Medical cannabis firms say NY’s $15 million fee doesn’t ‘reflect reality’

NY, NY
Medical cannabis firms say New York’s $15 million fee doesn’t ‘reflect reality’

Driving the news: New York Gov. Kathy Hochul’s budget earlier this month codified a $15 million fee that existing medical cannabis operators must pay to transition their stores to the recreational market.

On Friday, Jeremy interviewed Katie Neer, an attorney at Dickinson & Avella, and Ngiste Abebe, the spokesperson for the New York Medical Cannabis Industry Association and the co-founder of KND Group, on Cultivated Live. Both Neer and Abebe represent and speak for these medical cannabis firms, who say the fee is far too high — and that many companies simply won’t pay. 

The $15 million fee is a barrier for medical cannabis companies

While the fee is meant to support social equity goals, there so far seems to be little practical impact. 

Medical cannabis operators — known as registered organizations (ROs) — are struggling to justify the cost. Only four out of ten ROs attempted to transition under the original $20 million fee, and few are expected to comply at $15 million.

Medical patients lose out

The fee may appear as a penalty for big cannabis firms, but Abebe and Neer say it hits medical patients the hardest. Medical dispensaries are closing, and essential products — including pediatric formulations — aren’t available in the recreational market. The policy appears to deprioritize patient access in favor of political optics, they say: 

New York has struggled to balance equity, access, and opportunity

While the fee was originally meant to fund equity programs, that vision has been undermined, Neer and Abebe say. Without a clear social equity budget or access-to-capital strategy, the fee appears arbitrary — and the state risks alienating both legacy operators and new entrants.

On the other hand: Of course, this is the view of one side of the issue. The Empire Cannabis Manufacturers' Alliance (ECMA), a group of New York cannabis companies, said the fee is too low, and is a sign that Hochul’s administration “prioritizes out-of-state cannabis conglomerates over New Yorkers.” 

And more: Watch our interview with Curaleaf CEO Boris Jordan, who called the fee “a racket.”

Watch the full interview here:

New York announces BioTrack implementation timeline 📅

New York announced the timeline for full integration with seed-to-sale inventory tracking system, BioTrack. Starting August 1, licensed cultivators will need to use BioTrack. Then on September 1, that extends to licensed processors and distributors. Licensed retail dispensaries must be on the system by October 1. Some blame the lack of proper track-and-trace protocols in the state for product ‘inversion’ or illegally selling out-of-state products in New York. Read more. 

The Toronto Star investigates cannabis smuggled out of Canada 🤔

A new investigation from The Toronto Star says Canada has a ‘black eye’ internationally as it becomes the top source of illicit cannabis smuggled into Europe and elsewhere. “There’s been this massive overproduction of cannabis in Canada and licensed companies in Canada have actually had to destroy more cannabis than what they’ve been able to sell,” an expert told The Star. Read it here.

Nebraska's Cannabis Commission would lack immediate funds 💸

Governor Jim Pillen announced a plan to create regulations for the state's upcoming medical cannabis market before the legislature has a chance to do the same. Without any input from the legislature, the Nebraska Medical Cannabis Commission would remain unfunded, outside of $30,000 set aside for any Liquor Control Commission employees working on medical cannabis-related issues, according to the Nebraska Examiner. Meanwhile, state Attorney General Mike Hilgers promised to sue Pillen's commission if it issues any state licenses. 

California moves to restrict veterinary cannabis 🐶

California regulators are planning to ban animal cannabis products from having more than 1 milligram of THC, a proposal that veterinarians say would make the state’s market more dangerous for dogs and cats, SF Gate reports.

INSIGHTS
Flower’s ongoing dominance

Industry professionals understand the dominant position that flower has in cannabis markets. But our Official Insights Partner at Lit Alerts wanted to dive deeper to see how dominant flower’s position was among key markets on the East Coast

Here’s a look at flower’s share of East Coast total units sold, from January through April this year, including flower and pre-rolls:

An interesting note: Massachusetts, the most mature market of this cohort, has the most dominant share of flower products.

It begs the question: Will the other East Coast markets follow this trend as the quality of flower improves? Or is this an interesting regional preference shaking out?

Time will tell — so stay tuned.

To learn more about Lit Alerts and get a special offer only available to Cultivated readers, visit litalerts.com.

As members of the cannabis industry, we have a unique responsibility to call out injustice wherever we see it. 

American basketball player Jarred Dwayne Shaw, 34, was arrested after police raided his apartment in Indonesia. They found the equivalent of 30 ounces of cannabis gummies — which he purchased in Thailand, where cannabis is legal. He had been playing for the Indonesian Basketball League since 2022. 

Indonesia’s drug laws are punitive and backward. Shaw could face life in prison, and even death by firing squad, for cannabis possession. 

It’s incumbent upon us as an industry to not let that happen. And we’d add — the United Nations and the US should put pressure on and isolate Indonesia until it changes its policies. Write to your lawmakers, and publicize the story as much as you can. 

Countries should be free to pursue their own drug laws. But execution for cannabis possession is barbaric, and not something that should happen in 2025. Indonesia’s last executions were carried out in 2016. 

Opinion: Don’t forget about medical cannabis patients | Minnesota Star-Tribune