All Smoke and Mirrors – Parsing the players in New York’s marijuana plan

Smoke and mirrors…

“Recreational marijuana is poised to become a major industry in the Empire State. A report last year by city Comptroller Scott Stringer estimated sales could total $3.1 billion annually, including $1.1 billion in the city. But the rules that Albany lawmakers hash out could be influenced by these key stakeholders.

ACTIVISTS. The National Organization for the Reform of Marijuana Laws, started in 1970 with funding from Playboymagazine, represents the old guard of legalization advocates. But in recent years NORML has adopted the social justice rhetoric and priorities of newer groups. Its New York leader, David Holland, has reservations about Gov. Andrew Cuomo’s Cannabis Regulation and Taxation Act. It fails to expunge the records of those convicted under current laws, bars individuals from growing any amount of their own weed, centralizes power and discretion in the Office of Cannabis Management and leaves apparent “wiggle room” for large national and international firms to dominate the market by establishing operations that grow, distribute and sell the product.

BLACK AND HISPANIC LEADERS. When actress-activist Cynthia Nixon pitched legalizing marijuana as a form of “reparations” during her gubernatorial campaign last year, Hazel Dukes, president of the NAACP New York State Conference and a Cuomo ally, dismissed the idea, saying, “We don’t need pot shops in our communities.” In an interview, Dukes reiterated her concern that dispensaries could become concentrated in low-income black and Hispanic neighborhoods, which has happened with liquor stores and homeless shelters. But she simultaneously expressed optimism that the governor’s proposal would provide jobs, tax dollars and business opportunities for individuals and areas disproportionately harmed by the war on drugs. The struggle to attain this balance will take place not only in Albany during the spring, but also when outlets begin to seek licenses, assuming legalization passes.

LIQUOR STORE OWNERS. In the past decade, Jeff Saunders and his group, Last Store on Main Street, held off repeated legislative attempts to let grocery stores sell wine. Now the liquor store leader intends to bring the same ferocity to a new battle: to let booze merchants offer cannabis products. Saunders cited studies finding or forecasting a drop in alcohol sales in states that have relaxed strictures on marijuana consumption and declared the matter an existential issue for his industry. He further posited that he and his compatriots are ideal marijuana sellers because they are already vetted and licensed to sell a restricted product to people over 21 and could immediately begin reaping revenue for the state. Moreover, he said, liquor store owners in the five boroughs are overwhelmingly nonwhite. But some advocates and policy experts are squeamish about having two intoxicants under one roof, and sources suggested this might prove the toughest legalization-related fight of all.”

“MEDICAL-MARIJUANA DISTRIBUTORS. MedMen, the California-based medical-marijuana giant led by CEO Adam Bierman, gave the maximum, $65,000, to Cuomo’s re- election campaign during the summer—just months after it opened a high-end pharmaceutical weed dispensary on Fifth Avenue. Why such generosity? Sources told Crain’s the company and its competitors want to preserve and expand their share of the market under the new legal regime, particularly in the production of smokeless extracts. The draft of Cuomo’s bill says at least 10 sites could distill marijuana essences, but only four retail outlets could wholly belong to the owners of those distilleries. It sets no limits on partially owned stores, though. While the legislation bars cultivators of recreational cannabis from owning dispensaries, growers registered under the 2014 medical-marijuana law could seek an exemption. That could give some 10 seed- to-sale operations economies of scale with no middlemen.”

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