily

Good weed hunting | Alta

Green Thumb Industries kicked off cannabis earnings yesterday as other multistate operators get set to report over the next two weeks. GTI reported $3.2 million of net income on $278 million of revenue for  the fourth quarter, up from a net loss of $51.2 million the year prior. The company drove over $1 billion in revenue for the full fiscal year.

Analyst Pablo Zuanic of Zuanic & Associates says he expects executives to focus on upcoming catalysts — including new state markets opening up, and potentially rescheduling on the horizon, rather than on the quarter itself. Read his entire earnings preview here.