California may be one of the world’s largest cannabis markets, but opportunities abound in the Northeast, especially now that New Jersey and New York have legalized adult use, according to Jay Czarkowski, co-founder and licensing expert at the cannabis business consultancy. Kana Consultants.
The Canna Advisors team, which recently opened an office in the Empire State Building, expects New York to release draft regulations on commercial licensing of adult cannabis use by the end of March.
“I’ve heard over a period of time, from multiple sources, that there may be somewhere around 750 commercial licenses that are going to be issued by the state, which is a good number,” Czarkovsky says. “It’s by no means a lot. I think there could be more for sure, but it’s quite a number of licenses.”
In any case, limiting the number of licenses issued means that it will be a competitive licensing process in the Empire State, and Czarkovsky says there are ways for entrepreneurs to increase their chances of obtaining a license, even before regulations are finalized.
Here’s what he says potential applicants must do now to move forward with the competition.
1. Commercial real estate insurance.
Whether it is a growth operation, processing facility, or dispensary, a cannabis business cannot start operations without a physical location.
“And that property can’t be your garage or basement in the house you’re renting,” Zharkovsky says. “It has to be commercial property, and you also need local support.”
Czarkowski recommends identifying properties in a cannabis-friendly city, town or county that will not only give the local company approval to operate, but will also work with cannabis business owners on building permits and zoning issues.
2. Find a supportive municipality and start building community relationships.
Czarkowski says the importance of being in a supportive community — and building relationships within that community — cannot be overstated.
“You need to go down to City Hall, talk to local officials, and find out their concerns [and] Find out if the city will allow these businesses, he says. “It’s a great step anyone can take now.”
Approximately 30% of New York City Councils She chooses not to subscribe to hosting adult clinics before the December 31, 2021 deadline to do so, with most of those municipalities being smaller towns and villages in the state. Czarkowski finds this encouraging.
“I don’t see it slowing down the industry a bit there,” he says, adding that many municipalities that initially chose not to sell cannabis may reconsider that decision later.
“The truth is that people in those towns will go to the next town [to buy cannabis]and then these municipalities will lose tax revenue,” says Zharkovsky. Over time, many of these municipalities have banned it. [will] Come on, and at some point, they’ll let the companies go.”
3. Watch the regulations unfold.
While the rules governing commercial licensing of cannabis use for adults have yet to be formulated, Governor Kathy Hochhol recently Website Legislation To allow cannabis companies to apply for a new license for conditional adult use cannabis farms to grow adult-use cannabis during the 2022 growing season.
“I think it’s great that the state is looking to issue these temporary licenses sooner rather than later to cannabis growers,” Zharkovsky says. “I’m sure these cannabis growers are already thinking, ‘What should I do not just to grow some produce, but to get the product off the shelves?'”
When the draft rules for New York’s adult cannabis program are materialized, Czarkovsky says they will likely address testing, pesticide and fungicide use, contaminants, packaging, and distribution. Cannabis growers looking to obtain conditional cultivation licenses, as well as those waiting to apply for more conventional commercial licenses for adult use, should consider these issues and consider not only what they need to grow hemp, but also best practices to ensure the product passes the test. It reached the shelves of dispensaries.
Czarkovsky says that aspiring cannabis operators in New York should pay close attention to the state’s rules on social justice.
“The social justice program that the state is working on at the moment is fascinating to me in many ways,” he says. “They may have learned from other states that you can try to issue licenses to qualified social justice applicants all day long, but these groups need capital in order to get the business up and running.”
Last month, Hochul announce During her State of the State address, she said New York will create a $200 million fund to support social justice work in cannabis. Hochul’s office has proposed a funding mechanism based in part on cannabis licensing fees and taxes.
“$50 million of that amount is supposed to come from soon-to-be application fees and tax revenue,” Czarkovsky says. An additional $150 million is supposed to come from private investors. The devil is in the details, so we’ll have to see how he turns this around. Who are these private investors? Will they give the state money? I’m not sure what that would look like. …But New York seems to take very seriously the need for capital for these groups, so I think that alone will distinguish New York’s Social Justice Program from all previous programs.”
4. Team building and action plan.
Czarkowski says one way to move forward in the competitive licensing process is to build a strong team that has the ability to execute once the license is obtained.
“If someone in New York wants to get a planting license, it’s best to have someone on their team who knows how to grow healthy plants,” he says. He adds that the same applies to those seeking processing, manufacturing and retail licenses; An expert in these areas should be appointed prior to the application process to ensure the best chances of success.
“We are also working with people to develop a financial model,” Zharkovsky says. “These are the tools they can take to their friends and family or investors to start putting together their own war fund to build a business.”