New York, the home state of The Blinc Group and many other ancillary cannabis companies may have the opportunity of a lifetime in front of us. A bill is currently in consideration that if passed, would allow recreational marijuana in the empire state. Not only would this provide a major economic opportunity to companies in the cannabis sector, but would also further legitimize the industry, reducing social stigma and paving way for more professional working relationships.
Senate Bill, S3040, reintroduced by New York Senator, Liz Krueger (D, WF) is currently in committee in New York to legalize the sale of cannabis and regulate it similarly to alcohol in New York. S3040, also known as the Marijuana Regulation and Taxation Act (MRTA) was introduced by a coalition of 11 other New York Democratic Senators who co-sponsored the bill and community advocates.
The bill would provide two major shifts that would effectively end prohibition if passed. The possession of up to two ounces of marijuana would be legal for citizens 18 and older and individuals 21 and older could purchase cannabis, and cannabis products from state licensed dispensaries. This bill comes with the potential for a radical shift in growth for the legal cannabis industry in the state of New York which if passed would provide vast opportunities to direct sellers and ancillary cannabis companies while minimizing violent crime.
“Allowing adult personal use, with appropriate regulation and taxation, will end the heavily racialized enforcement”, said Kruger. She continues how “MRTA is the kind of smart, responsible, 21st century policy that our communities desperately need.”
The coalition also has announced Start SMART New York ( SMART standing for Sensible Marijuana Access through Regulated Trade) which is a cannabis legalization campaign in New York. SMART promotes the ideology that a well-regulated end to marijuana prohibition would provide greater racial and economic justice to New York state.
Legalization would provide a large market opportunity for the state, business owners, and ancillary cannabis services. Only about 1/9th of U.S. cannabis sale is currently legal, $5 billion of the approximately $45 billion USD industry. According to statistics by SMART, New Yorkers are spending $3 Billion on cannabis on the black market. Potential tax revenues range from 400 (NYC comptroller) to over 500 million (Huffpost). These high figues prove that if passed, there is tremendous opportunity for tax revenue as well as capitalization for new business owners to provide cannabis safely under the new regulation.
Along with the expected revenue, the bill itself contains sections that are small-business-friendly.
The sale will be carried out under a micro-license structure, similar to New York’s craft beer and wine industry. This structure allows small business owners, who often have less access to financing to produce small batches of consumable cannabis.
S3040 would also allow individuals with prior drug convictions to receive licensing. However, individuals with previous business-related convictions like tax evasion or fraud will be barred from licensing.
If passed, S3040 would include the Community Grants Reinvestment Fund. This Grant invests in marginalized communities by offering various job trainings, developments programs, and economic empowerment opportunities to citizens of New York. The fund would allow potential business owners and professionals to cash in on the new opportunities the recreational market would allow.
While cannabis reform still has a large resistance in New York, perspectives are shifting towards decriminalization and legalization. Medical cannabis for instance is currently legal in New York. The Compassionate Care act allows patients to be treated with non-smokable versions of cannabis. Additionally, New York governor, Andrew Cuomo wrote in his legislative agenda for 2017 that “data consistently show that recreational users of marijuana pose little to no threat to public safety.” 24/7 Wall Street listed New York as having a high likelihood of legalizing cannabis and as one of their top ten states to legalize recreational marijuana.
New York is our home and the home to many great start ups and cannabis companies. New York has already proven itself as a cannabis startup hotspot with companies like LeafLink and Palliatech. There is a high eventual probability of total legalization, and one major opportunity in front of us. The business implications are heavy with a possibility to cash in by a proposed 20 Billion dollar legal cannabis industry by 2020. A huge portion of that will be in New York and only time will tell who will capitalize on this opportunity with the most success.