New York Archives - Green Market Report

StaffMarch 31, 2021
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9min10530

On March 30, 2021, late in the evening, the New York legislature passed the landmark MRTA (Marijuana Regulation and Taxation Act) bill legalizing marijuana in the Empire state. Through the hard work of people impacted by prohibition, advocates and champion lawmakers, like Assembly Majority Leader Crystal Peoples-Stokes and Senator Liz Krueger, New York has taken action to chip away the remnants of the war on drugs.

“Today, the Assembly and the Senate modeled what democracy actually looks like when the legislature allows progressive movements to lead towards justice” said Jawanza James Williams, Director of Organizing with VOCAL-NY. “We did not fight simply for legalization’s sake, but worked for years to craft legislation rooted in racial and economic justice, in an effort to repair harms while also setting a new standard for anti-racist, class-conscious, and gender-expansive policymaking. This is a massive success for New Yorkers, and for communities across the United States. We implore the Governor to immediately sign the MRTA into law.”

“Make no mistake about it, New York has made history today by ensuring marijuana reform is on track to become the law of the land. Through the hard work of people impacted by prohibition, advocates and champion lawmakers, like Assembly Majority Leader Crystal Peoples-Stokes and Senator Liz Krueger, New York has taken bold action to put a nail in the coffin of the war on drugs,” said Melissa Moore, New York State Director of the Drug Policy Alliance. “This law comprehensively addresses the harms of overcriminalization and establishes one of the most ambitious marijuana legalization programs in the nation. Through this sweeping legislation, New York is delivering reforms that place community reinvestment, social equity, and justice at the core of the law. At long last, victory is here. We urge Governor Cuomo to sign the Marijuana Regulation and Taxation Act into law immediately.”

“For years, New York marijuana convictions have caused immeasurable harm to immigrant communities across New York State,” said Jose Chapa, Senior Policy Associate at the Immigrant Defense Project. “Thanks to the work of countless advocates, our partners at the Drug Policy Alliance and Start SMART NY, New Yorkers seeking status or immigration relief will be able to vacate old marijuana convictions to clear the path to become residents and citizens, thanks to the passage of the MRTA.”

“Thank you DPA, community organizers, advocates, Majority Leader Crystal People-Stokes, Senator Liz Krueger and our lawmakers who stood with us pushing for legalization, together we did it! While it has been a journey, we will celebrate this joyous day but not without understanding this is only the beginning. It is essential that we see fair representation of minorities and women in the Office of Cannabis Management and on advisory boards that will oversee our in-state program. We have a community of women who are ready to work with legislators as the next round of work unfolds. This bill will serve many groups but we must first address the communities most harmed. We owe them. It is critical that we educate whole communities on these new laws before they take effect and give our people access to the opportunities we fought for in this bill. Let’s celebrate by taking steps to repair,” said Gia Morón, Women Grow.

“Over a century since marijuana was first prohibited in the US, New York state finally moves one step closer toward redressing the harms perpetuated against Black and Latinx communities through its prohibition by passing this historic legislation. We applaud the tireless work of countless directly impacted individuals who have been on the frontlines of pushing for its passage and call on Governor Cuomo to sign it into law immediately,” said Juan Cartagena, LatinoJustice.

“We stand on the shoulders of giants. It’s taken a great amount of work and perseverance by activists, patients, and consumers, to go from being the cannabis arrest capital of the world, to lead the world with a legalized market dedicated to equity, diversity, and inclusion. This might not be the perfect piece of legislation, but today, cannabis consumers can hold their heads high and smell the flowers. Senator Krueger and Assembly Majority Leader Peoples-Stokes have laid the groundwork for marijuana justice and a consumer-centric industry. Now, it’s time for the Office of Cannabis Management to take up their torch and implement regulations that protect patient and consumer rights. In the words of our late Director, Doug Greene – Cannabis Excelsior!” said Troy Smit, Empire State NORML.

“New York’s approach to cannabis regulation and taxation is historic in its focus on reinvestment in the communities most harmed by over-policing and over-prosecution of cannabis-related offenses,” said Tracie Gardner, Legal Action Center’s Vice President of Policy Advocacy. “We are deeply grateful to the leadership and tireless advocacy of the Start SMART coalition for its unwavering commitment to ensuring that New York’s cannabis legalization centers on equity and justice.”

“As a child, I experienced firsthand the devastating impact the War on Drugs was having on communities of color. As a student leader/activist, New York State drug policy reform became the first issue I worked on. As a community, we have learned that legalization is important, but it must be coupled with equitable strategies to help repair the harm done to poor communities and communities of color during this unjust war. The Marijuana Regulation and Taxation Act (MRTA) incorporates racial and economic justice that begins to right the wrongs of the past and present and encompasses the necessary visionary strategies to give hope and opportunity to our young people. MRTA begins to address both the racial and the economic inequalities that plague Western New York by calling for direct investments back into the communities that have been disproportionately harmed by biased and unjust policing and incarceration policies,” said Franchelle Parker, Executive Director of Open Buffalo.

“Thanks to the tireless dedication of our legislative leaders and people statewide, New Yorkers are on the verge of a new paradigm where cannabis can help heal our communities, regenerate the environment and revitalize local economies. New York has the potential to become the national leader in forward-looking cannabis policies that protect and repair the planet, create equitable opportunity for all and afford justice to those harmed by past practices. We look forward to continuing our work with state officials and regulators to ensure we succeed,” said Donna Burns of NY Small Farma.

“The New York Minority Alliance is proud to be part of such historical legislation that includes equitable access and resources in Entrepreneurship, Social Justice, Community Reinvestment and Health Equity for Black and Latinx communities. We congratulate all that were involved and thank the NYS Legislature for this day!” said Yasmin Hurston, President of New York Minority Alliance

 


StaffMarch 29, 2021
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New York Legislators could vote as early as Tuesday on the legalization of adult-use cannabis in the state. Word of a compromise on language began to circulate last week, but it wasn’t until the weekend when the actual text of the legislation was released. the legislation is 128 pages longs.

Melissa Moore, New York State Director of the Drug Policy Alliance and member of Start SMART NY Coalition (Sensible Marijuana Access through Regulated Trade) said, “At long last, marijuana reform is finally almost a reality in New York State. Through the tireless work of people impacted by prohibition, advocates and champion lawmakers, like Assembly Majority Leader Crystal Peoples-Stokes and Senator Liz Krueger, New York is on the precipice of ushering in a new era of marijuana justice. Advancing legalization in New York also puts another nail in the coffin of the war on drugs that has devastated so many communities across the state. By comprehensively addressing the harms of past criminalization, this legislation will create one of the most ambitious marijuana legalization programs in the country. It is setting a national model for reform with community reinvestment, social equity, and justice front and center.”

This is a summary of the main components of the 128-page New York marijuana legalization bill according to Marijuana Moment:

  • -Adults 21 and older would be able to possess and purchase marijuana products from licensed retailers.
  • -There would be no penalties for public possession of up to three ounces of cannabis or 24 grams of marijuana concentrates, and people could store up to five pounds of cannabis at home.
  • -Adults could also cultivate up to six plants for personal use, three of which could be mature. A maximum of 12 plants could be grown per household with more than one adult. Homegrow would not take effect until regulators set rules for it, and they would have a maximum of six months to do so for medical patients and must do so for adult-use consumers no later than 18 months after the first retail recreational sales begin.
  • -People with convictions for marijuana-related activity made legal under the legislation would have their records automatically expunged.
  • -A system of licenses for commercial cultivators, processors, distributors, retailers, cooperatives and nurseries would be created, with a prohibition on vertical integration except for microbusinesses.
  • -Social consumption sites and delivery services would be permitted.
  • -Individual jurisdictions would be allowed to opt-out of allowing retailers or social consumption sites by the end of this year, but residents could seek to override such bans via a local referendum process.
  • -A new Office of Cannabis Management—an independent agency operating as part of the New York State Liquor Authority—would be responsible for regulating the recreational cannabis market as well as the existing medical marijuana and hemp programs and would be overseen by a five-member Cannabis Control Board. Three members would be appointed by the governor, and the Senate and Assembly would appoint one member each.
  • -The legislation sets a goal of having 50 percent of marijuana business licenses issued to social equity applicants, defined as people from “communities disproportionately impacted by the enforcement of cannabis prohibition” as well as minority- and women-owned businesses, disabled veterans and financially distressed farmers.
  • -Cannabis products would be subject to a state tax of nine percent, plus an additional four percent local tax that would be split between counties and cities/towns/villages, with 75 percent of the local earnings going to the municipalities and 25 percent to the counties. Marijuana distributors would also face a THC tax based on type of product, as follows: 0.5 cents per milligram for flower, 0.8 cents per milligram for concentrated cannabis and 3 cents per milligram for edibles.
  • -Tax revenue from marijuana sales would cover the costs of administering the program. After that, 40 percent of the remaining dollars would go to a community reinvestment fund, 40 percent would support the state’s public schools and 20 percent would fund drug treatment facilities and public education programs.
  • -Police could not use the odor of cannabis to justify searches.
  • -The State Department of Health would oversee a study of technologies for detecting cannabis-impaired driving, after which it could approve and certify the use of such a test. Additional funds for drug recognition experts also would be made available.
  • -The state’s existing medical cannabis program would also be changed to expand the list of qualifying conditions and allow patients to smoke marijuana products. Patients could also obtain a 60-day, rather than 30-day, supply.
  • -Smokable hemp flower sales would be allowed.
  • -Current medical cannabis businesses could participate in the recreational market in exchange for licensing fees that will help to fund the social equity program.

Anne Oredeko, Supervising Attorney of the Racial Justice Unit, and Anthony Posada, Supervising Attorney of the Community Justice Unit at The Legal Aid Society, issued a joint statement saying, “For decades, New York State’s racist war on marijuana ensnared thousands of our clients – nearly all of whom are from Black and Latinx communities – and other New Yorkers from communities of color across the state, resulting in needless incarceration and a host of other devastating consequences. This landmark legislation brings justice to New York State by ending prohibition, expunging conviction records that have curtailed the opportunities of countless predominately young Black and Latinx New Yorkers, and delivers economic justice to ensure that communities who have suffered the brunt of aggressive and disparate marijuana enforcement are first in line to reap the economic gain.”

 

 


Debra BorchardtMarch 25, 2021
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Word came out of Albany late Wednesday afternoon that legislators had reached an agreement on the language of legislation regarding the legalization of adult-use cannabis. There are two competing bills for the law – the Cannabis Regulation and Taxation Act (CRTA) and the Marijuana Regulation and Taxation Act (MRTA). The word is that the bill that was agreed upon included the contentious home grow issue, delivery, social consumption, and the removal of the license auction. However, there is no confirmation on the actual language that was included which could receive a vote next week. It is expected that it will take at least one year before sales can take place.

“I believe New York is the progressive capital of the nation—not just because we say it is but because we perform that way. And legalizing cannabis is this year’s priority to be the progressive capital of the nation,” Cuomo said in a briefing with reporters on Wednesday. “We won’t be the first, but our program will be the best.”

The legislation will still need to be written into the budget and it could still be changed and be rewritten. “It is my understanding that the three-way agreement has been reached and that bill drafting is in the process of finishing a bill that we all have said we support,” state Senate Finance Committee Chair Liz Krueger told Bloomberg Government on Wednesday.

Medical marijuana is already legal in New York, but this legislation would legalize recreational cannabis use for adults 21 years old and up. Krueger said that there would be a 13% sales tax, 9% of which would go to the state and 4% to the localities. Distributors additionally would collect an excise tax of as much as 3 cents per milligram of THC, the active ingredient in cannabis, with a sliding scale based on the type of product and its potency.

One of the biggest issues holding back negotiations was the ability to grow cannabis in the home. The rumor was that six plants per person would be allowed with 12 plants per household. Home grow wouldn’t begin until 2024. Another issue is that localities would be able to deny delivery, retail and home grow.

Krueger also said that there would be no changes would be made to the taxes already imposed on marijuana sold for medical purposes. Some of the additional  discussed aspects of the law included:

  • The state Health Department would be required to study devices that are supposed to test saliva to determine if a person is impaired from marijuana, though there’s skepticism among lawmakers about the effectiveness of such technology.
  • Police would be allowed to use the odor of cannabis to identify impairment, though they could not use it to justify a search a vehicle.
  • Driving while impaired from marijuana would result in a violation, rather than a misdemeanor. However, that component may be further revised before the final bill is released.
  • The state’s existing medical cannabis program would also be changed to expand the list of qualifying conditions and allow patients to smoke marijuana products. Patients could also obtain a 60-day, rather than 30-day, supply.

The governor’s office estimates that a legal cannabis program could pull in about $350 million a year once fully implemented. Existing medical dispensaries could add four additional sites under the proposal, two of which would have to be in underserved areas, she said. Registered medical marijuana organizations would be able to add two adult-use dispensaries, Krueger said.

Matt Hawkins, Founder and Managing Partner of cannabis-focused PE firm, Entourage Effect Capital said, “Great news that a three-way agreement for adult-use cannabis has been reached in the state of New York. This potential $2.5B marketplace will have a similar monumental impact on the industry as California’s adult-use passage in 2016. We at Entourage Effect Capital look forward to investing in the state upon legalization.”

Many believed that the language from the MRTA was the predominant language in the negotiated bill. The social equity issue looks to be addressed in the creation of a fund versus specific licenses, but that could still be changed.

The MRTA:

  • Under the MRTA there are still two arrestable offenses: sale to a person under the age of 21 and the unlicensed sale of over a pound of marijuana.
  • The MRTA establishes 21 as the legal age of use for marijuana and marijuana products.
  • The MRTA establishes the Bureau of Marijuana Policy to assume regulatory responsibility of the marijuana industry. The Bureau will be housed within the existing State Liquor Authority and will undertake the similar purpose of providing oversight, promulgating regulations, and issuing licenses.
  • Under the MRTA, individuals over the age of 21 are allowed to cultivate up to 6 plants at home and retain the fruits of those plants.
    People who have been convicted of low-level possession (including possession in public view) and low-level sale will have that conviction vacated from their record.
  • Under the MRTA, the Bureau of Marijuana Policy will award licenses to produce, process, test, dispense, distribute, and deliver marijuana.
  • The MRTA restricts vertical integration to provide the maximum amount of space for new companies to develop and contribute to a New York-focused market.
  • Tax revenue will be used to conduct studies analyzing the impacts of marijuana legalization on public health, public safety, youth use, the state economy, the environment, and on the criminal justice system. Additional funds will be distributed to study the efficacy of New York’s regulations and their success in ensuring diversity and inclusion in licensing
  • The MRTA does not touch the Compassionate Care Act and the medical marijuana program that it established

The CRTA:

  • The CRTA would establish the Office of Cannabis Management (OCM) within the Division of Alcohol Beverage Control. The OCM would be governed by a five-member Cannabis Control Board, appointed by the governor, to oversee the adult-use, medical, and cannabinoid (CBD) hemp industries. Under the governor’s proposal, the governor would appoint all five members and the chair, who would also serve as the board’s executive director.
  • The CRTA removes delivery licenses and mandates that cultivators and/or processors wholesale adult-use products through licensed distributors.
  • The CRTA mandates the OCM to establish a Social and Economic Equity Plan (the Equity Plan) that “actively promotes racial, ethnic, and gender diversity in the adult-use cannabis industry and prioritizes applicants who qualify as a minority and women-owned business, social equity applicant, or disadvantaged farmer and which positively impacts areas that have been harmed through disproportionate enforcement of the war on drugs.”
  • The CRTA sets forth a local opt-out provision whereby all counties and cities with a population of 100,000 or more residents would have the opportunity to pass a local law, ordinance, or resolution by a majority vote of their governing body to opt out of the adult-use cannabis program. Local governments that participate in the adult-use cannabis program will be able to further regulate the time, place, and manner of cannabis operations through zoning powers.

StaffMarch 15, 2021
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6min9660

On Monday, New York State Governor Cuomo Cuomo said “passing marijuana reform and legalizing recreational marijuana” remains a priority and that he spent the weekend speaking with Assembly Majority Leader Crystal Peoples-Stokes (D), who is the sponsor of the Marijuana Regulation and Taxation Act (MRTA), “working through” the legislation. He said they are “very close on marijuana.” However, some of the sticking points on getting the legislation passed include decisions surround growing cannabis at home and continuing the use of stop and frisk measures when cannabis is smelled.

Melissa Moore, New York State Director of the Drug Policy Alliance and member of Start SMART NY Coalition (Sensible Marijuana Access through Regulated Trade) said, “Today’s Siena poll confirms that New Yorkers across the board are overwhelmingly in favor of marijuana legalization. Nearly 60 percent of New York State residents support legal marijuana for adult use — and it’s universal. Literally every single category of voters from every corner of the state — women, men, liberals, conservatives, from upstate, downstate and everywhere in between — supports legal marijuana now. Given this broad-based mandate, it is imperative that the absolute best marijuana reform bill becomes law. We urge swift passage of the Marijuana Regulation and Taxation Act (S.854/A.1248) to secure justice, jobs, and equity for the millions of New Yorkers that have borne the brunt of marijuana criminalization and restitution for the communities most harmed by the war on drugs. The time to act is now.”

“We’ve tried to do that for the past three years, we have to get it done this year,” he said. “There’s been too many young lives that have been ruined because of the marijuana laws.”

The actual language is as follows:

Cannabis Regulation and Taxation Act: The Assembly proposes to continue discussions with the Executive and the Senate to provide for the legalization and regulation of the cultivation, production, sale of cannabis and cannabis products for adult-use, expanding the existing medical cannabis program and address the collateral consequences of the criminalization of cannabis. The Assembly supports the establishment of a centralized regulatory approach for the licensure and regulation of medical, adult-use, and hemp-based cannabis and cannabis
products and businesses through the creation of a regulatory body comprised of legislative and executive appointments, as well as ex-officio agency representation from agencies
involved in implementation.

The Assembly also supports provisions to: reduce criminal penalties attributed to future cannabis-related activity; expand the ability of individuals to vacate or expunge certain lower level past cannabis convictions; protect legal rights in the workplace; ensure appropriate standards and protections are in place as it relates to public assistance, child care workers, foster parents and investigations of child abuse, neglect, and endangerment involving the use of cannabis; provide access to business mentoring, application process assistance, incubators, capital and other social equity programs necessary to support the long-term success of social and economic equity applicants as part of a plan  to award percent of adult-use cannabis licenses to individuals in communities that have been disproportionately impacted by past criminalization of cannabis, communities of color, minority- and women-owned business, disadvantaged farmers and service-disabled veterans; establish a reasonable tax structure related to the sale of adult-use cannabis; provide for personal cultivation; ensure access to medical cannabis is maintained and expanded; recognize community priorities through local opt-out provisions from the adult-use market; and other priorities deemed necessary and appropriate.

The Assembly maintains that it is critically important that revenue generated from legalization of cannabis be invested in communities that have been disproportionately impacted by past criminalization of cannabis, including creating a Community Grants Reinvestment Fund. Therefore, the Assembly will further continue discussions on how to direct revenue to ensure that funds will be used for: public education; job creation, skills development and training; social justice and reentry services for impacted communities; substance use disorder services and mental health services; community-based supportive services; expanded training for state and local law enforcement to maintain driver safety; and any other uses deemed necessary and appropriate.

“This is not about getting in the red zone anymore,” he added, using a football metaphor. “We have to get over the goal line this time. We need the seven points.”


StaffJanuary 11, 2021
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Governor Andrew Cuomo confidently stated that New York will legalize adult-use marijuana in his state of the state address on Monday.

“We will legalize adult-use recreational cannabis, joining 15 other states who’ve already done so,” Cuomo said in the speech. “This will raise revenue and will end the over-criminalization of this product that has left so many communities of color over-policed and over-incarcerated.”

This statement follows last week’s announcement that he would pursue legislation in 2021 to establish a legal market for marijuana in New York, which would effectively end marijuana prohibition in New York State and create a system to tax and regulate marijuana in a manner similar to alcohol for adults over the age of 21.

New York lawmakers pre-filed a bill to legalize marijuana last week. The legislation was introduced in the Senate by Sen. Liz Krueger (D) and 18 other lawmakers. The new legislation is identical to a version she filed last year which never went further than being filed.

Melissa Moore, New York State Director of the Drug Policy Alliance and member of Start SMART NY Coalition (Sensible Marijuana Access through Regulated Trade) said, “By including marijuana reform in today’s State of the State address, Gov. Cuomo has signaled that this is a top priority in this year’s legislative session. When it comes to responsibly regulating marijuana, it’s critical that we don’t just get this done, but we get it right. Equity must be the guiding force, and we will continue to work with the Governor’s administration and legislative leaders to ensure any new law comprehensively addresses the harms to communities wrought by the war on drugs through dedicated community reinvestment. New Yorkers are more ready than ever to create a new paradigm for marijuana reform. Let’s make 2021 the year for marijuana justice.”

Under the Governor’s proposal, a new Office of Cannabis Management would be created to oversee the new adult-use program, as well as the State’s existing medical and cannabinoid hemp programs. Additionally, an equitable structure for the adult-use market will be created by offering licensing opportunities and assistance to entrepreneurs in communities of color who have been disproportionately impacted by the war on drugs. Once fully implemented, legalization is expected to generate more than $300 million in tax revenue.


Debra BorchardtJanuary 6, 2021
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8min9401

New York’s Governor Cuomo announced he will pursue legislation in 2021 to establish a legal market for marijuana in New York, which would effectively end marijuana prohibition in New York State and create a system to tax and regulate marijuana in a manner similar to alcohol for adults over the age of 21.

Under the Governor’s proposal, a new Office of Cannabis Management would be created to oversee the new adult-use program, as well as the State’s existing medical and cannabinoid hemp programs. Additionally, an equitable structure for the adult-use market will be created by offering licensing opportunities and assistance to entrepreneurs in communities of color who have been disproportionately impacted by the war on drugs. Once fully implemented, legalization is expected to generate more than $300 million in tax revenue.

“Despite the many challenges New York has faced amidst the COVID-19 pandemic, it has also created a number of opportunities to correct longstanding wrongs and build New York back better than ever before,” Governor Cuomo said. “Not only will legalizing and regulating the adult-use cannabis market provides the opportunity to generate much-needed revenue, but it also allows us to directly support the individuals and communities that have been most harmed by decades of cannabis prohibition.”

Melissa Moore, New York State Director of the Drug Policy Alliance and member of Start SMART NY Coalition (Sensible Marijuana Access through Regulated Trade) said, “New York still has the opportunity to lead the country on cannabis legalization by establishing the most ambitious and progressive legalization program in the U.S. and implementing cannabis legalization from a social justice lens where other states have fallen short. 2021 is the right time for marijuana justice in New York and the budget period is a crucial time for advancing legalization, which can be an economic engine driving wealth and equity in marginalized communities and providing space for alternative economic systems—if we work intentionally.”

She went on to say, “Governor Cuomo and the legislature can cement New York as the national model for marijuana legalization by centering community reinvestment, equity, and justice within our comprehensive reform. We can do this by making our legalization effort one that benefits those who have been harmed by prohibition and focusing on creating equitable jobs and small businesses across the state as New York looks to recover from the pandemic. Given New York’s appalling history with racially-biased marijuana enforcement, we must be bold and innovative in creating justice and equity.”

Cresco Labs’ (OTC: CRLBF) CEO Charlie Bachtell said, “We applaud Governor Cuomo for calling for the legalization of adult-use cannabis in the State of New York. We support his equity-centric approach to legalization as it will have a transformational impact on the state’s constituents, creating opportunities for those impacted by the War on Drugs and ensuring that cannabis develops into a responsible and respectable industry in New York.”


Debra BorchardtApril 16, 2020
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As part of its announced organizational overhaul, Canopy Growth said it will cease its farming operations in SpringfieldNew York, due to an abundance of hemp produced in the 2019 growing season.  The company said it will continue using this supply to produce hemp-derived CBD products for the US market.

Just one year ago Canopy announced a key milestone in establishing its Hemp Industrial Park in the Southern Tier region of New York State. It has secured a 308,000 sq. ft. facility on a 48-acre property in Kirkwood, NY. That was back when Bruce Linton was the CEO.

The company said that design development would begin immediately with construction expected to start this summer. Canopy said in a statement that its vision for the property is to build the infrastructure necessary to support hemp-derived cannabinoid extraction and related manufacturing together with providing an opportunity for participation by other businesses in the hemp industry.

In a boost to the New York cannabis industry Canopy said it would begin hiring senior leadership in late 2019 and recruit the full workforce in mid-2020. Canopy Growth also noted that it had also begun securing farm capacity to supply enough hemp for its own future extraction and formulation activities within the park. The company intended to prioritize farms within New York State for the supply of hemp at this site.

New York State granted a hemp license to Canopy Growth in January of 2019, allowing Canopy to establish operations in the state and build a facility for hemp-derived cannabinoid extraction and processing for various applications. The new hemp facility will be capable of producing tons of hemp extract on an annual basis.

Tax Break

In November, Canopy was told it would receive a standard 15-year payment-in-lieu-of-taxes deal, qualifying for a 39% reduction in property taxes for the first five years of the agreement. When all is said and done, their tax break will equate to $1.7 million.

According to the Binghamton Press, starting in 2020 and until 2024, Canopy was expected to pay $192,000 in property tax payments versus a full tax bill of $312,000. From 2025 through 2029, the payments will be $252,000. Beginning in 2030 through 2034, the company will pay $282,000.

Go Farm Hemp filed a $1.9 million lawsuit last month against Canopy Growth with regards to the New York farm. Canopy paid the deposit for the agreement and two installments but failed to pay the third installment that was due August 15, 2019. Canopy was accused interfering with Go Farm’s performance by “threatening seizure of Go Farm’s crops and property without any right or authority” according to the lawsuit.

 


Gretchen GaileyJanuary 29, 2020
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Governor Andrew Cuomo (NY) announced his plans to legalize cannabis for adult use in his state budget speech last week. He made the announcement with such enthusiasm some think legalization is an actual possibility this year. A major stumbling block in 2019 was sorting out the social and criminal justice issues that come with cannabis legalization, it will be so again this year.

Can the Empire State overcome the usual pitfalls and set up a market that will finally address those disproportionately affected by the War on Drugs?  Unlikely.

If we look closely at the Cuomo cannabis plan there are red flags. According to Cuomo’s budget, “the program will limit the number of producers and retail dispensaries to guard against a market collapse.” 

That may sound good but time and again states that have limited licensing markets face serious product shortages, increased consumer cost, and greater startup expenses that ultimately keep illicit markets going. 

Fewer licenses at higher costs mean fewer entrepreneurs. In many markets the initial capital requirements are so high minority entrepreneurs can’t compete. 

Cuomo says that he wants to “encourage equity through craft growers and cooperatives, and provide training and incubators to ensure meaningful and sustained participation by communities disproportionately harmed by cannabis prohibition.” If you read between the lines, that means the minorities who cannot meet the state’s high standards for a license will be thrown a bone and be allowed into a collective of other potential unworthy license holders who won’t be able to compete with the deep pockets of more established brands. None the less, come election day, it may seem to some that the Governor kept his promise for social and criminal justice.

The budget also says, “the Office of Cannabis Management will administer social equity licensing opportunities, implement an egalitarian adult-use market structure….” 

The fastest way to develop an egalitarian cannabis model is unlimited licensing, low barriers to entry, access to capital, ending “grandfathering” of medical market license holders, and a strict government agency that ensures access to minority entrepreneurs and polices abuse like shell companies scooping up licenses. 

While a truly free market is the American way, that free market needs to be tempered with reasonable regulation.  However, that regulation should not limit the number of licenses, or make licenses inaccessible to less established entrepreneurs.


William SumnerJuly 30, 2019
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On July 29, 2019, New York Gov. Andrew Cuomo signed into law a measure that reduces the penalties for cannabis possession.

“While the failure to pass a comprehensive legalization bill is an unfortunate loss to the taxpayers of New York, the decriminalization of small amounts of cannabis is significant progress for social justice initiatives, an underreported aspect of the legalization movement,” said Evan Eneman, CEO of MGO|ELLO Alliance, a cannabis finance and banking firm.

Although New York decriminalized the possession of 23 grams or less of cannabis in 1977, tens of thousands of New Yorkers have still found themselves arrested and charged with possessing small amounts of cannabis. Between 2008 and 2017, approximately 360,000 people have been arrested for cannabis possession, the majority of which have been persons of color.

“Communities of color have been disproportionately impacted by laws governing marijuana for far too long, and today we are ending this injustice once and for all,” Cuomo said in a statement. “By providing individuals who have suffered the consequences of an unfair marijuana conviction with a path to have their records expunged and by reducing draconian penalties, we are taking a critical step forward in addressing a broken and discriminatory criminal justice process.”

Despite recent legalization developments, THC drug tests still remain common and are performed by up to 63% of US employers. As a result, medical marijuana patients may still need to detox from weed before applying for a job.

Though the majority of New York residents support cannabis legalization, the state legislature failed this year to pass a full-legalization bill. The primary reason for the bill’s failure was due to disagreements over diversity requirements for licensees. To many, the recently passed decriminalization bill is seen as a stop-gap measure while the legislature works out the details of full legalization.

The new law reduces cannabis possession to a violation punishable by a fine and removes criminal penalties for cannabis possession under two ounces. The measure also creates a process for individuals charged with cannabis possession to have their records expunged, both retroactively and for future convictions.

Individuals caught possessing cannabis will be fined $50 for the first offense and fined $200 for a second offense within three years of the first violation. Those caught for a third time within three years will be subject to a $250 fine and/or 15 days in jail. The new law will go into effect on August 29, 2019.

Medical Marijuana Inc.’s (OTC: MJNA) Dr. Stuart Titus said, “New York has a history of leading the way in many legislative policies for the U.S. and we hope that this new decriminalization measure in New York will set an example for other states, and the federal government to follow.”

The illegal nature of cannabis hasn’t frightened the investors away. Eneman added, “The cannabis industry isn’t waiting for regulators to catch up, as demonstrated by the record-setting pace of venture capital investing, as detailed in the MGO | ELLO Cannabis Private Investment Review. The report shows investment exceeding $1.3 billion already through the first half of this year as compared to $1B in total in 2018. Investors have a strong appetite for cannabis and they aren’t letting roadblocks like legalization stand in their way.”

 


Debra BorchardtApril 29, 2019
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4min35410

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC) announced a key milestone in establishing its Hemp Industrial Park in the Southern Tier region of New York State. It has secured a 308,000 sq. ft. facility on a 48-acre property in Kirkwood, NY.

The company said that design development would begin immediately with construction expected to start this summer. Canopy said in a statement that its vision for the property is to build the infrastructure necessary to support hemp-derived cannabinoid extraction and related manufacturing together with providing an opportunity for participation by other businesses in the hemp industry.

“As we establish a stronger foothold in the exciting US market, we want to do so in a way that prioritizes local vendors and creates meaningful career opportunities for people in the communities where we operate,” said Bruce Linton, Chairman & co-CEO, Canopy Growth. “The vision for our investment is to create an eco-system that inspires new entrepreneurs and generates more economic stimulus than a single company can offer. As we build the facilities, we’ll also attract like-minded businesses who share our excitement for the emerging hemp and hemp-derived cannabinoid markets.”

New York State of Mind

In a boost to the New York cannabis industry Canopy said it will begin hiring senior leadership in late 2019 and recruit the full workforce in mid-2020. Canopy Growth also noted that it has also begun securing farm capacity to supply enough hemp for its own future extraction and formulation activities within the park. The company intends to prioritize farms within New York State for the supply of hemp at this site.

“We welcome Canopy Growth to Broome County with open arms. We haven’t seen an investment like this in Broome in some time, and we’re so excited a company like them is setting up shop in our area,” said Broome County Executive Jason Garnar. “With Canopy Growth coming to Broome County we look forward to seeing the benefits in job investment.”

Now that Canopy Growth has secured its building, the company said it expects to begin work quickly on Pine Camp Drive and with local construction teams retrofitting the facility, operations will scale-up quickly. It was once a vacuum parts building. It is expected that the operations will create hundreds of new local full-time positions, in addition to the contracted construction workers.

NY Hemp

New York State granted a hemp license to Canopy Growth in January of this year, allowing Canopy to establish operations in the state and build a facility for hemp-derived cannabinoid extraction and processing for various applications. The new hemp facility will be capable of producing tons of hemp extract on an annual basis. In 2018, Canopy Growth acquired leading hemp research company, ebbu, Inc. The R&D, along with ebbu’s Intellectual Property will be applied directly to Canopy Growth’s hemp and THC-rich cannabis genetic breeding program and its cannabis-infused beverage capabilities.

Canopy also said in its statement that it will begin approaching third-party organizations to join the ecosystem. Canopy Growth is eager to attract businesses and researchers focused on every application of the hemp crop such as fibers, seeds, and hemp-derived cannabinoids.


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