By now, we all know New York is buzzing with opportunities in the cannabis business. But do New Yorkers know how to enter the space successfully? That’s what the National Cannabis Industry Association (NCIA) and Canna Advisors, the country’s leading business consultancy, teamed up to address. This week, NCIA organized three New York “Insights and Influencers Tours” to bring industry experience directly to those seeking more education about getting into the sector. With programs in Rochester, Albany, and New York City, attendees got access to some of the best wisdom out there.
Honeysuckle was proud to be the exclusive media partner for the New York City "Insights and Influencers Tour" and was there on the scene at the Ace Hotel. The upcoming Best of 420 CLIO Awards, a special collaboration between the NCIA and the CLIO Awards focusing on the cannabis industry, will be happening in Las Vegas later this year and will also feature Honeysuckle as its media partner. Watch our exclusive interview with Michael Kauffman, Executive Director of CLIO Music and CLIO Cannabis, and Brian Gilbert, NCIA's Events Manager, at the NCIA "Insight and Influencer Tour" in NYC, with highlights from the event below!
Insights and Influencers: NCIA and Canna Advisors Come to New York City
At the Ace Hotel in Brooklyn, the NCIA and Canna Advisors welcomed an illustrious crowd. Some were new entrants to the cannabis market, while others were mainstays of the industry, such as Jennifer Modica of Organic Jade Growers and Richard Guerra, Director of Global Reach at Sensi Media Group.
Trivette Knowles, Press Officer and Manager of Community Outreach for New York’s Office of Cannabis Management (OCM), was on hand at the event to answer questions from a governmental point of view. Knowles was thrilled to see the diversity of the audience at the “Insights and Influencers Tour.”
“We need more events like this to show people that cannabis touches all walks of life,” he said. “It’s part of the culture.”
Who’s Writing the Rules? NCIA, Canna Advisors and The Safe Banking Act
As the evening got underway, NCIA’s CEO Aaron Smith took to the stage with an introduction where he enthused about the evolution of the cannabis industry. “Put progress into perspective,” he encouraged everyone. “The movement we’ve seen on these issues in the past decade is monumental.” Noting that 38 states now have some form of legal cannabis, federal legalization is “inevitable… But who do you want writing the rules?”
That question seemed to be answered by the event’s main presenters from Canna Advisors: Bob Wagener, Vice President of Real Estate Development; Sumer Thomas, Director of Regulatory Operations; and Vincent DiMichele, Regulatory Content Manager, as well as attorney Michael Schwamm, Partner in the Cannabis Practice at Duane Morris. They all agreed with Smith that federal legalization is a very real possibility, and urged those in attendance to engage with government on every level, from public comment on state regulations to contacting Senators Chuck Schumer and Kirsten Gillibrand to support the SAFE Banking Act.
Currently under consideration for passage in the Senate, the SAFE Banking Act will allow federally-regulated banking institutions to do business with cannabis companies and entrepreneurs, which means a more stable system of tracking payments, access to loans, and many other tools to help industry participants. Thomas and DiMichele also discussed Section 280E of the federal tax code, which prohibits cannabis businesses from writing off any standard business expenses on their taxes. The SAFE Banking Act may help to relieve cannabis companies from this prohibition on a national scale if it passes. New York, however, has already incorporated language into its Fiscal Year 2023 budget which “decouples” the state from 280E’s tax restrictions. As announced by OCM Executive Director Chris Alexander this April, when New York’s cannabis industry is fully operational by 2023, the businesses won’t be prohibited from deducting standard expenses on their taxes, a move which will improve their growth and the state’s cannabis revenue.
Licenses and Legacy: New York’s Unique Cannabis Industry
Bob Wagener observed that New York is taking an unprecedented approach to growing its cannabis industry: “Many states legalize because it’s politically popular, then they slowly get a regulation program up and running. New York is totally different. They’re… thinking about this from different angles. In order to get product to the market quickly, they’re giving conditional licenses. Simultaneously, they’re getting the regulations in place to do regular licenses at the end of this year [and] doing public education at the same time. Also, they know it’s based in legacy; they’re trying to bring in the legacy market.”
On the topic of legacy applicants for licenses, Wagener estimated that the numbers of legacy entrepreneurs versus new entrants reaching out to Canna Advisors were evenly split, at least in terms of asking questions. While he couldn’t pinpoint an exact ratio, he mentioned that legacy operators seeking licenses in the regulated market need some help changing perspectives. “One of the challenges for the legacy market is they’ve spent their career trying to find ways around the law, and that’s built into your mindset. With the legal market, you’ve got to change that mindset and find ways to work within the law… People have to welcome the legacy operators, and they bring a ton of knowledge – how to grow, how to produce, what the market wants, and we want that knowledge in the legal market.”
Start Early, Build Community: Tips For Cannabis License Applicants
Thomas emphasized that any license applicant, regardless of legacy or social equity status, start the process early. “We don’t always know how many licenses the regulators will approve within an application period,” she commented. “If you’re applying in a certain category and you wait until they open applications for your category, you may find there are all these things you need to change about the business structure to fit the license, and then you’ve only left yourself a few weeks to do that. Read the regulations, start the work early, and start looking at what you might need to adjust now.”
One of the strongest pieces of advice the speakers could give was that aspiring licensees should build their community engagement. DiMichele observed that each state with social equity programs has a different plan to measure how cannabis companies can reinvest in their local communities. California and Michigan offer business grants, New Jersey has impact zones, New York has created an ambitious government fund, and so on. But the states want cannabis brands themselves to demonstrate what they can do for community enrichment. According to DiMichele, cannabis companies should seek out partnerships with local organizations, provide education about the plant, promote charitable organizations – something that proves the cannabis industry is a powerful contributor to a state’s economic and societal growth.
Of course, Thomas added, this aspect of the application process should be organic to the business itself. Don’t choose charitable organizations as partners because they look good on paper, but because they align with your values and are authentic to the mission of your company.
Real Estate and Staffing Needs In The Cannabis Industry
Wagener also identified real estate sourcing as another key need for cannabis businesses. “The state formed the [social equity] fund so they could help [companies get access to properties] quicker. But when it comes to regular licenses… that’s a challenge, because they’ll have to go through the zoning and meet those zoning requirements.” He noted that staffing would be a similar need: “There are likely 60,000 people [who will be newly employed] in cannabis this year. Some of those people got displaced in the pandemic from some sort of service industry. That’s perfect for working in retail. Cultivation operations can be labor-intensive; they’ll need substantial staffs. So I think New York is going to do very well to have those jobs in cannabis available.”
“Read And Comment”: NCIA, Canna Advisors, And The Importance of Advocacy
Finally, the Canna Advisors team stressed once again the importance of advocacy. “The fact that we’re advocates and also operators puts us in a unique position,” Wagener asserted. He garnered applause from the whole room by reminding everyone that the cannabis industry can’t be truly successful while people remain imprisoned and communities harmed due to criminalization and prohibition. Those within the industry have a responsibility to know the laws and have a hand in working to change them as well.
For example, New York’s proposed regulations on essential business operations for the cannabis industry were released by the OCM at the beginning of June. These include guidelines for packaging, marketing, advertising, and laboratory testing. However, many have identified several of the regulations – particularly for marketing, packaging and advertising – as almost prohibitively stringent.
“I think New York listens,” Wagener said of the OCM’s proposals. “They’re taking that public comment period to get that feedback, so I highly encourage people to read and comment. That’s what it’ll take to get businesses [to success]. If you’re looking to get into the industry, read and comment.”
What’s Next For The NCIA and Canna Advisors?
With the evening winding from remarks to a spirited round of networking, the NCIA and Canna Advisors teams gathered to thank the assembled crowd for their dedication to gaining industry knowledge. It takes continued collective efforts to bring cannabis from underground markets into legitimate spaces, which both the event’s organizers have been doing for years. As the speakers noted, Canna Advisors is going into its tenth year of operations and has a long history of working across 36 states. From financial modeling and consultancy on getting capital, to establishing business structure and recruiting talent across all employment levels, Canna Advisors proves time and again why they are the top resource for the cannabis industry.
“We’ve seen what states do right and what they do wrong,” Wagener concluded. “We’ve seen what businesses do right and what businesses do wrong. We have an office now in New York – I’m from here and have worked here for years – so we have the New York experience and we bring with it an entire country experience… I think that will allow us to help clients achieve success.”
Based on the magical energy radiating from the audience in the Ace Hotel, Wagener seems to be entirely right. That very combination of excitement and insight is what empowers the cannabis industry to thrive and evolve with each new development. Whatever happens next, we’re fortunate to have these good stewards guiding the way.
For more about the NCIA, visit thecannabisindustry.org. To learn more about Canna Advisors, visit thinkcanna.com. For more about Duane Morris, visit duanemorris.com.
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Featured image: The NCIA and Canna Advisors teams at the Insights and Influencers Tour in NYC (C) Sam C. Long / Honeysuckle Media, Inc.
