How New York is building its legal cannabis business

Nearly a thousand applicants applied to obtain one of the first 150 permits that would allow them to sell any type of cannabis-derived product. Created to arbitrate the industry, the regulator plans to issue licenses before the end of the year, under the name Office of Cannabis Management (OCM for English abbreviation).

It is the beginning of a business that can produce. 1.3 billion dollars According to calculations made by the City Controller in charge of the accounts, it will generate income in its first year and create up to 24,000 new jobs over the next three years.

The state’s public coffers can collect around $3,100 million (3,126 million euros) per year. Those are very optimistic estimates compared to the $4,000 million tax levied by California, the first U.S. market since legalizing marijuana in 2018, according to the Department of Tax and Duty Administration (CDTFA).

The delay in licenses did not prevent the start of work. Impatience caused widespread street vendors and opening a few clubs cannabis that exchanges its products for membership. “We came here because they didn’t offer licenses,” a couple say at their booth in Washington Square Park, the epicenter of the city’s private market, “call us Scott and Daisy.”

Decriminalization is a fact. Therefore, the authorities have turned a blind eye to unlicensed sales for now. The situation is expected to change once the dispensaries become operational. The industry regulator has already warned that those who continue to sell without authorization will face fines and possible criminal prosecution.

The riskiest ones benefited from renting buildings, setting up shops and waiting to get everything ready to move on. This is the case of the Empire Cannabis Club, which has two locations in Manhattan operating as a street-level club with careful design decoration. “People like us are turning the entertainment market into a replica of the medical market before they even get a chance to step in,” warns the store’s co-owner, Lenore Elfand.

Priority to convicts

The fear of those already investing in the business grew when they saw the money the Administration had given. priority licenses granted to persons with prisoner (or their relatives) for cannabis-related offenses. Also, as it will be the organizer who chooses the buildings, negotiates the rents and then hands over the keys to the winners. A development that could eliminate the possibility of the industry not including their facilities on the list.

Promoted by New York governor Democrat Kathy Hochul, the regulation aims to compensate minorities – particularly among the black and Latino communities – who have been affected by the harshness of the War on Drugs policy promoted during the Administration since the 1970s. by Richard Nixon.

An innovative approach compared to 17 other US states that regulate the marijuana trade. “People who have been in this market for the past 15 years deserve to stay,” says David Holland, president of the New York Cannabis Industry Association, which was involved in establishing the industry.

The decision to prioritize convicts “defies the whole business model” designed by major manufacturers, adds Holland. Legalization of weeds in New York was always conditional on amnesty, pardoning punishments. 400,000 people. This amnesty came less than a month before the November midterm elections, before US President Joe Biden’s pardon given to all prisoners in the country for this reason.

couple selling weed He fulfills the main requirement as the owner of the club in Washington Square. “I got two years to smoke in the street,” Scott says. “In the ’60s, my uncle was killed while buying weed in the Bronx. My brother spent 10 years in federal prison for farming,” says Elfand. None of them are sure they can get the license they had to pay $2,000 to process.

public-private fund

The state should establish a policy to develop the fair market that is being monitored. 200 million dollars lending to new owners. The first $50 million came out of the public piggy bank and the rest is in full collection from private investors. Entrepreneurs of the future must also be successful in a business that may be modest, such as a tobacconist or a grocery store.

According to an industry report, the network is predicted to reach around 900 retail licenses and generate revenue of $4.2 billion by 2027. “We’re getting the cannabis industry started the right way,” says Chris Alexander, Executive Director of the Office of Cannabis Management. Currently, 22 locations will be deployed in Manhattan, 20 in Long Island, 19 in Brooklyn, 16 in Queens, 10 in the Bronx, and 3 in Staten Island.

The step before licensing was to ensure there was sufficient supply. Federal law requires retailers to source only from in-state growers. That’s why, last August, New York City granted the first permits to 15 cannabis farms in the area. “When we open the first stores, the shelves will be filled with all kinds of quality products, including edible gums, topical creams and concentrated oils,” said Tremaine Wright, chairman of the Cannabis Control Board.

An average dispensary $1.8 million profit According to Statista’s research, his income is $3 million. According to data published by specialist cannabis medium MMJ Business Daily, 15% of stores in the country are under $100,000 in 2021, 27% have between $100,000 and $250,000, 15% are between $500,000 and $1 million, and more than a quarter have annual revenue. declared. one million.

Despite its juicy benefits, the capital of the world wants to be a benchmark in the development of the fair cannabis market. Experts are cautious about the result. “Time will tell if this microbusiness concept works,” Holland says. At this time, it is unknown whether future licenses will keep priority for convicts.

Those responsible for developing the market remain optimistic about this new legal framework, which they call the market. “post-prohibition period”citing the Dry Act of the 1920s, which pushed Americans to drink in secret bars while the mob earned gold by smuggling alcohol.

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