This is how New York is building its legal marijuana business

Nearly a thousand applications were made to obtain one of the first 150 permits to sell all kinds of cannabis-derived products. Created to arbitrate the industry under the name Office of Cannabis Management (OCM, its abbreviation in English), the regulator plans to issue licenses before the end of the year.

It is the beginning of a work that can produce. $1.3 billion It created up to 24,000 new jobs in revenue in its first year and over the next three years, according to calculations by the City Controller in charge of accounts.

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

The licensing delay didn’t stop the business from getting up and running. Impatience breeds street vendors and a few openings clubs cannabis that trades its products for membership. “We’re here because they don’t issue licenses,” a couple says, “call us Scott and Daisy,” at their booth in Washington Square Park, the epicenter of the city’s specialty goods market.

Decriminalization in a case. Therefore, the authorities turned a blind eye to the unlicensed sale for now. The situation is expected to change once the dispensaries become operational. The industry regulator has already warned that it will face fines and possible criminal action for those who continue to sell without permission.

The most daring took advantage of the waiting time to rent buildings, set up shops, and have everything ready when it was time to say goodbye. This is the case of Empire Cannabis Club, which operates as a street-level club with two locations in Manhattan and carefully designed decorations. “People like us are turning the entertainment market into a replica of the medicine market before they even get a chance to go in,” says Lenore Elfand, co-owner of the store.

Priority to convicts

The fear of those who have already invested in this business grew when they saw the money given by the administration. priority licenses granted to persons with prisoner (or their relatives) for cannabis-related offenses. Also, as it will be the organizer who selects the property, negotiates the rents and then delivers the keys to the winners. An industry development that could eliminate the possibility of integrating their facilities into the list.

Promoted by New York’s governor, Democrat Kathy Hochul, the arrangement seeks to compensate minorities – particularly among the black and Latino communities – affected by the harshness of the War on Drugs policy promoted since the 70s during the Administration. nixon

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

Holland adds that the decision to prioritize convicts “challenged the entire business model” intended by the major producers. In New York, weed regulation was always conditional on pardons pardoning prisoners’ sentences. 400,000 people. This amnesty was ahead of the amnesty granted by US President Joe Biden to all prisoners in the country for this reason, less than a month before the midterm elections in November.

couple selling herb As the owner of the club, he meets the main requirement in Washington Square. “I was sentenced to two years for smoking in the street,” says Scott. “In the ’60s, my uncle was killed while weeding in the Bronx. And my brother spent 10 years in federal prison growing up,” Elfand says. None of them are sure they can get the license they had to pay $2,000 to process.

public-private fund

The government has set up a fund to develop the equitable market followed. 200 million dollars lending to new owners. The first $50 million came from the public piggy bank and the rest is in full collection among private investors. Future entrepreneurs also have to prove that they are successful in some jobs that can be modest, such as a tobacconist or grocery store.

According to an industry report, the network is expected to reach approximately 900 retail licenses by 2027 and generate revenue of $4.2 billion. “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 licenses was to ensure there was enough supply. Federal law requires retailers to source only from the state’s own manufacturers. 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 products, including quality edible gums, topical creams and concentrated oils,” said Tremaine Wright, chairman of the Cannabis Control Board.

Can produce as much as an average dispensary $1.8 million profit With revenue of $3 million, according to Statista research. According to data published by specialist cannabis outlet MMJ Business Daily, 15% of stores in the country have annual revenues of less than $100,000 in 2021, 27% between $100,000 and $250,000, and 15% between $500,000 and $1 million. reported that more than a quarter were exceeded. one million.

Despite its juicy benefits, what is known as 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 maintain priority for convicts.

Those charged with developing the market remain optimistic about this new legal framework, which they have christened as a “development tool.” “post-prohibition period”In reference to the Prohibition of the 20s, which pushed Americans to drink in secret bars, the mafia made gold smuggling alcohol.