‘Ask me anything’ about NY cannabis with Jeffrey Hoffman: onsite consumption, John Q Public and the tipping point

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Jeffrey Hoffman is a New York City-based attorney who hosts “Ask Me Anything about Cannabis Legalization in New York” each week on LinkedIn. Hoffman and NY Cannabis Insider have partnered to bring those sessions into print in a Q&A format.

Hoffman’s practice focuses on cannabis industry clients, including licensees in the adult-use market, practitioners in the medical cannabis space, and cannabis adjacent product and service providers. He has a particular interest in social and economic equity cannabis license applicants, and he also informs and assists those convicted of cannabis offenses in getting such convictions expunged from their record. He can be reached at [email protected].

What can states such as Nevada learn from the success and failures of New York cannabis consumption lounges?

Well, at this point, I think it’s, ‘What can New York learn from the success or failure of Nevada consumption lounges,’ because they are one of the few places where there actually are consumption lounges.

I don’t think Nevada can learn anything from New York yet. I think that New York needs to learn some things from Nevada, although I don’t think that we have quite enough data points yet. Nevada, particularly in the Vegas area, is starting to kind of spool this up. But it’s not really at scale yet. I still think New York City is going to be number one as far as consumption, but that’s still in the near future.

Is it obvious to consumers which shops in New York City are legit and which ones illicit?

I don’t think it is obvious to them. What the state has done is they’ve provided a decal with a QR code that the legal stores put in the front of the store that is visible to the patrons as they enter.

What that QR code then does is it takes you to the Office of Cannabis Management website where they have a page that lists all of the legitimate stores. And that’s how you as a consumer would know. I don’t think they have a very large education effort about that. I don’t think it’s that robust. If you asked John Q Public how they would find out which of the stores in New York are legal, I don’t think John Q Public would know how to figure that out.

And, in fact, most people that I talk to, even in New York City and the other boroughs, actually think that it is the “niceness” of the dispensary that they’re in which determines whether it’s legal or not. So if they go to one of the “less nice” ones they think yeah, this place is illicit. But the really nice one – if it looks really nice, then people think that’s a legal store. So no, I don’t think that it’s obvious at all to consumers which shops in New York City are licensed and which ones are not licensed. Not at all.

Will there now be limits on the number of licenses as well as the geographic distribution requirements?

So there’s always going to be limits, right? There’s not going to be 100,000 cannabis licenses in the state of New York.

I think what the state is saying is that New York is not a limited license state like Connecticut. The state is going to look, and after some amount of time, if dispensaries are overflowing with customers in a region, then perhaps they would issue more licenses there.

But if the dispensaries are reporting tough times being profitable, they wouldn’t issue more licenses – you wouldn’t issue more licenses into an already saturated market, if some of the market participants –or all of them – are having challenges. So, it was never that New York was an unlimited state. It’s simply the state said, ‘we’re not going to do it the way the very limited license states did. We’re gonna look at the market and see: Do we have enough? Do we not have enough? Do we need a few more here? Maybe we need to have more licenses in Buffalo and fewer in Syracuse.’

And same thing with geographic distribution where I don’t think there’s a one-size-fits-all. There are going to be these rules about distance – you can’t be 1000 feet from this and 500 feet from that.

How do you think New York will handle federally legalized THC hemp products shipped into the state?

I think the state will make them illegal. I think they’ve already cracked down on the Delta-8 goods and my guess is that they’ll come for the other isomers because it undermines the regulated market.

Are consumption lounges legal now in New York?

Sort of. So, they are legal, but we don’t have the final regulations for them, so there has been no application for a license for them, so no one can actually open one. Once we have the regs and once they have opened the application, and once people file their applications and get a license, they will be legal and open. So right now they are legal, but none are open yet.

Are restaurants allowed to go for consumption licenses?

It’s very interesting. And I think the answer to that is we don’t know because the onsite consumption license is still really the one that we don’t have regs for – what we do have regs for now is the limited onsite consumption that they’re going to allow the dispensaries to do.

I do think the OCM is very interested in that. I do think that’s part of the reason why the main onsite consumption license is taking so long to get to us. And I am very hopeful that they will do that.

Do they allow deli-style flower sales in New York?

No, they do not. Everything is either already in a container or a pre-roll when sold.

What is the tipping point for cannabis legalization in the US?

The tipping point is a cloture vote in the US Senate. There is only one party in the US that moves cannabis legislation, and they couldn’t get it done earlier this century when they had the presidency and both houses of Congress.

Back when Obama had a cloture majority in the Senate and control of the House, you could have passed it – “Mr. Obama, sign this and we’re done” and cannabis is legal in the United States. You didn’t do it then. So you blew it. So now you need to get that again unless you want to blow up the filibuster, which it appears Chuck Schumer does not want to do. But anyway, the point being is that is the tipping point – when either party blows up the filibuster, and then the Democrats get in charge again, and they pass it. Or the Democrats again get a cloture majority (don’t hold your breath).

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