Growers, Retailers Walk the Tightrope of New York Cannabis Rules

Profitable enterprises take time to build – but it continues to run thin in one of the industry’s most promising cannabis markets.

That sentiment underscored many of the conversations that took place at Green Market Report’s first New York Summit on Sept. 13 in the heart of the Big Apple. Operators and investors large and small traded advice and stories of power, money, and property within the context of a market brimming with opportunity, but one that is also showing signs of implosion.

One such contributor to that thread was Assemblywoman Donna Lupardo, who chairs the Assembly Committee on Agriculture and has been deeply entrenched in the daily minutia of the state cannabis industry’s decision making.

Lupardo said that her primary focus is making sure farmers in the state “don’t get run over by large corporations” – whether it’s lobbying for more allowed canopy space or more specific rescue efforts.

The farmers she referenced later echoed the sentiment.

Still, one of those farmers, founder and CEO of Back Home Farm William Leibee, believes competition is healthier than assumed, adding that the registered organizations – the 11 companies approved to operate as medical providers, most of which are large multistate operators – lack “story and depth.”

“I have what I have to offer, they have what they have to offer. We’ll find each other’s clients accordingly,” he said. “And, you know, I hope we can all rise together with our work.”

However, the way the regulations are written, there’s conflict between the two. Currently adult-use cannabis farmers are restricted to only 20 artificial grow lights and an outdoor canopy of up to 43,560 square feet outdoors or 25,000 square feet in a greenhouse.

Brittany Carbone, the co-founder of Tricolla Farms, noted that growers should have the choice to grow their plants either indoors or outdoors based on their resources, expertise, and market demands.

Restricting farmers to outdoor grows limits them to one season, she said. And that season might not line up with when you’re restricted to growing plants outdoors. That makes it hard to adapt to market needs.

On the other hand, growing indoors gives offers a lot more flexibility.

“It’s not all about eliminating all competition with the R.O.s,” Carbone said. “It’s just they’re coming in on completely different terms that we are.”

Not only that, but the conditionally licensed farmers and retailers both face the existential threat of a landscape littered with illicit shops and delivery services, as well as far-reaching “burner distros” coming from the West.

Arana Hankin-Biggers, president of Union Square Travel Agency, mentioned how legal operators put up personal guarantees and at least a year of rent in cash.

The panel of retailers agreed that being creative and pushing the limits a bit, even to the chagrin of regulators at times, is necessary. Eating credit card fees has been one way her business has tried to sweeten the pot for customers.

“I mean, this has been probably one of the most intricate, difficult frustrating businesses that I’ve ever entered in my entire life because of the frustration and basically the quasi-incompetence from New York state which is really unfortunate,” Gotham founder Joanne Wilson said.

“And you know, you bring up real estate … they seem to be having no problem giving leases to over 3,000 Illegal stores in the city. So, I’m not exactly sure what the difference is.”

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