Cannabis summit brings pot growers, entrepreneurs, consultants together in NYC
Brooklynites aim to get in on marijuana ground floor
Hotter than hot: Investors, growers, entrepreneurs, community leaders, elected officials and the curious — many from Brooklyn — came together at the Metropolitan Center in Manhattan on Tuesday to hear about opportunities in a “regulated cannabis market” in New York state.
The atmosphere was intoxicating, reminiscent of the 1990s dotcom gold rush. The sensation of big money, somewhere nearby, mixed with the almost religious fervor of empowerment. Expert panels discussed issues relating to licensing, taxes, social equity and reparations, farming in skyscrapers, mistakes made by Colorado, Canada (which legalized marijuana on Wednesday) and California, testing problems and the realities of doing business in an area so gray that most banks won’t even accept deposits.
The 2018 Cannabis Summit, organized by Capalino+Company, took place on the swell of what appears to be unstoppable momentum for legalized recreational pot for adults in the state.
State Sen. Liz Krueger, Senate sponsor of the Marijuana Regulation and Taxation Act (MRTA), received an introduction in a tone normally reserved for rock stars. (The Assembly sponsor of the bill is Assemblymember Crystal Peoples-Stokes.)
The adulation “helps explain how I became the queen of legalized marijuana,” Krueger joked. When she first introduced the cannabis bill almost five years ago, “Most people said, ‘Are you crazy?’ and ‘What the hell are you doing in this issue?’”
She said the answer was the anti-poverty work she did for 20 years before she became a state senator.
“It was really because of the statistics I saw in New York City of the rate of which we were arresting young people of color for using cannabis. It was about 50,000 kids a year at that time, the end of the Bloomberg administration. I saw the criminal justice system, the arrest process, was statistically all happening to black and brown people. And I knew that in my white district, my young people were using cannabis at pretty much exactly the same rate as everybody else’s kids in the other neighborhoods, but nobody was ever calling me saying, ‘Help me, my kid got busted,’” Krueger said.
“I knew right away we had a problem with discriminatory drug enforcement policy that was disproportionally impacting young people of color and harming the communities they came from,” she said.
On the business side, Krueger feels the medical marijuana model made a mistake in keeping a “vertical monopoly.” She wants to allow a broad array of different kinds of licenses for different types and sizes of companies. The State Liquor Authority model allows for mom and pop stores and small-batch brewers to succeed, she said, and she wants to replicate that model with pot.
Getting It Right from the Start
The state spends $678 million arresting and jailing mostly young people for possessing small amounts of marijuana, often giving first-time offenders a criminal record. That money could be used to go after real criminals, or utilized in affected communities for other purposes, Krueger said. Legalizing cannabis would also remove the drug cartel’s influence.
“I believe that we need to create a robust and broad market for legal cannabis in New York state which provides for taxation and regulation and job creation and economic distribution of the advantages of a new business model in New York. But with heavy emphasis on making sure that the communities which faced the most harm from 50 years of bad prohibition for a policy are not left out in the cold,” she said. “We need to get it right in the beginning in New York.”
That theme was repeated throughout the event, with one panel composed entirely of women hoping to help other women and minorities get a chunk of the market.
Getting a Piece of the Pie
Panel member Gia Maron is the executive VP of Women Grow, which offers information and resources for women getting into the cannabis business, and owner of a public relations firm in Clinton Hill, Brooklyn. She believes that cannabis could offer a model featuring women in leadership roles.
“I’ve seen canna-curious women come to Women Grow and one year later they’re in business,” she said. “The opportunities for women are vast.”
Maron told the Brooklyn Eagle that she believes there is room for the small to medium sized entrepreneur in the cannabis industry, especially in ancillary services.
“If it’s a plant-touching business, of course that limits your opportunity. But as an ancillary service, there are no limits for us in terms of how we can support the businesses in this space,” she said.
“So if you’re in Brooklyn and you know that we have this industry coming — and we have the first dispensary opening very soon right across from the Barclays Center — now we have to start thinking about what skill sets we can bring that can help support these businesses that are beginning to grow,” she said.
“They need everything, honesty,” she said. “I know so many nurses expanding into this space, architects who are expanding into this space. These dispensaries need designs. I know people who are electricians, who are in marketing, who are graphic designers.”
Bringing the Bud to Bed-Stuy
Medina Sadiq, executive director of the Bedford-Stuyvesant Gateway BID, told the Eagle she was looking at the cannabis business “from the standpoint of the district has substantial vacancies, new, beautiful locations, and we’re talking about the type of businesses we’d like to see in the area. I came to see what’s available.”
The social equity issues brought up “definitely apply to Bed-Stuy,” she said. The weekend before last “some of the same legislators who are here today had an open meeting of local people who were interested in the industry,” she said, including everyday entrepreneurs who are already crafting products, and who are “really ready. A lot of them are looking for brick and mortar.”
Despite all the talk of social equity at the conference, it’s not going to be easy or necessarily fair, Sadiq said.
“There is a general redlining — and I’m not just talking about in this industry — in business. Where people of color, for whatever reason, are not able to access the capital it takes to sustain businesses, so they may get just enough to open the doors but not enough to stay open. That’s what I’m hoping doesn’t happen in this industry,” she said.
Sadiq also said she was concerned “that people who will eventually get arrested for marijuana will get bigger fines and longer incarcerations” because they’ll be brought up on tax charges.
“The taxman’s going to get everything. If you look at the dispensaries, there’s a 30 percent tax.”
Cannabis and Faith in the Borough of Churches
Youth pastor Shellise Rogers runs a faith-based cannabis consulting firm called Sistah Rogers. She often brings topical marijuana products to her church, St. Michaels Evangelistic Association Temple, a Caribbean spiritual Baptist church in Brownsville.
Cannabis is a way to connect with people, Rogers said.
“People are feeling beings … A lot of what I do is bringing in an actual topical. Something that doesn’t smell. Something that takes their rheumatoid arthritis away. Takes away their need to utilize some type of pill to get rid of the pain. It changes the way they think about it, the way they feel about it,” she said.
Bringing Blockchain Technology to Cannabis Space
One problem in states that have already legalized marijuana is inconsistent results from testing, which sometimes require that whole batches be thrown out. (Weed that can be found in Brooklyn labeled “California” was supposed to be destroyed, one panelist said. It may be contaminated with pesticides, for example.)
So the need for accurate testing and tracking is high. One attendee, who insisted his name was Sean Thompson but who was referred to as “Sanjay” by those who greeted him at the conference, disclosed to the Eagle that “a blockchain-based cannabis company is about to disrupt the entire cannabis space. It’s called Marystrain.io. I don’t work with them, they have my full endorsement. I am a blockchain professional — and I smoke a boatload of weed.”
Marystrian.io, cofounded by Matthew Virtue, is a “blockchain lab based out of Bushwick, backed by Etherium,” said Thompson. According to the company’s website, the technology will be used to catalog the effects and potency of the various cannabis strains across markets.
Etherium is a blockchain-based distributed computing platform and operating system. Ether is the cryptocurrency generated by Etherium.
Jerome Dewald, founder of Two Worlds LLC, a financing incubator for the legal cannabis market, told the Eagle that the market has developed “very dramatically over the last year, year and a half, with Canada leading the way. Wall Street is not very happy seeing all those dollars going to Canada. So we’re starting to see more real cannabis companies that are on real markets, as opposed to being pink sheet penny stocks that I wouldn’t put in an IRA under any circumstances.”
For example, it’s possible to invest in a company like MedMen Enterprises which just bought PharmaCann, based in New York, he said.
MedMen announced last week its intent to buy medical cannabis provider PharmaCann LLC in a stock deal valued at $682 million, according to Marketwatch.
There are also opportunities in the real estate market.
“We have IIPR, which is Innovative Industrial Properties, a REIT that specializes in cannabis,” Dewald said. It came out around $10, and it’s now trading around $35 or $40.
“You’ve got Tilray, which opened at $17 a month or so ago” and is now in the $150 range. “It’s been a roller coaster,” he said.
“The best advice I could give to someone who’s not deep into this space like I am is to get a good advisor, and I would recommend Allen Brochstein, who runs a service called 420 Investor.”
Going to Happen
The feeling was strong throughout the day-long conference that the bill’s passage was probably inevitable.
“The governor is very, very interested” in moving forward in 2019, Krueger said.
While she said she couldn’t speak for Gov. Andrew Cuomo, “He may be interested in trying to roll out something in the State of the State address and then his budget proposal,” she said.
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