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Hochul calls for a fresh start for New York cannabis

Plus, anti-legalization group SAM taps Bill Barr’s firm

Thursday, June 20, 2024

Good morning.

We hope you had a good day off for Juneteenth. Jeremy will be off for the next few days getting married, so wish him well! He’ll be back next week. 

Let’s get to it.


This newsletter is 1394 words or about a 8-minute read.

💡What’s the big deal?

Hochul calls for fresh start for NY cannabis

Gov. Kathy Hochul

What happened: New York Gov. Kathy Hochul in a Tuesday speech at Manhattan’s John Jay College called for a fresh start for the state’s embattled legal cannabis industry.

Hochul acknowledged the rocky start and too-slow licensing process for the industry and vowed to do better. She also touted her and New York City Mayor Eric Adams efforts to crack down on illicit cannabis sellers. 

The first big takeaway: New York City selected Tuatara Capital, a cannabis investment firm, to oversee its loan fund, per The New York Times’ Ashley Southall. The city set aside $8 million and expects to raise $30 million total. 

The fund will disburse $100,000 loans to eligible dispensary owners with an interest rate capped at 9.5%.

The second big takeaway: The state says it has padlocked 114 stores, and seized $29 million worth of illicit cannabis products. Including New York City, that number increases to 500 padlocked stores and over $40 million worth of seized illicit cannabis products.

What they’re saying: “New York state is rapidly building the most expansive, equitable cannabis market in the nation. One that uplifts Black and Brown New Yorkers who have been victimized by the war on drugs; delivers opportunities to underserved communities and cracks down on the unlicensed retailers who have taken over our neighborhoods,” Hochul said.

“Our law enforcement efforts are about more than seizing power, they’re about restoring power to the people.”

Back up: The Marijuana Regulation and Taxation Act (MRTA) passed in 2021, but it took years before the state’s first dispensary opened its doors.

It was a difficult time in New York politics, as former Gov. Andrew Cuomo was facing investigations over covering up COVID deaths in New York nursing homes as well as sexual misconduct allegations from young female staffers.

Hochul, for her part, inherited this mess, a state trying to recover from the worst of the pandemic. Cannabis was, likely, an afterthought. 

As pressure mounted, Hochul called for an investigation into the state’s Office of Cannabis Management (OCM), the chief regulatory agency, earlier this year. Following the investigation, the office’s executive director, Chris Alexander, stepped down along with a number of other high-ranking officials

Why it matters: At the heart of this debate over New York cannabis is the question of who legalization is really for. 

Under Alexander, the OCM prioritized minority entrepreneurs — specifically those impacted by cannabis prohibition — but critics say this effort slowed the rollout, and ended up working for nobody, least of all the entrepreneurs and communities that the OCM wanted to prioritize.

It’s important to note the rollout was also slowed down by multiple lawsuits from both companies and individuals who wanted a license, but didn’t fit the requirements of the OCM’s social equity program. 

Hochul is now trying to speed things up to save face, and to ensure that the state’s legal cannabis industry doesn’t fail entirely. 

But others, including former OCM staffers, say that Hochul is passing the buck and that much of the OCM’s failures rest on her shoulders

Advocates and others rallied near Hochul’s speech and pinned the delayed rollout on her, and specifically her administration’s choice to partner with an outside private equity firm, Chicago Atlantic, to lend to social-equity aligned entrepreneurs.

They say the deal was structured in a way that would enrich Chicago Atlantic at the expense of these entrepreneurs’ ability to set up viable businesses. 

And more: New York’s Cannabis Control Board will host its next meeting on Wednesday, June 26 at 11 AM. You can watch here


💬 Quotable

Watch advocates rally against what they say are Gov. Hochul’s failures to help fledgling cannabis businesses in New York:

Quick hits

Pennsylvania lawmakers from both sides of the aisle are preparing a bill to legalize recreational marijuana, emphasizing the need to keep pace with neighboring states like Ohio. The legislation would establish a regulated cannabis market prioritizing social equity, small businesses, and safeguards against youth use, with tax revenues supporting law enforcement and local governments. 

Hemp vs. Weed
Colorado Attorney General Phil Weiser filed a lawsuit against a Colorado cannabis company for what they allege as falsely marketing marijuana products as industrial hemp. The company, Gee Distributors, LCC, illegally sold cannabis products marketed as hemp with more than 35 times the THC level allowed by law. 

Bill Barr & SAM
Smart Approaches to Marijuana (SAM), an anti-legalization nonprofit, has tapped the law firm founded by former Attorney General William Barr to request that the Drug Enforcement Administration extend the public comment period for the proposal to reclassify cannabis to Schedule III. SAM argues that the current 60-day period is insufficient for gathering necessary feedback on moving marijuana from Schedule I to Schedule III of the Controlled Substances Act. The comment period ends on June 24. 

Texas Green
Desiree Venable, a Democratic candidate for the Texas state House, has collected 200 of the 400 required signatures to put a marijuana decriminalization initiative on the November ballot in Bastrop, Texas. A majority of Texans favor legalization or decriminalization, and more Texas cities, Lockhart and Dallas, are also pushing for these measures. Read more.

Raw rolling papers is suing a male enhancement pill company for trademark violation. Raw says the company, Mash Enterprise LLC, ripped off its logo, per Green Market Report.

🚀 Deals, launches, partnerships

Cannabis analytics firm BDSA has announced an update to its product suite, offering more granular daily cannabis market data across 15 markets starting July 2, enabling users to analyze pricing, market share, trends, and product attributes in real-time for better business decision-making.

Edibles company Wana Brands launched Wana Optimals Quick Relief, a fast-acting cannabis gummy combining CBC, CBG, THC, and the terpene Beta-Caryophyllene in Colorado and soon elsewhere in the US.

Impairment Science, which makes an app that quantitatively detects impairment, is entering into a partnership with AlcoPro, a drug testing firm. Read more of our coverage of Impairment Science and its Druid app here

Flower Power Genetics has announced that its patent-pending cannabis hybrid, ADAM, which offers “unparalleled” resistance to common cannabis diseases and significantly increases yields and quality, is now available for licensing to cannabis operators.

HighRewards, a new app launched this week on the App Store and Google Play, allows users to earn points from dispensary visits, purchases, and uploaded receipts, which can be redeemed for gift cards to major retailers like Target, Starbucks, and Nike, as well as by engaging with videos, games, and surveys in the app.

😜 One fun thing

The Portland Pickles, a West Coast League baseball team, landed a partnership with cannabis beverage company Cycling Frog

Cycling Frog will be the team’s “exclusive THC beverage” partner for the summer season. The team celebrated what it says is the first THC beverage purchased at a live sporting event on X:

📊 Chart of the day

Forty-percent of US states tax recreational cannabis, according to a report from the nonprofit Tax Foundation. Read the rest of the report here

📰 What we’re reading

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