Big Summer Issue! How to Grow a Hospitality Group Webbie!!

Originally Published : July 21, 2022

Dear HL Clients and Friends,

Well, it’s summertime and the livin’ ain’t easy. Monkeypox and mass shootings and melting Europe and impending civil war and the new and improved BA suite of shapeshifting covid variants and just everything.  But hey, we can celebrate a few hundred dollars less that we now have to pay in liquor license surcharges every few years. Whoop dee doo.

And what a pathetic ordeal with the death of the Restaurant Relief Fund in the Senate. From the DC Dummies not passing it to the totally lame and limp lobbying campaign by the National Restaurant Association and the IRC and everyone. The situation was (is!) dire for many restaurants and it called for strikes and marches and impactful protests, not plaintive pleas and tepid talking points. If any industry could have made a scene and gotten some airtime, it should have been ours. We know how to make noise and our industry is huge for crying out loud! But alas, no. Hospitality industry leaders had to learn the hard way that the only way to get the Dummies down there to do anything is to create political pressure and the industry just whiffed badly on that front. Boy, are we in dire need of an aggressive national lobbying organization for the industry. Mr. Rigie, Ms. Mix, Ms. Cohen anyone?  We need an ass-kicker to get into the fight right about now.

And how should we be reacting to stage 1 of the recession?  Of course, we worry that people won’t have extra money to spend on dining and drinking and polls suggest its trending that way, yet we still see people throwing down to have a goddamn good time blowing caviar lines and inhaling Carlyle sized dirty martinis. Let’s just hope that well doesn’t totally dry up as the recession creeps in.  But, the good news is that a recession might just be the break that the industry needs to get people to return to work in our restaurants.  With the government covid cash gone and savings drained and tenant evictions laws lapsed, hospitality people are going to have to start paying our crazy NYC rents again and I expect them to start returning en masse in the near future,  It’s a weird tradeoff I know but trying to look on the bright side.

And then there’s the overturning of Roe.  My professional opinion as an attorney and member of the Bar was that the decision by Sam and the Supremes was some f*&% ed up shit. There is no other way to say it.  So now we have no constitutional privacy rights at all?  Now, the States get to make decisions for women concerning their reproductive rights? And Clarence (and his partner in grime, Ginni) want to come for same-sex marriage next and it’s insane and it’s wrong and we at HL will donate our resources and will join the fight to protest and fix this dangerous travesty of a legal decision however that needs to happen.

Seriously?!? Monkeypox?!? by Lee Jacobs

Yes. Monkeypox.  If the Coronavirus pandemic taught us one thing, it is that prior proper planning is the key to prevention. Our knowledge and preventative plans helped curb Covid in the workplace and keep our workforces safe. As news continues to roll in about the spread of Monkeypox in the New York metro area, here is what you need to know now.

  • Monkeypox is NOT Covid.  First and foremost, the reports of Monkeypox should not cause alarm to the level that Covid-19 outbreaks have. The World Health Organization clarified that Monkeypox is unlikely to spread to the level of Covid-19, with only around 400 cases of Monkeypox currently known in the New York metro area, and no airborne spread.
  • There are several steps you can take to prevent an outbreak at the workplace.
    • free vaccine is available at many locations throughout New York City. You can inform your staff of this resource and guide them to learn more about who may want to consider a vaccine here.
    • The CDC also recommends continuing diligent handwashing, and avoiding sharing cups, utensils, and towels with someone who may have been exposed to Monkeypox. If an employee reports a positive Monkeypox case, federal guidelines recommend an isolation period.

Your attorneys at Helbraun & Levey are here to help with any questions or concerns you have about Monkeypox. This is not another Covid – but creating a plan with your lawyer will keep you up and running through whatever else comes next.

Google Ransoms by Lee Jacobs

A recent New York Times article, “Restaurants Face an Extortion Threat: A Bad Rating on Google”, discussed the conundrum that restaurant owners around the world are confronting—someone has intentionally given you a one star review on google, and demands to be paid money to remove it and/or prevent future ones from appearing.  What do you do?  First, alert Google (or the other relevant platform) of the fraudulent rating and finish and complete the process.  And, second, inform relevant agencies of the extortion (local police department, the F.B.I. and the Federal Trade Commission.

But should you pay the ransom or challenge the review (as in respond to it)?  We say no, but the choice is ultimately yours.  You never negotiate with irrational actors, because once you start agreeing to pay money, the demands for more and more money could (and most likely will) continue.  Also, we shy away from responding to the review itself, as the response will draw more attention to the false review in the first instance.  Eventually, either Google will remove the fraudulent review, or it will pass into obscurity.

Regardless of how you choose to handle these bogus reviews, we got your back and are standing by to advise you through this new and uncharted territory.

Joey Regs says:

It’s been a minute since we provided everyone with a New York Cannabis update, so we’ve prepared some FAQ’s below.  These should quickly help bring you up to speed.  And now that cannabis is getting closer to coming on-line fully, we are rolling out a cannabis only newsletter.  If you’re interested in opting-in to such a thing, please do so here: Cannabis Newsletter Sign-up

Q: Is Cannabis legalization still happening?
 Yes.  While the full regulatory package has not dropped yet, and is long overdue, some progress is indeed being made.  We’ve seen the roll-out of almost all of the conditional-use programming, as well as draft regs for labeling and marketing in New York State.  These are all indications of setting the proverbial table.

Q: Should we be concerned about how long things are taking?
 No.  Welcome to Cannabis.  Everything takes longer here.  Yes, it’s annoying. Yes, that makes planning much more difficult. BUT this has been the case in every jurisdiction that has legalized thus far.  So, no reason to be alarmed.  This is just what happens when you’re literally creating a new industry, with a regulatory framework for the manufacturing, sale and consumption of a previously unregulated commodity.  Kind of a big deal, if you think about it.

Q: What is the conditional use program?
 New York State has chosen, as a precursor to full legalization, to give certain groups of uniquely and specifically situated people the ability to “be first” in New York.   The logic behind this being that this would be a more efficient way to get our marketplace started -with a smaller group of applicants- while we wait for the full regulatory package to be negotiated and finalized.  While New York’s iteration of a conditional use program is novel, other States have implemented similar versions of this, so it’s not unheard of.

Q: What conditional use license classes are there?
 At this moment, there are conditional use cultivation licenses, condition use processing licenses and conditional use retail dispensary licenses.

Q: Who is eligible to apply for one of these conditional use cultivation licenses?
 Only those folks who were licensed to cultivate hemp in New York State prior to 12/31/2021, and can show proof of a harvest for two of the last four years.

Q: Have any of these been issued yet?
 Yes.  Over 200!

Q: Who is eligible to apply for a conditional use processing license?
A: Only those people who were licensed to legally process hemp in New York State prior to 1/1/2022.

Q: Have any of these been issued yet?
 No, but there are approximately 14 in queue, and they expect to hear results within the next 30 days or so.

Q: Who is eligible for a conditional use retail dispensary license?
 Only people who themselves or their parents, guardian or children have sustained a [low level] cannabis charge in New York State prior to 03/31/2021, AND can show proof that they have owned at least 10% of a business, AND that the business turned a net profit in two of the last five years.

Q: Have any of these been issued yet?
 No.  And while the public comment period on the regulations has closed, they have not yet issued final regulations, nor have they opened the application portal.  This is expected to happen by the end of the summer.

Q: What’s with all of these illegal dispensaries popping up everywhere?
 It’s crazy.  New Yorkers love a good hustle; we love pushing the envelope.  And that’s exactly what’s happening here.  These are 100% illegal – I don’t care what angle they’re claiming: private club, not-for-profit, gifting, etc.  They will all be short-lived, as New York State is finding ways to mobilize their enforcement units.  Right now, these illegal operators are making money hand over fist, but it’s only a matter of time before they get pinched.  Remember, despite legalization occurring last year, operating these businesses [pre-regulations] is still very illegal.  The Office of Cannabis Management has already issued Cease & Desist letters to many of these operators – letting them know that in addition to pending criminal charges, they will never hold a legitimate license in this State if they persist.

Q: Any thoughts on an updated timeline for things to really get going?
 With the conditional-use program, I expect that we actually could see some sales in Q4 of 2022.  And while I do still believe that the full regulatory package MUST come out sooner rather than later, and that we will indeed see the full application portal open before the year is out, I don’t think we will see commerce in full-swing until Q1-Q2 of 2023.

Joey Regs out.

Webinar Alert!

How to Build a Hospitality Group
by Andrew Fine and David Helbraun

When: Monday August 1  11:00AM – 12:30PM

If you are planning on opening more than one bar or restaurant, HL will teach you the key steps to ensure that your company infrastructure is built for growth.  Andrew and David have set up hundreds of hospitality groups for HL clients and they will share their knowledge and discuss the following:

–  The advantages in creating a holding company for your shops and how to do it.
–  Key hires to consider when growing from a single shop to many. When to hire a DO, Culinary Director, CFO etc.
–  How to grow your business, diversify your portfolio and seek out licensing and management deal

REGISTER HERE: Hospitality Group Webinar

As Jerry and Brent and the Boys liked to say:
We can run but we can’t hide from it/
Of all possible worlds we only got one, we gotta ride on it

Stay Cool, Cats and Hang in there,