NY Cannabis Insider is hosting a full-day “problems and solutions” summit at the Crowne Plaza Hotel in Albany on May 18. Learn more and buy tickets here.
Jeffrey Hoffman is a New York City-based attorney who hosts “Ask Me Anything about Cannabis Legalization in New York” each week on LinkedIn. Hoffman and NY Cannabis Insider have partnered to bring those sessions into print in a Q&A format.
Hoffman’s practice focuses on cannabis industry clients, including licensees in the adult-use market, practitioners in the medical cannabis space, and cannabis adjacent product and service providers. He has a particular interest in social and economic equity cannabis license applicants, and he also informs and assists those convicted of cannabis offenses in getting such convictions expunged from their record. He can be reached at info@420jurist.com.
Do you have any idea of revenue numbers for current operating dispensaries in New York?
Yes, I believe that they got a Housing Works number that they were somewhere in the neighborhood of a half million dollars a week. I thought I’d seen that number from Brad Racino, or somebody had released that number. That puts it about $26 million a year, and it’s not even summer yet. They do have a big first-mover advantage. I mean, they were the one that got all the press, they are there on Broadway and Eighth, their location is on a corner which is a spectacular location, and in just a very high traffic area. They’re literally across the street, and have literally in front of the store subway entrances, it’s just a brilliant location.
When will we start to hear about ventilation regulations for lounges?
You will start to hear about that when they release the proposed regulations for on-site consumption. There are nine standard license types in the cannabis law here in New York, we have proposed regulations for seven of them – although we do have a sprinkling of delivery. So the two we don’t have full regs for are delivery and on-site consumption.
Even though technically, you’re only supposed to be able to get one kind of license – even in the supply tier – let’s say you get a cultivation license; you can also get one processing license and one distribution license for the cannabis that you grew. So that is sort of half collapsing, or quasi collapsing. They’re not fully collapsing the way they are in retail, but they are saying that if you do get a cultivation license, you can get one processing and distribution license of the cannabis you’ve cultivated. Similarly, if you have a processing license, you can get one distribution license for the goods that you processed.
That the way it’s going to work. If you have a dispensary license, you are going to be able to do delivery and on-site consumption as of right now. And that may change in future regs. In fact, the point I was getting to here is that on May 11, they’re going to release the putative final regs of the seven, but we’re still not going to have full delivery or on-site consumption.
So the actual question was, ‘when do we start to hear about these ventilation requirements,’ and the ventilation requirements are going to be when the OCM decides to start moving on those regulations.
What’s the deal with zoning in the NIMBY areas, or industrial parks, particularly on Long Island and other parts of the state that are not super in favor of cannabis legalization?
You’re seeing some fairly draconian zoning, and I do think OCM is going to probably hack down on this a bit in the regs on May 11. I was talking with [OCM Chief of Staff] Axel Bernabe, and he thought us lawyers should start suing municipalities over these types of things. I think we’d have to wait until the regs are final, but state law preempts local law. The open question is: how much can the localities actually do? So, who knows? Maybe that’s a good idea. Maybe we ought to start forcing the hands of some of these places that are not allowing cannabis companies to open like normal businesses.
Everyone knows that I don’t think the cannabis rules should be any more stringent than alcohol rules. I don’t have anything against alcohol – I like to have a fine adult beverage every now and then – but there’s no question that alcohol is probably an order of magnitude more destructive in our society, maybe two orders of magnitude more destructive in our society. I guess I do understand from the perspective of, ‘alcohol has been legal in the US for 90 years again now,’ but we do have a relationship with cannabis here in the United States. I mean, everybody knows who Snoop Dogg is, and I guess some people don’t like it. There’s plenty of people that don’t like alcohol. But why should the cannabis laws be more stringent than the alcohol laws? It doesn’t make a lot of sense.
There ought to be able to be cannabis dispensaries anywhere that there are liquor stores, and I think there ought to be on-site consumption anywhere that there are bars. The alcohol rules should not be any less stringent or any more stringent. Cannabis rules should not be any more stringent than alcohol rules.
Will you be participating in the NY Cannabis Insider Problems and Solutions event May 18 in Albany?
I’ll be there, absolutely. I’m going to do a lot of listening that day, and I would really like to hear what other people think. I think this is going to be a great event to do that. It would be great if it was a constitutional convention of cannabis, and like we were going to be able to decide in that room what was going to happen for cannabis for the state, because I think we could come up with some good ideas. Hopefully there will be some legislators there because it is in Albany, so maybe they’ll come hang out with us, and contribute.
But yes, I will be there up in Albany. I’m going to head up there the night before. I think the event is the 18th, so I’m going to head up there on the 17th stay overnight at the venue. So if you’re in Albany, or if you’re going to Albany are going to
be staying there, we’re going to party hard.
What are your thoughts on the lawsuit filed by Coalition for Access to Regulated & Safe Cannabis against the social equity program?
The lawsuit is not against the equity program, per se. It’s against the justice-involved program again, and in fact, what the lawsuit is saying is get on with the social equity program, get on with the standard licensing, which is where the equity program is. You will apply as an equity applicant as part of the standard licensing, which is coming later this year. CAURD was not a social equity license, it was a justice-involved license. To be eligible, you had to have a cannabis-related conviction and a two year profitable business. It is not a social equity license. This is a big misconception that folks have had, and I get people that are like, ‘Well, isn’t justice-involved also equity?’
The point is, is that we’re lawyers, and words matter; when we talk about things, these words really matter. So this license was the justice-involved license. If you mean the group going after the justice-involved license, I hope that it’s moot. That ultimately, what happens is the court is like, ‘yeah, you’re right, but this is all moot.’
What they’re going on here, is that there’s a section in the enumerated powers of the Cannabis Control Board that says ‘yes, the board can do pretty much whatever it wants, including creating new licenses and opening licensing periods.’ But it says, however, the first retail dispensary licensing application period has to be open to everyone at the same time. I’ve had a lot of people I respect tell me that means 10 different things, and none of them agree with each other. I think what it means is the plain letter language of it, which is that when you open the application period for retail dispensary licenses, that has to be open to everyone at the same time. And the question is, did CAURD violate that? I don’t want to weigh in on that, because I’m not a judge – and who knows, a judge will weigh in on it – but what I’m hoping is that it’s moot.
Can licensed delivery businesses deliver anywhere in your state they want?
I believe the answer is yes. I don’t believe there are geographic limitations. The opt in and opt out areas were able to opt out physical dispensaries and a physical on-site consumption lounges; they were not able to opt out of delivery. Let’s say you have a dispensary in Queens, you could deliver to parts just across the border in Nassau County that have opted out of dispensaries but could not opt out of delivery. I don’t think that there is a geographic limit that I’m aware of, and if somebody is aware of it, please post – but I don’t think there is.
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