There’s a lot more to the future of New York’s cannabis industry than the major license types of growing, processing, and retail, according to the state’s Assembly Majority Leader.
Crystal Peoples-Stokes worked for nearly a decade with Senator Liz Krueger to get a cannabis legalization bill passed, which Gov. Andrew Cuomo signed into law in March. Now, New York’s cannabis business hopefuls are strategizing around how best to enter the industry, which is expected to create tens of thousands of jobs in the state.
Peoples-Stokes has hosted several virtual seminars aimed at educating New York residents, especially potential equity applicants, who are trying to find their place in what will be a competitive and lucrative market. During the fourth seminar in the series, this weekend, Peoples-Stokes encouraged the 400 plus attendees to think creatively about marketing, packaging, and security—essentially, the cannabis industry’s ancillary opportunities.
“The reason we’ve been doing these events is because we want the legacy market to be ready, day one. We don’t want the regulations to go in place, and now you can apply for a license, yet no one knows what to do,” Peoples-Stokes said. “And I’m confident that the legacy market is going to be ready when the regulations are in place to take advantage of that 50% equity goal,” she continued, referencing her goal, with Krueger, to ensure half of all new licenses go to equity applicants.
Peoples-Stokes was joined by a panel that included Dasheeda Dawson, founding chair of the Cannabis Regulators of Color Coalition and the Cannabis Program Supervisor, City of Portland Oregon; Jessica Knox, co-founder of the Association for Cannabis Health, Equity and Medicine; Sheldon Roberts, a real estate manager; Reggie Keith, owner of Canna-House, a cannabis-focused events space; and Sara Vescio, executive director for the Women’s Business Center at Canisius College.
“We were successful in finally passing legislation that I personally carried and championed for the last eight years and it’s really trying to just continue our work in righting the wrongs of the prohibition of this plant,” Peoples-Stokes said. “Just to be real clear, the intention of this legislation [is] more about equity, social equity and economic equity, than it is necessarily about raising revenue for the state of New York.”
After lengthy negotiations with Cuomo, the bill as signed into law puts cannabis tax revenue remaining after program costs are covered toward three funds: a “state lottery fund,” which will get 40%; a “drug treatment and public education fund,” which will get 20%; and a “community grants reinvestment fund,” which will get 40%.
Dawson reflected on what she called a “real full circle moment” when she saw that New York’s bill would allocate 40% of the net cannabis tax revenue to community reinvestment.
Dawson spoke about her role with the Cannabis Regulators of Color Coalition, which formed last year, and how a major part of “doing cannabis equity intentionally” is automatic expungement of qualifying cannabis charges, which was included in the final bill. So, too, Dawson said, is the New York City Police Department memo, which followed the passage of the bill, that eliminated the smell of cannabis as a reason to search a vehicle, a “policing tactic.”
“It’s precedent setting, that our law enforcement is going to have to find a different way to really find true criminals and not use smell to more or less target,” Dawson said.
Dawson said she grew up in East New York, Brooklyn, where many community organizations have been doing the work without adequate funding. The bill that lawmakers passed and Cuomo signed will funnel funds to those groups as part of their equity efforts.
“These are the community organizations, I think, that need to be sure that they’re paying attention about when these grants are going to be available because it’s going to be invested across a diverse area of groups or areas, whether it’s youth development, education, entrepreneurship,” Dawson said.
Peoples-Stokes spoke about the Office of Cannabis Management, which will oversee the adult use, medical, and hemp programs in New York, and how it will not be “solely executive,” but will give the legislature a “participatory role.”
During three-way negotiations, there was disagreement between lawmakers and Cuomo over the amount of control Cuomo’s office would have in the implementation of the law, for example, and where specifically cannabis revenue would be allocated.
“Just because you write a great law doesn’t mean it’s going to be implemented in the right way. And so for me, in the negotiation process, it was critical that the legislature always has a role there because executives can get like ‘me, me, mine. I’ll make all the calls.’ No, not this time. Because this time, we have to get this right. And I believe the structure we have in place will allow us to do that.”
Still, rules for adult use sales aren’t expected overnight and estimates are that it will take the better part of 18 months or more for the first sales to take place in New York.
“I don’t think it should take us 18 months or two years. As New Yorkers, we should be able to do this a little quicker. We’ve seen what other states have done. We’ve seen what other countries have done,” Peoples-Stokes said. In the meantime, Peoples-Stokes said, people already working in another type of business can save money, build their credit scores, and pay off debt to prepare.
Peoples-Stokes shared a warning with New York’s equity applicants, too: investors might come calling, but make sure that they’re the right investors and teammates to build a cannabis business. Peoples-Stokes said she met with some cannabis business hopefuls in New York City a couple of weeks ago “who have been approached by numerous investors that would like to be the lead on the business.”
“You really do have to do your homework on this. Don’t just let somebody come and offer you money to start a business and you end up with 10% of the company,” Peoples-Stokes said.
