New Yorkers with marijuana convictions receive their first retail licenses

ALBANY, NY — New York State will soon announce plans to open its first retail marijuana outlets by the end of the year, giving applicants access to inventory of the drug grown by local farmers and sweeteners such as new storefronts offer by the state.

The only catch? To become one of the state’s first licensed retailers, you or a member of your family must have been convicted of a marijuana-related felony.

The policy, set to be announced by Gov. Kathy Hochul on Thursday, is part of a concerted effort to ensure early business owners in the state’s multibillion-dollar marijuana industry will be members of communities impacted by the country’s decades of drug wars .

By emphasizing marijuana believers and preparing their businesses for turnkey sales, New York appears to be trying to avoid pitfalls found in some other states, where designated “social justice” claimants and other struggling marijuana start-up companies are gravitating towards it are struggling, such as a lack of capital or competition from financially strong companies.

Chris Alexander, executive director of the state’s Bureau of Cannabis Management, said that by focusing early on “those who would otherwise have been left behind,” New York is “able to do something that has never been done before.”

To that end, Ms Hochul has proposed – and the legislature appears likely to pass – to include $200 million in this year’s budget to support the fledgling businesses, money that would be spent on finding, securing and renovating storefronts for retailers . This need for government help is particularly acute in New York City, where real estate prices have rallied as the worst of the Covid pandemic receded.

Half of all marijuana-related licenses have been granted under the law passed last March, allowing the possession and recreational use of marijuana in limited quantities by adults — including those for growers and other parts of the supply chain — are intended for women, minorities, distressed farmers, veterans and “individuals who have lived in communities disproportionately affected by the drug war.”

In New York, black and Hispanic residents have been arrested on marijuana charges far more frequently than white, non-Hispanic people for years.

Mr Alexander said he expected between 100 and 200 licenses would go to people convicted of a marijuana-related offense before the drug was legalized or to those who are “a parent, a guardian, a child, a… Spouse or family member” with marijuana have conviction.

Mr Alexander also said his office will evaluate applicants based on their business plans and retail experience.

The resulting dispensaries will be the first to open in the state by the end of the year, Mr Alexander said, although some others could open shortly after, perhaps in early 2023. The state has not capped the number of retail licenses it plans to issue; State officials said it will depend on market demand.

The proposed regulations were posted on the Cannabis Management Office’s website on Wednesday afternoon; The state’s Cannabis Control Board is expected to meet Thursday to review them, with approval awaited.

The first wave of applicants will likely include the likes of Baron Fajardo, a Harlem resident who plans to apply for a retail license. He was 16 when police found him smoking marijuana in his hallway and arrested him. Half a dozen more pot arrests followed as he went from smoker to dealer.

He said it is a blessing that New York plans to give people like him the opportunity to build on their experiences in a legal way that would allow them to provide for their families and begin to build generational wealth.

“As a person you feel down, a little bit down, like, ‘Oh, I’ve got a smudge on my name,'” said Mr Fajardo, now 34. “Well that smudge is actually the same thing that can help you. ”

Mr. Alexander said he thinks giving so-called “equity entrepreneurs” a chance to court clients before more established cannabis companies — including those currently operating medical marijuana facilities — start competing with them would help them succeed .

“I could hit the green button right now and have 40 pharmacies online,” said Mr. Alexander, speaking about the state’s existing medical pharmacies. “But instead, we decided that the people most affected actually have the space and the real runway to meaningfully participate.”

The state also hopes that some in the existing illicit marijuana market — sometimes known as “legacy” candidates — can be persuaded to apply for licenses instead, as some might be viewed as contenders for equity.

Initial reviews of the plan appeared positive, particularly among those dismayed by the state’s relatively lazy approach to both legalizing the drug and developing a retail industry.

Kassandra Frederique, executive director of the Drug Policy Alliance, a national group campaigning for more liberal drug laws, said New York seems to be learning from other states where promises of social justice “are not always what people want.”

“I think they try to solve the difficult things first, and I think that’s admirable,” she said, noting the capital needs of new businesses. “If you were the first to be hurt, you should be the first to benefit.”

State Senator Liz Krueger, an Upper East Side Democrat, said she expects the $200 million to go into the budget, which is due in April.

“We want them to be successful, which means we have to help some of them,” she said, adding that signing leases could be a difficult proposition for dealers who “until recently were selling illegally behind a building “.

“You may not have all the bank account, paperwork, and attorneys that a real estate agent wants to deal with,” Ms. Krueger said.

Preparations for New York’s entry into recreational marijuana will begin next week as the state plans to open up its application process to breeders who grow the drug on farms across the state and will ship their products to the new retailers to ensure that farmers doing this will have buyers when the market opens.

While recreational marijuana was legalized in New York last year, in a move that included the overturning of many previous convictions, retail sales adoption has been slow — allowing some entrepreneurs in tribal areas near the Canadian border to set up unlicensed dispensaries. Neighboring states like Massachusetts, which began selling marijuana in 2018, meanwhile began to attract eager customers from New York.

In addition to the persuasion-based criteria, Mr. Alexander said his office would weigh applicants’ likelihood of running successful businesses – a reminder that the state has both ideological and financial goals to achieve. 40 percent of the tax revenue from the new pharmacies will go to drug-affected communities.

Still, he was confident that there were many suitable applicants in New York, noting that the tight policing of marijuana had seduced hundreds of thousands of residents.

“We are confident that these people exist,” said Mr. Alexander. “We know a lot of people have done great things,” despite previous drug allegations.

Other states have tried to emphasize equity in their markets. But in California, for example, such efforts were hampered by strict regulations, high taxes, and significant barriers to entry that years later left the state struggling to quash a thriving black market in untested, untaxed weed.

And in New Jersey, social justice candidates hoping to benefit from a law similar to New York’s are struggling to find capital and secure leases — part of the motivation behind New York’s $200 spending million dollars.

News of the governor’s plan drew a scathing rebuke from state Senator Rob Ortt, the minority leader, who criticized the Democrats, who control Albany, for giving “hundreds of millions of taxpayer dollars to those who break the law.” to have”.

“This is just another reminder that Albany is no longer serving the needs of law-abiding New Yorkers to pay their taxes and do the right thing,” Mr. Ortt said in a statement.

Mr Alexander dismissed criticism of the decision to favor those with criminal records, saying the legislature made its intentions clear when passing the law last year, noting that the state regularly monitors economic development in a row funded by industries.

State MP Crystal Peoples-Stokes, the majority leader of the assembly, said the move to prioritize those with marijuana convictions was critical to ensuring the industry is not dominated by out-of-state conglomerates.

“We’re trying to do what no other state has done and that’s the focus on its citizens,” said Ms Peoples-Stokes, an architect of the law. “It’s critical because it’s a huge industry that’s going to grow our economy a lot, and I think it makes sense to start that growth with New Yorkers.”

Even people with no marijuana-related beliefs seem to support the state’s plan. Lulu Tsui plans to apply for a license to open a pharmacy in Brooklyn. Ms. Tsui expects to qualify as a social justice candidate because she is a woman and Chinese American, although she will fall short of those with such beliefs.

But that’s the way it should be, she said.

“You should get redress,” she said. “Your blood, sweat, sacrifice, time precedes all others.”