New York Prison Being Transformed Into $150 Million Cannabis Campus

The site of a former state prison in New York’s Hudson Valley is being transformed into a $150 million “cannabis campus” by Green Thumb Industries, one of the nation’s largest producers of legal marijuana. The planned facility at the former penitentiary in Warwick, New York will produce tens of thousands of pounds of cannabis for the state’s upcoming, recreational marijuana economy, which was legalized by legislators earlier this year.

Until 10 years ago, the 38-acre plot of land purchased by Green Thumb Industries (GTI) was part of the Mid-Orange Correctional Facility, housing inmates sent to prison for marijuana offenses and other crimes. The institution dates back to 1914, when it was opened as a drug and alcohol treatment center known as the New York City Farm. 

In the 1930s, the facility was converted to the New York State Training School for Boys to house wayward youth from the city. In the 1970s, the location was changed to a prison for adult inmates before being shut down by Andrew Cuomo in 2011, the governor of New York at the time.

At a groundbreaking ceremony for the new cannabis production facility held earlier this month, GTI president Ben Kovler noted the significance of the new use for the site.

“The irony of building a cannabis facility near the grounds of what used to be a federal prison is not lost on us,” Kovler said. “Change is really in the air; change is happening in the country; change is happening here. And we’re able to go from a place where people used to be locked up for marijuana [to one] where we’re going to employ people and enable opportunity, create wealth and create a positive economic environment.”

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New York Leaders See ‘A Brave New World’ in Cannabis

After the prison closed in 2011, local leaders began looking for ways to replace the 400 jobs the facility had provided the community. Warwick town supervisor Michael Sweeton set up a nonprofit development corporation and convinced the state to sell 150 acres of the property to the new entity for $4 million, which was paid with a loan from a local businessman. 

In 2018, the development corporation began selling plots of land, including a $526,000 sale of about eight acres to Citiva, a subsidiary of New York-based cannabis company iAnthus. Since then, a cannabis testing laboratory and a CBD products manufacturer have also opened facilities on the property.

GTI has invested $2.8 million for its 38-acre plot of land in a deal that included millions of dollars in tax incentives for the company. GTI plans to develop the property in three stages, creating 100 union jobs in the construction process. The first stage of construction will feature a $60 million cultivation facility spanning 200,000 square feet. Cannabis products manufacturing operations are also planned for the site, resulting in a facility worth an estimated $150 million. When completed, GTI’s cannabis campus will employ about 150 people earning salaries ranging from $50,000 to $100,000.

“Our fertile soil, educated workforce and close proximity to New York City sets us up to be the Silicon Valley for the cannabis industry,” state Sen. Michael Martucci said at the September 9 groundbreaking ceremony.

Town supervisor Sweeton said that the deal with GTI, which included property and sales tax breaks, would be a boon for the local economy.

“I think it’s just a home run for us,” Sweeton said. “We are a farm community economy—we have a lot of farm tourism, a lot of active farms, but we don’t really have much of the corporate realm. This is a brave new world.”

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New Marijuana Legalization Proposal Unveiled

Senate Majority Leader Chuck Schumer and fellow Democrats in the U.S. Senate on Wednesday unveiled a much-anticipated draft proposal to legalize cannabis at the federal level. The proposal, which is a discussion draft of a bill titled the Cannabis Administration and Opportunity Act, was introduced by Schumer and Senate Finance Committee Chairman Ron Wyden of Oregon and New Jersey Sen. Cory Booker at a Capitol Hill press conference.

If the legislation is passed into law, marijuana would be removed from the nation’s list of regulated drugs under the Controlled Substances Act, and instead be regulated and taxed like alcohol and tobacco. The measure also includes social equity provisions that will expunge low-level marijuana convictions and dedicate cannabis taxes to communities negatively impacted by the War on Drugs.

“For decades, young men and young women, disproportionately young Black and Hispanic men and women, have been arrested and jailed for carrying even a small amount of marijuana in their pocket, a charge that often came with exorbitant penalties and a serious criminal record because of the overcriminalization of marijuana, and it followed them for the remainder of their lives,” Schumer told reporters.

Key Provisions of the Legislation

  • Under the Cannabis Administration and Opportunity Act, the U.S. Attorney General would be directed to remove marijuana from the list of drugs regulated under Controlled Substances Act within 60 days of the legislation’s effective date. Government regulators would also create a new definition of “cannabis” under the Federal Food Drug and Cosmetic Act and develop a regulatory requirement for cannabis, similar to rules that govern other substances such as tobacco. The definition of cannabis would exclude hemp, which was legalized by the 2018 Farm Bill.
  • The authority to regulate cannabis would be transferred from the Drug Enforcement Administration to the Food and Drug Administration (FDA), the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Alcohol and Tobacco Tax and Trade Bureau (TTB). The FDA would be “recognized as the primary federal regulatory authority with respect to the manufacture and marketing of cannabis products, including requirements related to minimum national good manufacturing practice, product standards, registration and listing, and labeling information related to ingredients and directions for use,” according to a 30-page summary of the draft bill, which totals 163 pages. 
  • The bill also assesses a federal excise tax on cannabis products, with rates beginning at 10% and increasing to 25% five years after the measure is signed into law. Collecting taxes would be the responsibility of the TTB, with a portion of the revenue raised dedicated to supporting communities impacted by the War on Drugs. Federal judicial districts would be required to expunge the records of nonviolent federal cannabis offenders and those currently serving sentences for marijuana crimes would be eligible for a resentencing review hearing.
  • The legislation establishes three grant programs, including one that would fund nonprofits to provide services including job training, reentry services, and legal aid to individuals impacted by cannabis prohibition. The second grant program provides funding to state and local governments to make Small Business Administration loans to cannabis businesses owned by socially and economically disadvantaged entrepreneurs. The final grant program would provide funding for state and local governments to establish cannabis business licensing programs that minimize barriers for those impacted by the War on Drugs.

“For decades, our federal government has waged a War on Drugs that has unfairly impacted low-income communities and communities of color,” Booker said in a statement. “While red and blue states across the country continue to legalize marijuana, the federal government continues to lag woefully behind. It is time for Congress to end the federal marijuana prohibition and reinvest in communities most impacted by the failed War on Drugs.”

Although the bill would legalize cannabis at the federal level, states would make the decision on marijuana policy for their jurisdictions. Currently, 18 states and the District of Columbia have legalized cannabis for use by adults, and 37 have laws permitting the use of medical marijuana. 

Proposal Receives Swift Response

Following the release of the Cannabis Administration and Opportunity Act draft, which has been promised by Schumer for months, cannabis policy reform groups and representatives of the legal cannabis industry were quick to weigh in on the proposal. Erik Altieri, the executive director of the National Organization for the Reform of Marijuana Laws, said that the “days of federal prohibition are numbered.” 

“These actions by Senate Majority Leader Schumer and Senators Booker and Wyden reflect the fact that the supermajority of Americans are demanding that Congress take action to end the cruel and senseless policy of federal prohibition,” Altieri said in a statement from the group. “It is time for legislators to comport federal law with the laws of the growing number of states that have legalized the plant, and it is time for lawmakers to facilitate a federal structure that allows for cannabis commerce so that responsible consumers can obtain high-quality, low-cost cannabis grown right here in America without fear of arrest and incarceration.”

Ben Kovler, CEO of cannabis multistate operator Green Thumb Industries, noted that the cannabis legalization bill recognizes cannabis as a legitimate business sector and would allow cannabis companies long-sought access to capital markets and banking services.

“Cannabis continues to be disproportionately weaponized against communities of color, and we are thrilled that the Cannabis Administration and Opportunity Act has proposed expungement and community reinvestment measures to address the damage perpetuated by the failed War on Drugs,” Kovler said in an email. “While the bill leaves some questions unanswered, we believe it provides a tangible pathway to true federal legalization.”

Schumer acknowledged to reporters that he does not yet have the support necessary for the bill to gain approval in the Senate, saying the proposal is intended to begin the conversation on marijuana legalization. In May, a new version of a separate cannabis legalization bill that was approved by the House of Representatives last year was reintroduced in the lower chamber of Congress.

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Nevada Gives Green Light to Cannabis Consumption Lounges

Cannabis consumption lounges will be coming to Nevada next year under a bill signed into law by Democratic Gov. Steve Sisolak earlier this month. The measure, Assembly Bill 341 (AB341), was signed by Sisolak on June 4 after being passed by lawmakers in both houses of the state legislature in May. Currently, onsite cannabis consumption is only allowed at the NuWu Cannabis Marketplace on Las Vegas Paiute tribal land north of downtown.

The legislation permits two types of cannabis businesses. Retail cannabis lounges will be operated by licensed marijuana dispensaries, while independent cannabis consumption lounges will not be connected to a retailer. Both types of businesses will sell ready-to-use or single-use cannabis products for onsite consumption by adults 21 and older. Live entertainment is permitted, but alcohol will not be allowed.

“You can think of it like a bar, except obviously there will be no alcohol,” Assemblyman Steve Yeager, the sponsor of the legislation, said during a Senate Finance Committee hearing, as quoted by Forbes. “It could be a joint, an edible, it could be an infused food or infused soda, whatever the concept might be.”

Yeager added that more original concepts would also likely arise, noting that ideas such as fine dining restaurants serving cannabis-infused dishes, cannabis-friendly yoga classes, and comedy clubs offering marijuana products could all become reality. 

“Whatever you could think of could be possible,” Yeager said.

Ben Kovler, the CEO and founder of multistate cannabis operator Green Thumb Industries, said that the company is planning a lounge for the dispensary opened on the Las Vegas Strip by GTI in May under a licensing deal with the founders of the brand Cookies, rapper Berner and his cultivation collaborator Jai.

“When people come to Vegas for a bachelor party, a wedding, or just to see friends they haven’t seen in 15 months, they’re going to want to get together and consume cannabis and pretty soon there will be consumption lounges and they’re going to want to come to Cookies,” Kovler said. “What better place than Las Vegas? It’s an experience city in the middle of the desert.”

Consumption Lounges And Social Equity

Nevada’s foray into cannabis consumption lounges will bring a measure of equity to the state’s efforts at marijuana policy reform. Before AB341, cannabis consumption was legal under state law only in private residences with the owner’s permission, leaving renters and visitors open to the disparate enforcement of drug laws that has been repeatedly documented. Consuming cannabis in hotels and casinos is not allowed.

“Consumption lounges are important because they help protect people from prejudicial law enforcement or being fined or sanctioned in a way that causes real harm, that perpetuates the War on Drugs,” cannabis and social equity advocate and Las Vegas resident Noel Gordon told Filter.

The legislation also has social equity provisions built into the licensing regulations for cannabis consumption lounges. Nevada’s legalization initiative, passed in 2016, is lacking in robust equity measures. Such oversights are likely to doom or delay legalization proposals today, a fact seen in recent and eventually successful reform efforts in New Jersey and New York.

Qualified social equity applicants who wish to open a cannabis consumption lounge will receive up to a 75% reduction in application fees, which can cost as much as $30,000. Under the bill, a social equity applicant is a person “who has been adversely affected by provisions of previous laws which criminalized activity relating to cannabis, including, without limitation, adverse effects on an owner, officer or board member of the applicant or on the geographic area in which the applicant will operate,” according to the legislation.

Additionally, the number of independent cannabis consumption lounge licenses will initially be capped at 20, with half reserved for social equity applicants. But despite the efforts, Gordon is uncertain the social equity provisions will work as intended.

“I’m not all that optimistic we will still deliver on the social equity pieces,” Gordon said. “We still live in a prohibition lite version of legalization here in Nevada whereby you can purchase and consume cannabis in your home, but short of that, if you were to consume it on the sidewalk, in a hotel room, at a friend’s place, you will still be subject to some kind of criminal penalty or sanction.”

AB341 goes into effect in October, and state regulators are expected to begin accepting applications for cannabis lounges in July. But with regulations still being drafted, it is likely to be next year before the first consumption clubs open.

“The Cannabis Compliance Board is continuing to review the bill and its requirements in establishing consumption lounge licenses in Nevada,” said Tiana Bohner, public information officer for the agency. “The Board will aim to promulgate regulations and begin issuing licenses by early 2022.”

Bob Groesbeck, the co-CEO for Planet 13, a 112,000-square-foot Las Vegas dispensary billed as the world’s largest, said that his company has been planning a cannabis lounge for the site since AB341 was introduced two years ago.

“Our SuperStore is one of the only dispensaries with the space on site and the proximity to the Las Vegas Strip to create a truly Vegas style club,” Groesbeck said in a statement from Planet 13. “As with the rest of our dispensary we look forward to setting the bar and showing the industry what is possible when your goal is to Out Vegas, Vegas.”

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These Are The 7 Cannabis Stocks to Buy Before 2021

This year has seen the economy take one of its biggest hits ever. But it might also be one of the best times to buy stocks in cannabis. Thanks to the US election, residents in Arizona, Montana, New Jersey, and South Dakota all voted to legalize recreational marijuana. Due to which, cannabis stocks have been […]

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