New York’s First Woman-Owned Dispensary Opens Tomorrow

Called “Good Grades,” the dispensary will also be the first legal cannabis store in the New York City borough of Queens. 

“With the opening of Good Grades in Queens, we’re continuing to build on our progress to create a safe, regulated cannabis industry in New York,” New York Gov. Kathy Hochul said in a press release on Monday. “New York is working to support entrepreneurs and ensure that consumers can purchase safe, legal products while supporting their communities.”

Hochul, the state’s first woman governor, has overseen the launch of the state’s regulated cannabis market. Her predecessor, former New York Gov. Andrew Cuomo, signed the bill legalizing recreational marijuana in 2021. 

The state formally launched the new marijuana market late last year with the opening of a dispensary in the East Village neighborhood of Manhattan. 

Good Grades will open this week as a “pop-up” store, according to the governor’s press release, and the business is supported by the New York State Social Equity Cannabis Investment Fund, which was a part of Hochul’s 2022-23 budget.

The fund “is a public-private limited partnership that will be formed to position social equity entrepreneurs to succeed in New York’s newly created adult use cannabis industry,” Hochul’s office says, and “will allow the state to invest in a private fund to finance the leasing and equipping of up to 150 conditional adult-use retail dispensaries in New York State to be operated by individuals who have been impacted by the inequitable enforcement of marijuana laws.”

The governor’s office said that, like other dispensaries backed by the fund, Good Grades opening as a pop-up presents “the opportunity to open on a short-term basis to fast-track sales, provide training opportunities for employees and start generating capital for their businesses.”

“After, they will close for final construction and then re-open on a long-term basis,” according to this week’s press release.

“I am thrilled to be opening the doors of Good Grades, the very first dispensary in Queens, New York,” said Good Grades owner Extasy James. 

“We are incredibly passionate about providing greater access to cannabis and breaking down the barriers that prevent so many people, especially those from marginalized communities, from experiencing the benefits of this amazing plant. We understand firsthand the stigma that has been attached to cannabis for far too long, and we are eager to join the thriving cannabis community to help change that. Our dispensary is a welcoming and inclusive space where anyone can come to learn, explore, and find the products that are best suited to their unique needs.”

New York City opened its third legal dispensary last month––not to be confused with the illicit cannabis retailers that have blanketed all five boroughs in the last two years. 

The first dispensary outside of NYC also opened to customers last month.

Earlier this month, the state announced that it would double the number of cannabis retailer licenses, and will now award 300 instead of the originally planned 150.

“With this expansion, more entrepreneurs will be able to participate in the first wave of this industry, allowing them to capitalize on the growing demand for cannabis products,” said Tremaine Wright, chair of the New York Cannabis Control Board. “As more businesses enter this market, the innovation and competition will increase, leading to better quality experiences for consumers. The expansion of New York’s cannabis market will benefit everyone involved in this exciting industry.” 

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New Lawsuit Against New York Cannabis Agency Filed

The New York-based Coalition for Access to Regulated & Safe Cannabis (CARSC) recently filed a lawsuit against the Office of Cannabis Management (OCM) on March 16. CARSC is an “unincorporated trade association” that includes a handful of organizations, including Acreage Holdings, PharmaCann, Green Thumb Industries, and Curaleaf, all of which sought to apply for a dispensary license in New York.

The lawsuit is requesting a judge to declare Conditional Adult-Use Retail Dispensary (CAURD) as unconstitutional, and state that the OCM and Cannabis Control Board (CCB) have overstepped their authority.

The lawsuit was filed with the Albany County Supreme Court by Feuerstein Kulick, claiming that the 2021 Marijuana Regulation and Taxation Act required both the OCM and CCB “the initial adult-use retail dispensary license application period … for all applicants at the same time.” Both agencies made the CAURD, which created a new license class, and allowed specific groups to apply for it, rather than “all applicants.”

“Rather than perform the tasks required by the MRTA—which would promote a safe and regulated cannabis industry for medical patients and adult-use consumers alike—CCB and OCM have improperly assumed the role of the Legislature to impose their own policies over those of New York’s elected officials and, by extension, their constituents,” the lawsuit states, according to Syracuse.com.

The lawsuit alleges that the CCB and OCM didn’t complete the requirements of the MRTA, and instead abused its power to create the CAURD. CAURD originated from New York Gov. Kathy Hochul’s Seeding Opportunity Initiative that was announced in March 2022, which “position individuals with prior cannabis-related criminal offenses” to earn one of 150 licenses, and an additional 25 to nonprofit organizations. It requires that an applicant must have been convicted of a cannabis crime in the state of New York, and also must have a “significant presence.”

The lawsuit alleges that a 20-month delay in proposed cannabis regulations is a violation of state law, among other evidence, including having cultivators grow thousands of pounds of cannabis without having retail businesses set up to sell it all.

In July 2022, OCM Executive Director Chris Alexander spoke with NY Cannabis Insider about the threat of a lawsuit such as this one. “I don’t have a concern about the challenge towards the retail opportunity, because the board has the power to create additional licenses,” Alexander said. “We think about legal challenges that may come to the program, but that’s why we stay as close to the law and the powers that law has given us as possible.”

One month before the CAURD application window ended in October 2022, a different lawsuit was filed that prevented the OCM from issuing licenses in five out of 14 areas: Finger Lakes, Central New York, Western New York, Mid-Hudson, and Brooklyn. The lawsuit alleges that CAURD violates the Dormant Commerce Clause, which “refers to the prohibition, implicit in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce.”

Another lawsuit filed by Variscite NY One, a Michigan-based company, was denied a license because it is 51% owned by an individual who has no “significant presence” in New York, and has a cannabis conviction in Michigan, not New York.

Syracuse.com states that 66 CAURD licenses have been issued so far, with the CCB announcing in March that it plans to increase the pool of licenses to 300. 

Sen. Jeremy Cooney, who co-sponsored the MRTA, addressed the concerns of the lawsuit in a statement to NY Cannabis Insider. “When we passed the MRTA, there was an understanding that the rollout of adult-use recreational cannabis and expansion of New York’s medical cannabis program would be complex, and encounter obstacles,” Cooney said. “While a potential lawsuit is undoubtedly a new challenge, we must not allow it to become a roadblock to progress. We must continue our efforts to deliver for operators, patients, and consumers as the legal process unfolds. We are committed to increasing patient access for the medical program and creating equity in the recreational market.”

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Northern Windfall: Wisconsin Residents Spend Millions on Pot in Illinois

For the state of Illinois, a thank you might be in order for its neighbors to the north. A newly released analysis says that Illinois collected millions of dollars in tax revenue from Wisconsin residents who crossed the border to buy legal marijuana. 

The two Great Lakes states border each other––Wisconsin abutting Illinois to the north––but they have very different laws on cannabis.

Illinois legalized recreational marijuana in 2019, and a state-sanctioned adult-use market launched at the beginning of 2020. The state also legalized medical cannabis in 2013.

Wisconsin, meanwhile, is one of the last remaining states where both recreational and medical marijuana are still illegal. 

Democrats in Wisconsin are determined to change that––including one lawmaker who released an analysis last week showing that the state is losing millions in potential tax revenue to Illinois. 

The report from Wisconsin’s Legislative Fiscal Bureau “estimated that $36.1 million of Illinois cannabis tax revenues in fiscal year 2022 were attributable to sales of cannabis made to Wisconsin residents.” 

The analysis “assumes that all sales to out-of-state residents in counties bordering Wisconsin were made to Wisconsin residents, which are estimated to constitute 7.8% of total Illinois cannabis-related tax revenue,” according to the report, which said that of “the sales made in counties bordering Wisconsin, $121.2 million, or 50.6%, of these sales were to out-of-state residents.”

“Relative to marijuana sales statewide, approximately 7.8% of total cannabis sales revenue in Illinois came from sales made to out-of-state residents in counties bordering Wisconsin in calendar year 2022,” the analysis said.

The report came at the request of Democratic state Sen. Melissa Agard, who has championed marijuana legalization proposals in the Wisconsin legislature for years. 

Agard, the Democratic leader in the state Senate, expressed frustration at the findings.

“It should upset every Wisconsinite that our hard earned tax dollars are going across the border to Illinois. This is revenue that could be going toward Wisconsin’s public schools, transportation infrastructure, and public safety. Instead, Illinois is reaping the benefits of Republican obstructionism and their prohibitionist stance on marijuana legalization,” Agard said in a statement last week.

Republicans hold majorities in both chambers of the Wisconsin legislature, as they have for more than a decade, which has diminished the chances for legalization. 

Wisconsin Democrats like Agard, and the state’s governor, Tony Evers, overwhelmingly support an end to the prohibition. 

“Republicans’ continued refusal to legalize marijuana is fiscally irresponsible. Wisconsinites paid more than $31 million – just in taxes – to Illinois in 2022. Wisconsin’s loss of potential revenue is even larger if we include taxes paid to Michigan, as well as Minnesota in the near future. Wisconsin is losing out on significant tax dollars that could be used to make our communities stronger, safer, and healthier,” Agard said in the statement. 

“We are an island of prohibition and the people of our state are hurting because of it. As seen in our neighboring states, legalizing marijuana for responsible adult usage will generate significant revenue for our mainstreets, safely regulate the existing illicit market, reinvest in our agriculture and farming heritage, support entrepreneurship, and address the massive and egregious racial disparities from marijuana prohibition,” Agard continued. 

“The fundamental aspect of our job as legislators is to listen to the people we represent. The people of Wisconsin have been asking the legislature to take up common sense measures that will push our state forward. We know that legalizing cannabis for responsible adult use is wildly popular among Wisconsinites, including the majority of Republicans.”

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Slow Pace of Dispensary Openings Leaves Fresno, CA. with Budget Shortfall

The slow pace of retail cannabis dispensary openings in Fresno, California has led to a budget shortfall of more than $3 million for 2023, prompting city leaders to consider changes to expedite the process to get the businesses up and running. 

California voters legalized cannabis for adults in 2016 with the passage of Proposition 64, a ballot measure that passed with more than 57% of the vote. Two years later, Fresno voters approved an ordinance to tax retail sales of recreational marijuana, setting the stage for adult-use cannabis dispensaries to open in the city. 

In 2019, the Fresno City Council amended civic ordinances to regulate recreational cannabis, and in 2021 the city began awarding the first of 19 preliminary retail cannabis dispensary licenses issued to date. But more than a year later, only two recreational marijuana retailers have opened in Fresno, a pace that is wreaking havoc with the city’s budget projections.

The city budget approved for 2023 projected that cannabis taxes and fees would generate $5.37 million in revenue for the city’s coffers. But with only two dispensaries open for business so far, the city is now projecting the cannabis tax revenue to be $2,113,100, a deficit of more than $3 million. Councilmember Nelson Esparza said that the situation is “insanity.”

“We keep over-projecting cannabis every fiscal year,” Esparza said.

Only Two Dispensaries Open So Far in Fresno

The dispensaries that have opened in Fresno, Embarc and The Artist Tree, began serving recreational marijuana customers on the same day in July 2022. The remaining 17 businesses awarded preliminary licenses have submitted their applications for conditional use permits (CUPs), which must be approved before building permits are issued and construction or renovations of the site can begin. So far, 13 of the 17 pending CPU applications have been approved, and new dispensaries could open as soon as May of this year. 

Sontaya Rose, Fresno’s director of communications, noted that the timeline for construction and opening the dispensaries is controlled by the business owners, not the city.

“So, we can’t say for sure,” Rose said in an email to The Fresno Bee.

“Overall, it is taking longer for the sites to open than was originally anticipated.”

City leaders and business owners in the cannabis industry cite several reasons for the slow pace of dispensary openings. Several of the coming dispensaries will be located in old buildings that require extensive renovations before they can open and begin serving customers, according to the city. Others have had to make accommodations for their landlords, including waiting for current tenants to vacate the building so renovations on the site can begin.

Lauren Carpenter, the CEO of Embarq, which has received preliminary approval for two cannabis dispensaries in Fresno, says that her company has experienced delays at both of the locations. The company is “working expeditiously to open our second location later this year,” Carpenter said.

“A variety of factors influenced the timing” of the first and second location, she added, “including site conditions, driving duration of build out and the speed in which tenants were able to vacate the premises.”

“Fortunately, our first location affords us the ability to serve Fresnans while training our team to become leaders in our second,” said Carpenter.

Lauren Fontein, founder of The Artist Tree, said that the state of California’s regulated cannabis industry is also influencing the opening of new businesses. Wholesale prices for cannabis have plummeted in the state, squeezing profit margins throughout the supply chain. High taxes and licensing fees for cannabis businesses also take a hefty bite out of the bottom. Many companies are struggling, and some have had to lay off workers to stay afloat.

“There’s much less an appetite for investing in the cannabis industry,” Fontein said. “It’s not this kind of cash cow business that people thought it was.”

Civic leaders in Fresno have looked to several jurisdictions for possible solutions and are considering several options to expedite the opening of additional adult-use cannabis retailers in the city. In West Hollywood, the city council amended its cannabis ordinance so more licenses could be issued, while Riverside conducted an additional round of licensing to add to the city’s roster of cannabis dispensaries. Fontein said that Fresno is considering adding deadlines to its ordinance to encourage a quicker opening of new dispensaries.

“The city just kind of needs to get practical at this point,” she said.

But the city has few options. While businesses are given a one-year deadline to submit CUP applications, the city ordinance does not have provisions that set a timeline for dispensaries to open for business.

Rose wrote in an email to the Fresno Bee that the city manager’s office is working with the staff at the city attorney’s office “to determine options for establishing additional deadlines for applicants to make progress towards opening.” But she was unable to offer a timeline to get the businesses up and running.

Until that happens, Fresno will continue to see a shortfall in projected cannabis tax revenues that could impact the city’s ability to provide services. 

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Washington Social Equity Application Nears Deadline

The state of Washington is set to dole out more than 40 new cannabis retail licenses this month to so-called social equity applicants––but the deadline is fast approaching. 

With the application period kicking off on March 1, qualified prospective license holders have until March 30 to apply. 

The Washington State Liquor and Cannabis Board, a state regulatory agency overseeing the two industries, is handling the social equity applications. 

According to the agency, more than 40 licenses that “were forfeited, cancelled, revoked or never issued will be available in specific jurisdictions across the state” as part of the program.

The Washington State Liquor and Cannabis Board says that, in order to qualify for the social equity cannabis program, applicants must meet the following criteria:

“At least a 51 percent majority, or controlling interest, in the applicant, must be held by a person(s), who has or have resided in Washington state for six months prior to the application date, and meets at least two of the following qualifications: lived in a disproportionately impacted area (DIA) in Washington state for a minimum of five years between 1980 and 2010 … OR applicant or a family member has been arrested or convicted of a cannabis offense; OR household income was less than the median household income within the state of Washington ($82,400).” 

According to Axios, applicants “who have served time in prison for a cannabis offense will get higher priority when it comes to distributing the social equity licenses,” as will those applicants who “make less than the state’s median income, and who have lived in areas with high rates of drug convictions, poverty, and unemployment.”

Social equity provisions have become the norm in states that legalize recreational cannabis for adults, as advocates have stressed the importance of remedying harms inflicted on individuals and communities in the era of prohibition. 

But in Washington, which became one of the first two states to legalize recreational marijuana back in 2012, those social equity provisions did not come until later. 

The ballot measure approved by voters there more than a decade ago, Initiative 502, “did not include provisions or create programs to acknowledge the disproportionate harms the enforcement of cannabis laws had on certain populations and communities,” the Washington State Liquor and Cannabis Board explained earlier this year, when it announced the more than 40 social equity applications that would be made available

The state created the social equity cannabis program in 2020, when the state’s Democratic governor, Jay Inslee, signed a bill into law that provided “the opportunity to provide a limited number of cannabis retail licenses to individuals disproportionately impacted by the enforcement of cannabis prohibition laws.”

“The LCB recognizes that cannabis prohibition laws were disproportionately enforced for decades and that the cumulative harms from this enforcement remain today,” the agency explains on its website. “In 2020, in response to a policy priority identified by the Board, the LCB developed agency-request legislation created the state Social Equity program, the Social Equity in Cannabis Task Force and the opportunity to provide a limited number of cannabis retail licenses to individuals disproportionately impacted by the enforcement of cannabis prohibition laws.”

But the state clearly still has a lot of work to do; as Axios noted, more than 10 years after the voters there made history, Washington’s cannabis industry “remains dominated by white entrepreneurs.”

The State Liquor and Cannabis Board reported in January 2020 that 82% of cannabis retailers in Washington were owned by white individuals. Only 3% were owned by Black residents, and 2% were Hispanic-owned. 

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Legal Weed Sales Projected To Grow 14% in 2023

Sales of legal cannabis in the United States are projected to grow by 14% in 2023, according to a recent report from Colorado-based cannabis industry market analysis firm BDSA. In an updated five-year global legal cannabis market forecast, the company reports that global spending on legal cannabis increased by 4.8% to $32 billion in 2022. BDSA projects that the global cannabis market will see a compound annual growth rate (CAGR) of 13.2% from 2022 to 2027, resulting in a total worldwide regulated cannabis market size of $59.6 billion by 2027.

The U.S. legal cannabis market has shown significant growth across the industry as more and more states legalize adult-use cannabis and medical marijuana. And while the industry’s growth slowed in 2022 in response to market conditions including rising inflation and economic uncertainty, BDSA expects the U.S. legal weed market to again show significant growth this year, projecting a 14% increase in the market in 2023.

“Legal cannabis spending slowed significantly in 2022 due to rapid price declines across all markets,” Roy Bingham, co-founder and CEO of BDSA, said in a statement from the company. “Despite this, our updated forecast predicts strong growth in the U.S. driven by developing markets, particularly the adult-use markets of Missouri, New Jersey and New York.”

Currently, 21 states have legalized cannabis for adults, while 37 states, the District of Columbia and three U.S. territories have passed laws to legalize the medicinal use of marijuana. Additionally, 11 states permit the use of low-THC cannabis formulations for medicinal purposes. Only Idaho and Nebraska continue to prohibit all forms of cannabis. 

Some Mature Cannabis Markets Contracted In 2022

The U.S. cannabis market posted rapid growth during the height of the COVID-19 pandemic as lockdowns kept consumers home and dispensaries were designated as essential businesses in many states. But last year marked the first decline in overall cannabis spending in some mature cannabis markets in the United States. In the West, early cannabis policy reform adopters California, Colorado, Nevada and Oregon saw a combined drop in spending on legal adult-use cannabis of 16.5% in 2022, according to the updated report. BDSA expects most mature cannabis markets in the U.S. to return to positive growth in 2024, although more slowly through 2027 than in the years leading up to the pandemic. 

Newer legal cannabis markets showed strong growth in 2022, despite the decline seen in more mature markets. BDSA also projects new legal adult-use cannabis markets to launch by 2027, predicting a start of legal sales in Maryland in 2024 and in Florida and Ohio in 2025. The launch of new recreational marijuana cannabis markets is also possible in Minnesota and Hawaii by 2027, BDSA notes, but the company does not expect to see federal cannabis legalization during the five-year forecast period.

Brian Vicente, founding partner of the cannabis law firm Vicente LLP, agreed that emerging markets will help fuel the growth of the legal cannabis industry in the upcoming years.

 “The future remains bright for the cannabis industry in the United States. Despite a recent setback at the polls, with Oklahoma voters shooting down legalization this month, we are still seeing other domestic markets expand and commence sales,” Vicente wrote in an email. “This includes significant revenue growth in newly-legal cannabis markets like Missouri and New Jersey, and also emerging medical markets like Mississippi. With additional states like Florida and Ohio looking likely to legalize in the next several years, we can expect continued expansion in cannabis sales.”

By 2027, U.S. sales of adult-use cannabis are forecasted to contribute 78% of the total spending on legal cannabis worldwide, up from 64% in 2022. U.S. legal cannabis spending is expected to grow at a CAGR of 11.3%, from $26.1 billion in 2022 to $44.5 billion in 2027, with the industry’s growth driven primarily by the New York, Florida, New Jersey and California recreational marijuana markets. 

Globally, cannabis markets outside the U.S. and Canada are forecast to grow at a CAGR of 40% to $9.5 billion in 2027, up from $1.8 billion in 2022. BDSA forecasts the Canadian market will see overall growth of 12% this year, increasing to a $5.7 billion market by 2027 at a CAGR of 6.3%. New adult-use markets in Germany and Mexico are expected to be the primary drivers of global growth, while existing limited medical cannabis programs are expected to expand, particularly in the European Union and Latin America.

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Connecticut Cannabis Sales Top $18 Million in February

Licensed cannabis sales topped $18 million in Connecticut during February, the first full month of regulated recreational marijuana sales in the state. Sales of adult-use cannabis began on January 10, only seven months after lawmakers passed legislation to legalize and regulate recreational marijuana.

Connecticut Governor Ned Lamont signed legislation to end the prohibition of recreational marijuana in June 2021, legalizing the possession of cannabis by adults 21 and older and creating a framework for regulated adult-use sales. The measure also included restorative justice and social equity measures, including provisions that led to the expungement of nearly 43,000 marijuana-related convictions at the beginning of the year.

The Connecticut legislature passed a bill to legalize the medicinal use of cannabis in 2012, leading to the launch of legal medical marijuana sales to patients with qualifying debilitating medical conditions in September 2014. Regulated sales of adult-use cannabis began in Connecticut at seven of the state’s existing medical marijuana dispensaries on January 10.

“Today marks a turning point in the injustices caused by the war on drugs, most notably now that there is a legal alternative to the dangerous, unregulated, underground market for cannabis sales,” Lamont said in a statement last month. “Together with our partners in the legislature and our team of professionals at the Department of Consumer Protection, we’ve carefully crafted a securely regulated market that prioritizes public health, public safety, social justice, and equity. I look forward to continuing our efforts to ensure that this industry remains inclusive and safe as it develops.”

Cannabis Sales Data Released On Friday

Last week, the Connecticut Department of Consumer Protection (DCP) released cannabis sales figures for February of this year, the first full calendar month of regulated adult-use cannabis. According to data provided by the department on Friday, total regulated sales of marijuana for the month came to more than $18.4 million. Total adult-use cannabis purchases in the state totaled about $7.02 million from February 1 through February 28, while medical marijuana sales contributed approximately $11.4 million to the monthly total.

Registered medical marijuana patients purchased 316,644 cannabis products in Connecticut last month, while adults 21 and older bought 168,565 adult-use cannabis items. Since the launch of recreational marijuana sales last month, the DCP’s Drug Control Division has approved more than 600 new brand names for products that may be sold in both the medical marijuana market and the adult-use market.

The DCP collected the cannabis sales data with its BioTrack seed-to-sale tracking system, which monitors the production, distribution and sale of all medical marijuana and adult-use cannabis merchandise in the state. In a press release, the department noted that it does not regulate prices, set sales expectations, or make revenue projections for Connecticut’s licensed cannabis market. 

The department noted that cannabis sales information will be made public on or about the tenth day of each month. All data is subject to further review by the DCP. Because Connecticut’s seed-to-sale tracking system was not operational until last month, sales figures for the medical marijuana market prior to January 10 are not available.

Purchase Limits On Recreational Weed in Connecticut

To ensure that there is a sufficient supply of cannabis for the state’s medical marijuana patients, purchases of recreational marijuana are currently limited to a quarter ounce of cannabis flower per transaction. Medical marijuana patients are permitted to buy up to five ounces of cannabis per month, with no quantity limits on individual transactions. 

In its notice last week, the DCP reminded consumers and patients that information about responsible cannabis use and the potential health risks of using marijuana is available online.

“Adults who choose to consume cannabis are reminded to do so responsibly, including storing cannabis products in their original packaging, locked up and out of reach of children and pets,” the department noted in its press release. “Resources regarding responsible cannabis use, as well as information about addiction and health risks is available at ct.gov/cannabis.”

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Top New York Democrats Seek To Change Cannabis Tax

A pair of influential New York lawmakers are seeking to overhaul the state’s tax structure for adult-use cannabis sales, which they say is currently too complicated.

Crystal Peoples-Stokes, the majority leader of the state assembly, and state Sen. Jeremy Cooney, both Democrats, announced a proposal on Monday that would make major changes to how the Empire State taxes recreational cannabis sales. 

As reported by NY1, under the proposed legislation, “the current tax which levies based on potency would be replaced with an increase in the current excise tax.” The outlet noted that it was “not immediately clear what the fiscal implications of the change would be if granted final approval.”

“After careful consideration, it became clear that we need to simplify the tax structure of adult-use cannabis,” People-Stokes said, as quoted by NY1. “As the state continues to build out licensed cannabis operations, a simpler tax structure will be better for businesses and consumers. It is imperative to establish the licensed cannabis marketplace as the best option for consumers and stamp out the illicit cannabis operations popping up all over the state. This new tax approach will ultimately lead to thriving cannabis businesses at all levels of the supply chain. We will see higher tax revenues, which will result in more funds being reinvested in communities and invested in education and other important programs.”

Cooney echoed that, saying that if New York is to meet its “goal of building the most diverse and inclusive cannabis market in the nation, we must create an environment where small businesses can thrive.”

“Replacing the potency tax with an increase in the excise tax will allow licensed operators, including social equity operators, to sell competitively-priced products and be less susceptible to undercutting by illicit market prices without sacrificing revenues to be reinvested and used for valuable community programming,” Cooney said.

According to an official legislative summary of the bill, the measure increases “the tax from nine to sixteen percent of the amount charged for the sale or transfer of adult-use cannabis products to a retail customer; removes requirements that records reflect the total amount of THC content of the adult-use cannabis products sold to or produced by persons who sell such products; makes related provisions.”

Peoples-Stokes was heavily involved in the effort to legalize marijuana in New York, which officially ended the prohibition on recreational pot use in 2021.

Last year, after the state approved the first 52 cultivation licenses for the new recreational cannabis program, Peoples-Stokes said that the state was on its “way towards realizing our goal of creating a viable and inclusive path for minorities and small farmers to have the opportunity to create generational wealth for their families and communities.”

Her new tax proposal comes at a time when the state is looking to expand the nascent cannabis program.

Last week, regulators in New York announced they are doubling the number of cannabis retailer licenses, going from an original plan of 150 to 300.

“With this expansion, more entrepreneurs will be able to participate in the first wave of this industry, allowing them to capitalize on the growing demand for cannabis products,” Tremaine Wright, chair of the New York Cannabis Control Board, said at the time. “As more businesses enter this market, the innovation and competition will increase, leading to better quality experiences for consumers. The expansion of New York’s cannabis market will benefit everyone involved in this exciting industry.” 

According to NY1, the new tax measure from Peoples-Stokes and Cooney is “being proposed as New York lawmakers and Gov. Kathy Hochul are negotiating a broader $227 billion budget plan that is expected to pass by April 1, the start of New York’s fiscal year.”

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Missouri’s First Month of Legal Recreational Pot Sales Tops $100 Million

Cannabis retailers in Missouri rang up more than $100 million in sales in February, the first month of legal recreational marijuana sales in the state. According to information from the Missouri Department of Health and Senior Services released on Friday, total cannabis sales came to $102.9 million last month. The figure includes nearly $72 million in adult-use cannabis retail purchases, while sales of medical marijuana in Missouri topped $31 million for the month.

Missouri voters legalized the recreational use of cannabis in last year’s midterm elections with the passage of Amendment 3, a ballot measure that was approved with more than 53% of the vote. Sales of recreational marijuana began at existing medical marijuana on February 3, less than three months after voters approved the adult-use cannabis legalization measure.

Andrew Mullins, executive director of the Missouri Cannabis Trade Association (MOCann), said that the opening month of regulated sales of adult-use cannabis in the state eclipsed the launch of recreational pot sales in neighboring Illinois in 2020.

“That’s more than double what Illinois did in a state with twice the population,” Mullins said about Missouri’s $71.7 million in adult-use cannabis sales last month. “So it really shows the interest and excitement for the new adult-use industry in Missouri.”

Mullins noted that if the pace of sales during the first month continues, Missouri cannabis retailers will sell more than a billion dollars worth of weed this year. He attributed a portion of February’s sales to visitors from adjoining states. Out of Missouri’s eight neighboring states, only Illinois has legalized recreational marijuana to date.

“Canna-tourism folks that may decide to come to Missouri to access and utilize cannabis,” Mullins told St. Louis Public Radio. “That seems to also be having an impact on the amount of sales that Missouri’s experiencing.”

Laurie Gregory, the chief marketing officer for Good Day Farm, said that the company’s dispensaries in cities such as Kansas City and Independence located near the borders with other states saw significant traffic from out-of-state customers.

“Opening weekend we had patients who drove from Texas and Illinois,” Gregory said. “There are states around Missouri that don’t have a program. Anecdotally, what we hear is that the border town dispensaries are having significant sales because of that.”

Regulated Weed Prices Lower Than Neighboring Illinois

Prices compared to cannabis retailers in the one neighboring state with regulated recreational marijuana sales were also cited as a factor behind the strong numbers in Missouri.

“At the different stores, we have flower strains priced from $25 to $40,” said Gregory. “In Illinois, it’s anywhere from $30 to $60.”

Jack Cardetti, a spokesman for MOCann, said that better access for consumers is largely behind Missouri’s strong sales numbers, noting that the state has 196 dispensaries to serve a population of 6 million, while Illinois has only 113 retailers but a population of 12 million. He also noted that taxation exacerbates the price difference between the two states.

“Not only are the retail prices lower in Missouri than Illinois, but when you actually factor in the higher taxes in Illinois, the take-home price is significantly lower,” Cardetti says. “We’ve seen time and time again, if you tax marijuana too much, people will continue to access the illicit market, which is exactly what legalization is meant to prevent.”

Former NBA star Al Harrington’s company Viola is backing two cannabis dispensaries that opened in St. Louis over the weekend, making the shops the only Black-owned retailers in the city, according to Daniel Pettigrew, the CEO of Viola STL. He said that the city has given the company a warm welcome and noted that the company’s dispensary on Iowa Street in St. Louis is the only cannabis retailer in the city with a drive-thru.

“We want people to be able to come into a safe, secure place, get their product and then get out, so that’s the main thing. It will really allow us to serve more customers,” Pettigrew told KSDK television news. “This neighborhood is in the community, so it was important to them, as we met with them, that they didn’t want a lot of people standing around and lingering in the area. It just allows us to complete the transaction in a safe secure environment, facilitate it, get everyone what they need and let them get on their way as quickly as possible.”

Bryce Chapman, a consumer who previously purchased marijuana from the unregulated market, said that buying from dispensaries is easier than buying from underground dealers. He added that he appreciates the consistent quality and clear pricing at regulated dispensaries, factors he said make him a repeat customer of the new shops.

“You can just go in, get what you need and leave,” said Chapman. “You don’t have to find the guy with the right kind of stuff or anything like that – you can just go get exactly what you need. I really like how scientific it is. Like, ‘Do you want this much THC or do you want a higher dose? Do you want sativa dominant?’ Before it was just like, I’ll just get what I can get.”

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California Cannabis Sales Declined in 2022

Finalized data from the California Department of Tax and Fee Administration shows that California cannabis sales declined in 2022. The decrease in sales is the first dip since adult-use sales began in 2018.

In 2021, the state collected $5.77 billion in adult-use cannabis sales, but 2022 numbers reflect only $5.3 billion for the past year—an $8.2% decrease. According to coverage by Forbes, many believe that expensive taxes and not enough dispensaries have contributed to this decline.

Cannabis cultivators in California have been trying to tell legislators about the issue. “Most of us farmers have been trying to tell the state [regulators] that the marketplace is imploding,” Johnny Casali, founder of Huckleberry Hill Farms, told Forbes. “The drop in retail sales means the customer is tired of paying the exorbitant taxes and are now buying it from a friend of a friend or the guy on the corner.” Casali explained how all of his product was sold in 2022, but he still experienced a loss of $50,000.

This loss is likely due to the decreased price per pound of cannabis statewide. American financial services firm Cantor Fitzgerald cites the wholesale price of cannabis at $665 a pound, which is a 26% decrease year over year. According to New Leaf Data Services, wholesale cannabis prices have dropped more than 50% between 2017 and 2022.

California has more than 800 licensed cannabis dispensaries, and cultivators grow more than can be purchased. Casali hopes that the situation will improve. “We are already getting orders for this season,” Casali said. “But without federal legalization, I don’t know how we fix our supply-and-demand problem.”

Cantor Fitzgerald analyst Pablo Zuanic states that there was a boost in California revenue gain due to increased sales during the pandemic, between 2020-2021. Zuanic believes that a return to more normal sales, on top of current inflation, is also contributing to the sales decline. He did state his belief that 2023 will be a year that California’s cannabis industry will bounce back though, comparing the 8% decrease in 2022 with the 68% increase in 2020.

Glass House Brands founder Graham Farrar told Forbes that he believes that Californians didn’t smoke less in 2022, but that the black market is just outselling legal flower. “Nobody prefers bathtub gin, right? You only drink bathtub gin if legal gin costs twice as much,” Farrar said. “If we could bring taxes on the consumer down, I think you’ll see more people in the legal market. And I think you’d actually collect more tax revenue.”

The overall decline of cannabis sales in general has pushed some cannabis brands to leave California. Garcia Hand Picked recently announced its departure from California. “We’re taking a pause in California,” said the brand’s parent company, Holistic Industries. “We want to ensure CA consumers have the highest quality flower for the long term, so we are in the process of choosing a new local partner for cultivation, production, sales, and distribution of Garcia Hand Picked in CA.”

Some regions are trying to help cannabis cultivators, such as Sonoma County, which recently eased tax burdens for some growers based on their operating size. Most recently, a California grant of $20 million has been earmarked to “provide local jurisdictions with resources to expand access to regulated cannabis products to underserved areas.”

In mid-February, the last Californian federal prisoner who was imprisoned for cannabis was finally released. After spending 15 years in prison, Luke Scarmazzo was released with the help of The Weldon Project. “The feeling is surreal. We’ve worked toward this day for so long,” Scarmazzo wrote on Facebook. “This was a huge victory for my family, friends, community and the entire cannabis movement. I’ll take a moment to enjoy this, but make no mistake, there’s still much work to be done—my people need to be free—and that hard work begins now.”

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