Cannabis Fires Up
Dear HL Clients and Friends,
A few weeks ago, we produced our first live Canna Chat in over 2 years at The Brooklyn Bank in Bed Stuy. It was a packed house and an unbelievable program with Tremaine Wright, Chairwoman of the Cannabis Control Board of New York, as our special guest. The room was full of Brooklynites, entrepreneurs and hospitality people, as Chairwoman Wright, in a conversation with yours truly, broke down the forthcoming cannabis rules and regs, spoke on license timelines and revealed some exciting breaking news.
She told us that we can realistically expect draft rules and regs (how to apply, how many licenses, how to win etc.) to be published between March 31st and May 1 and that final regs and applications will be done by late summer/early fall 2022. She also indicated that license awards will be issued by early 2023 at the latest, and sales to the public will begin in Q1 of 2023.
We discussed how applicants can differentiate themselves and get in the best position to win a license in what is shaping up to be one of the most competitive application processes in the country. A solid business plan is a must; team-building is crucial; being adequately funded is essential; and location is key – not just the geography though, but how your plan fits into the community, including how you’re engaging the neighborhood and what type of opportunities you’re going to be creating there.
Chairwoman Wright spoke about the social equity program and the importance of righting historical wrongs in certain communities, and how it is the duty of her agency to look out for New Yorkers who have been unfairly and adversely affected by the war on drugs. We acknowledged that the most challenging part of social equity programming across the country has been seen in matching applicants with money. Wright described a $200 Million fund that is currently in place in New York, and detailed some of the agency’s future plans for access to capital for social equity applicants, as they aim to succeed where many other states have failed.
Here are some exciting new programs revealed over the last few weeks:
Farmers First Program
Any person or company licensed and registered to grow hemp in New York State prior to December 31,2021 [and who has been growing hemp for two of the previous four years] will be eligible to apply for an Adult-Use Conditional Cultivators License. This will give these farmers, who already have a documented history of growing the plant in this State, the opportunity to be first in New York to grow for the adult-use market. This program serves to further New York’s commitment of taking care of their own and will ensure that local New York farmers are first to market (even in front of the existing medical licensees). It will also go a long way to ensure that the market is properly seeded with product before all of the new adult-use retail licenses come on line, and that the New York mom & pops aren’t beholden to the large multi-state operating companies that currently hold the 10 [vertically integrated] medical licenses in this state, and would therefore control their supply chain.
Equity Owners Lead Program
Any person who has had a cannabis-related offense occur prior to March 31, 2021 to themselves personally, or to a parent, guardian, child, spouse or other dependent of theirs, would be eligible to apply for a Conditional Adult-Use Retail Dispensary License. Similar to the Farmers First Program, this initiative will position those who qualify to be first to market in the Adult-Use, retail cannabis game (even before the medical licensees).
While the final, full regulations for this initiative are not out yet, we do have some additional info. For starters, the cannabis-related offense in question must have taken place in New York State. Also, the individual with the offense (or person affected by it) must own 51% of the company AND must be responsible for investing that equitable share in the project. Additionally, 30% or more of the ownership group must be able to show some documented proof of experience operating a business, and showing a net profit for at least two of those years. Other factors will be considered as well, specifically, the proposed location of the future store. The goal of this initiative is not only to position those who have been unfairly and adversely affected by the war on drugs to be first in NY, but also to invigorate specific neighborhoods that have been unfairly and adversely affected by the war on drugs as well.
Draft regulations for this program are out, and once we pass the public comment period, these applications will go live as well which I anticipate will happen this summer, with license awards being issued shortly thereafter, and the very real possibility of actually opening stores before the end of 2022.
If you recall, Governor Hochul touted a $200 Million fund in a public address last month. The plan is for the lion’s share of that funding to be available to assist those entrepreneurs who look to participate in this Equity Owners Lead Program. Whether the money will be available soon enough to make the desired impact is the [multi] million dollar question.
One last thank you to HL client and friend Jude Bernard and The Brooklyn Bank for hosting us all at the beginning of this month, and for making the event possible. The program was a resounding success, and we were honored to be part of it.
Anyone who is even remotely interested in getting into the cannabis game, now is the time. Reach out.
Exciting stuff, friends.
Joey Regs Out