Three years into legalization in New York

NEW YORK, NEW YORK
Three years into legal cannabis in New York

Driving the news: Since the Marijuana Regulation and Taxation Act (MRTA) passed in New York over three years ago, the state’s legal cannabis market has mostly been in turmoil.

The chief regulatory agency, the Office of Cannabis Management (OCM), has been criticized endlessly for rolling out licenses too slowly. Its executive team has been shaken up multiple times and investigated by Gov. Kathy Hochul’s office. 

And the state is still contending with thousands of illicit, untaxed, and untested cannabis sellers, though more legal stores are opening up every day. 

But things are finally starting to turn around in the Empire State, according to a new report released by the OCM last week. 

The headline numbers: Cannabis retailers in New York sold nearly $654 million worth of pot since the market opened in January of last year. 

There are 202 retail stores open across the state, out of 1,342 total licenses issued. And, 67% of New Yorkers who consumed cannabis in the past year indicated they purchased from legal stores. 

On the enforcement side, the state has investigated 1,341 locations, issued 1,135 violations, and seized nearly $120 million worth of illicit products.

Social equity struggles: The MRTA is perhaps the most ambitious cannabis law in the US with a specific focus of repairing the harms of the War on Drugs. There’s a clear reason: From 1980 to 2021, Black New Yorkers were 15 times more likely to be arrested for cannabis than white residents. 

But progress toward these social equity goals have been difficult. On the positive side, over 54% of the state’s cannabis licenses have been awarded to social and economic equity applicants. And 205 Conditional Adult Use Retail (CAURD) licenses have been awarded — but only about 150 have opened their doors so far.

And only about 20 CAURD license-holders have taken advantage of the state’s $200 million Cannabis Social Equity Fund. 

Many of the CAURD license-holders say access to capital or small business loans remains a key challenge, and one that’s tough to solve under federal illegality. The state has called for more grants and low-interest loans to help these businesses get on their feet. 

Beyond that, the state says that there are no individuals incarcerated in New York with only a cannabis-related offense and that over 200,000 convictions have been sealed.

The final word: New York’s ambitious program had a tumultuous start, to say the least. And without federal reform, access to capital will continue to be difficult, especially for social equity-aligned businesses. 

But there are lots of positive signs that the ship is turning around. Despite all the challenges, we’re still bullish on the future of New York cannabis, from the culture, to the products, to the entrepreneurial spirit in the industry here in the world’s greatest city. 

The excitement at this past weekend’s Revelry Cannabis Festival was palpable. 

And we’re also hopeful that policymakers and other industry stakeholders will learn from the missteps of the last three years. Evidence, data, and cogent, respectful debate make for better policy, a stronger industry, better public health outcomes, and ultimately more jobs, tax revenue, and great products for everyone to enjoy. 💪 

Read the full report.

- JB

Cannabis firm Ayr Wellness restructures 🏗️

Cultivated exclusive: Multistate cannabis firm Ayr Wellness is retooling its executive team, a few weeks after president and CEO David Goubert stepped down from his role in September, a company spokesperson told Cultivated:

• Jamie Mendola and Julie Winter were each appointed interim co-Chief Revenue Officers, responsible for all revenue activities in their regions, including marketing, purchasing, and retail.

• Mendola will be responsible for the West, while Winter will be responsible for Ohio and the East.

Winter and Mendola will work closely with Chief Operating Officer George DeNardo and report to interim CEO Steve Cohen. 

What they’re saying: “In a long and varied career, the key thing I’ve learned is that, once you identify your leadership team, you need to put those people in the position to do what they do best. Jamie and Julie, and our COO George DeNardo, have been our revenue leaders. They know the industry, and they know AYR,” Cohen said. 

Back up: Winter joined Ayr in 2020 and led the buildout of Ayr’s operations in New Jersey, Ohio, and Pennsylvania, where she’ll continue to focus. Mendola joined Ayr in 2019 and previously served as the general manager of the Western Region. Before that, he led business development for Ayr, including M&A and market expansion.

“Cannabis should not have a free pass as something that is safe because it’s legal — or safe because it’s natural — because actually it clearly causes harm in a number of my patients,” Dr. Scott Hadland told The New York Times, in a big new investigation into the harms of cannabis use.

The story proved controversial in the cannabis world, to say the least, for its focus on the harms of use and its reliance on self-reported survey data. However, though many experts in the story discussed what they say are the dangers of cannabis use spreading with more liberal laws — the majority still favored legalization and regulation over prohibition. 

Read the story here, and email us back to let us know what you think. We’re particularly interested in hearing from psychologists, doctors, and scientists who research related issues.

Eaze is reportedly winding down operations 📉

Eaze, once one of the largest venture backed cannabis firms, reportedly informed employees it planned on winding down operations, reports Kron4. Eaze raised over $250 million as a cannabis tech firm before pivoting to delivery and owning and operating dispensaries themselves. Note: We haven’t independently confirmed this report.

The Cayman Islands is holding a vote on easing cannabis law 🐠

The Cayman Islands, in the Caribbean, will hold a referendum on whether to turn the possession of personal amounts of cannabis from a crime — punishable with up to a year in prison — to a minor offense like a traffic ticket. The Cayman Islands legalized medical cannabis in 2017. 

GTI employees have ‘buyer’s remorse’ over joining union 🌿

A group of employees at the Illinois-based Green Thumb Industries filed a petition to remove the United Food and Commercial Workers’ “monopoly” representation over them, per Green Market Report. Many of the employees say they’d be better off without a union. 

New Jersey bill will let people bar themselves from dispensaries  👀

A new bill proposed in New Jersey would let people bar themselves from entering dispensaries — a public health measure the state borrowed from gambling, reports The New Jersey Monitor. It’s aimed at those suffering from addiction, though some experts say cannabis doesn’t present the same addictive harms as gambling. 

New bill would prevent housing discrimination for drug users 🛑

A new bill filed by Sen. Cory Booker and Rep. Maxwell Frost would overturn the decades-old federal statute that has denied housing to those convicted of cannabis and other drug offenses, Marijuana Moment reports.

Altitude Cannabis Club is applying for a license to open a dispensary in the 116-year-old historic Greenpoint Savings Bank in Brooklyn, reports Gothamist. The building has been unoccupied since 2020. The local community board will hold a hearing on Tuesday.

Cannabis improves mental health in older adults 🌿

A new working paper from the National Bureau of Economic Research found that medical cannabis availability in New York reduced past-month self-reported poor mental health days by nearly 10% among adults 65 and above. The authors say these results suggest medical cannabis access has positive health impacts for older populations, likely through pain relief. Read the study here, and the Cato Institue’s coverage here.

New York state has sold almost $654 worth of cannabis since legal retail sales began in earnest in January of last year, according to the state’s. August was the largest sales month on record, with $97.4 million of sales.

Read the state’s full report.

Jeremy had a fun time meeting some New York cannabis brands, both new and old, and “testing” products at the Revelry Buyer’s Club on Friday. We couldn’t be there on Saturday but heard it was an awesome time!

Thanks to the team at On The Revel for putting on a great show every year — and we’re always supportive of innovation in the New York cannabis community!

Don’t fall for the politician-led lies about legalizing marijuana in Florida | Tampa Bay Times

‘It took over everything’: Stories of marijuana’s little-known risks | The New York Times

A new era for cannabis and what it could mean for you | Chasing Life with Dr. Sanjay Gupta

Hemp madness: Why the government is waging war against marijuana's legal cousin | Forbes

Some vapes claiming to be cannabis contain ‘synthetic cannabinoid’ – study | The Guardian