When New York State passed legislation this spring to legalize adult-use cannabis, it created an unrivaled and unprecedented billion-dollar opportunity for local entrepreneurs. The legal weed industry, along with medical marijuana and hemp, is getting ready to bloom right before our eyes. Everyone wants to know what the rules are, and how they can not only play by them, but win.
“We don’t have our regulations yet. At this point, all we have to go by is the bill,” says Kristin Jordan, founder of Park Jordan, a commercial real estate brokerage and advisory firm serving the cannabis industry. At a virtual NY Cannabis Insider Conference on October 28, Jordan spoke specifically about the retail and real estate part of the cannabis-business equation, and the state’s licensing options.
“What we’re advising our clients to do in advance of regulations is to really understand who their stakeholders are in the communities in which they would like to be sited,” Jordan added, “so I’m seeing a lot of clients source and seek out conditions that make sense for them.”
One of the biggest barriers of entry into New York’s cannabis industry will be obtaining an adult-use business license – there are 10 different licenses available.
- Cultivator: growing, cloning, harvesting, drying, curing, grading, trimming
- Nursery: producesonly clones, immature plants, seeds, and other agricultural products
- Processor: extracts concentrated cannabis and or compounds, or manufactures concentrated cannabis or cannabis products
- Distributor: wholesale sale to dispensary, on-site consumption, or delivery service
- Retailer-dispensary: sells cannabis products directly to consumers
- Delivery: delivers cannabis products to consumers
- On-site consumption: sells directly to consumers for use on-site at the location
- Adult-use cooperative: democratically controlled, can cultivate, process, distribute – can’t sell directly to consumer
- Micro-business model: may be a cultivator, a processor, a distributor, and a retailer of their own cannabis products. By law, no person can own more than one micro-business license, nor can they own an interest in any other adult-use license type, to prevent the creation of a cannabis-centric monopoly.
- Registered Organization Adult-use Cultivator Processor Distributor Retail Dispensary
What’s more, each business that applies for a license will be subject to the following criteria.
- Whether or not they’re eligible to be classified as a social and economic equity applicant
- How their business plan would maintain effective control against the illegal diversion or inversion of cannabis
- How they plan to comply with all applicable state laws and regulations
- Showing a capacity to be ready, willing, and able to properly carry on the activities
- Possesses or has the right to use sufficient land, buildings, and equipment
- Whether or not they qualify as a social and economic equity applicant or set out a plan for benefiting communities and people disproportionately impacted by enforcement of cannabis laws
“Real estate is really such an important part and piece of the cannabis industry,” she said. “It’s something I feel is still being overlooked, mainly because we’re still a federally prohibited industry, and many of the big real estate firms are not able to assist in this area.”
Right now, Jordan is telling her clients to hold off on buying or renting property for their cannabis business since the formal regulations have yet to be set in stone. For the time being, potential business owners should simply be laying a strong foundation of information about the next steps so that they’re ready when the time comes to take them, she says. Focus on site selection recon, social equity partnerships, municipal relationships, environmental stewardship, New York bona fides, application process management and drafting, and thinking about which license to pursue, Jordan advised.
“Attending planning board meetings in your municipality, and understanding who your stakeholders are in the community will be really beneficial when your process begins,” she noted. “Those entities will be really important in making sure accessibility to your operation, and your licensing application, will be approved.”