ON THIS MONTH'S EDITION OF CONNECT NEW YORK, WE'RE CHECKING IN ON THE STATE'S DEVELOPMENT OF A RECREATIONAL MARIJUANA MARKET, AND GETTING A STATUS UPDATE ON THE GOOD, THE BAD, AND THE UNKNOWN.

ALL THAT, COMING UP NEXT ON CONNECT NEW YORK.

♪ ♪ ♪ ♪ WELCOME TO CONNECT-NEW YORK, I'M DAVID LOMBARDO - HOST OF WCNY'S THE CAPITOL PRESSROOM, A DAILY PUBLIC RADIO SHOW, BROADCASTING FROM THE STATE CAPITOL.

ON THIS MONTH'S EPISODE WE'RE DISCUSSING THE RAMIFICATIONS OF THE 2021 DECISION BY STATE POLICYMAKERS TO LEGALIZE ADULT-USE MARIJUANA AND PAVE THE WAY FOR THE CREATION OF A RECREATIONAL MARKETPLACE.

IT'S BEEN NEARLY FOUR YEARS SINCE LEGALIZATION WAS APPROVED BY STATE POLICYMAKERS, AND THE ENSUING PERIOD HAS BEEN RIFE WITH HIGH-PROFILE FAILURES AND SUCCESSES, AND THE LANDSCAPE APPEARS TO BE TRANSITIONING INTO A NEW STAGE.

LATER IN THE PROGRAM, WE'LL HEAR FROM SOME FIRST-HAND TESTIMONIALS ABOUT WORKING IN THE MARIJUANA INDUSTRY IN NEW YORK, BUT FIRST WE'RE GOING TO HEAR FROM OUR PANEL OF EXPERTS, INCLUDING JOHN KAGIA, DIRECTOR OF POLICY FOR THE STATE OFFICE OF CANNABIS MANAGEMENT, KATIE NEER, FROM THE GOVERNMENT AFFAIRS FIRM DICKINSON AND AVELLA, AND JOE ROSSI, FOUNDER OF THE CONSULTING FIRM MODERN ADVOCACY.

SO JOHN, WE ARE GOING START WITH YOU.

USING THE METAPHOR OF YOUR CHOICE, HOW WOULD YOU DESCRIBE THE CURRENT STATE OF THE MARIJUANA MARKETPLACE IN NEW YORK RIGHT NOW REALLY FROM SEED TO SALE?

>> I WOULD DESCRIBE IT WITH COOKING WITH GAS.

THE MARKET IS ON FIRE RIGHT NOW.

WE HAVE ISSUED OVER 1500 LICENSES ACROSS THE ENTIRE SUPPLY CHAIN FROM CULTIVATORS GROWING THE PRODUCT, MANUFACTURERS PRODUCING EVERYTHING FROM INFUSED BEVERAGES TO INFUSED CHOCOLATES AND OTHER EDIBLES.

WE ARE LICENSING DISTRIBUTORS WHO ARE TRANSPORTING THE PRODUCT ACROSS THE STATE.

AND WE HAVE 300 RETAILERS WHO ARE HAVE OPENED THEIR STORES AND SELLING CANNABIS TO ADULTS IN NEW YORK RIGHT NOW.

WE HAVE BUILT A PHENOMENAL SUPPLY CHAIN IN NEW YORK AND THE MARKET IS GROWING INCREDIBLY FAST.

INDEED AT THE END OF 2024, WE CLOCKED THE FIRST BILLION DOLLARS IN SALES SINCE THIS MARKET LAUNCHED AND WE BELIEVE THIS IS THE FIRST OF MANY.

SO VERY, VERY BRIGHT MOMENT FOR THIS INDUSTRY RIGHT NOW.

STILL A LOT OF WORK TO DO BUT WE ARE VERY BULLISH ABOUT THE OUTLOOK FOR ISRAEL REGULATED CANNABIS IN NEW YORK.

>> WE'LL UNPACK SOME OF THE SPECIFIC AREAS BUT I WANT TO FOLLOW UP ON THE BROAD PICTURE AGAIN.

HOW DOES IT LOOK COMPARED TO A YEAR AGO?

I'M THINKING ABOUT LAST SPRING AND THE CONVERSATIONS ABOUT ENFORCEMENT OF THE ILLEGAL MARKET, GOVERNOR HOCHUL WAS DIRECTING THE OFFICE OF GENERAL SERVICES TO TAKE A LOOK AT THE OPERATIONS OF THE OFFICE OF CANNABIS MANAGEMENT.

SO DOES THE PICTURE LOOK TO YOU DISTINCTLY DIFFERENT THAN SAY A YEAR AGO?

>> I THINK THE PICTURE LOOKS DRAMATICALLY DIFFERENT THAN IT DID A YEAR AGO.

SO LOOK AT IT THIS WAY.

WE CLOSED 2023 WITH ONLY ABOUT 25 STORES OPEN.

WE CLOSED 2024 WITH NEARLY 300 STORES OPEN.

BY MAY OF 2024, WE HAD SEEN THIS MASSIVE PROLIFERATION OF UNLICENSED STORES ACROSS THE STATE, BASED ON POWER GIVEN BY THE LEGISLATURE AND THE GOVERNOR'S OFFICE TO THE OFFICE OF CANNABIS MANAGEMENT IN COLLABORATION WITH STATE PARTNERS AT THE STATE AND CITY LEVEL, WE HAVE BEEN ABLE TO PADLOCK OVER 1500 UNLICENSED DISPENSARIES ACROSS THE STATE.

WE HAVE RECRUITED NEARLY 60 PERSONNEL SINCE THE BEGINNING OF LAST YEAR.

AND SO BOTH INTERNALLY WITHIN OUR OPERATIONS AN EXTERNALLY IN TERMS OF MARKET IMPACT, WE ARE IN A FOUNDATIONALLY DIFFERENT POSITION THAN WE WERE THIS TIME LAST YEAR.

>> WELL, JOE, YOU HAVE NEVER SHIED AWAY FROM OFFERING A FRANK OBSERVATION ABOUT THE MARIJUANA MARKETPLACE IN NEW YORK.

HOW DOES JOHN'S PICTURE OF THE INDUSTRY COMPARE TO WHAT YOU ARE SEEING?

>> I COULDN'T AGREE MORE THAN WHAT JOHN IS SAYING.

A YEAR AGO, I WAS A WHISTLEBLOWER, I WAS POINTING OUT PROBLEMS THAT WERE IN THIS THAT PEOPLE WERE AFRAID TO SPEAK UP ON.

I WAS ON YOUR SHOW.

YOU WERE LIKE ARE YOU SURE YOU WANT TO DO THIS.

I'M POSITIVE BECAUSE THERE IS PROTECTION FOR WHISTLEBLOWERS FRANKLY, BUT I WAS CALLING BALLS AND STRIKES.

A LOT OF PEOPLE WERE HARMED EARLY ON.

THANKFULLY THERE WAS THE TRANSITION.

THANKFULLY THE GOVERNOR DID WHAT SHE DID.

THANKFULLY JEANNETTE MOY DID A FANTASTIC REPORT AND THERE WAS CHANGE AND JOHN AND PEOPLE LIKE JOHN STAYED AND OTHERS.

I WON'T BOTHER MENTIONING THEM ALL BUT THEY KNOW WHO THEY ARE, BECAUSE THEM STAYING BRIDGED A CATASTROPHE.

AND THE OTHER SIDE OF THE BRIDGE IS A BILLION DOLLARS IN SALES WITH 300 STORES.

THERE ARE 20 MILLION NEW YORKERS IN NEW YORK STATE.

JUST 300 STORES?

THERE ARE GOING TO BE A THOUSAND STORES AT SOME POINT.

MAYBE MORE.

SO THANK YOU.

THANK YOU FOR THE HARD WORK YOU DID LAST YEAR.

IT HAD TO BE TOUGH.

>> KATIE, DOES THE PICTURE PAINTED HERE LOOK LIKE WHAT YOU ARE SEEING HERE AS WELL?

>> I WOULD AGREE.

I THINK I WORK WITH CLIENTS IN THE CANNABIS BASE OF ALL SHAPES AND SIZES, SORT OF ACROSS THE SUPPLY CHAIN, SOME CULTIVATORS, PROCESSORS, DISTRIBUTORS.

LOTS OF RETAILERS AND OF COURSE THE MEDICAL OPERATORS IN THE STATE AS WELL.

SO I FEEL LIKE I'VE GOT A GOOD 360-DEGREE VIEW ON THE OTHER SIDE OF THE TABLE FROM JOHN AND THE REGULATORS.

I AGREE.

I THINK LICENSING HAS PICKED UP.

I THINK PEOPLE'S DOORS ARE OPENING.

I THINK TONS OF NEW PRODUCTS ARE BEING INTRODUCED, REGULATED, PRODUCTS BEING INTRODUCED TO THESE DISPENSARIES.

THINK CONSUMERS, MOST IMPORTANTLY, ARE STARTING TO UNDERSTAND WHAT LEGAL CANNABIS LOOKS LIKE, WHAT IT IS LIKE TO CONSUME, RIGHT, HOW TO LOOK AT THE LABEL AND UNDERSTAND THE LABEL.

WE ARE SEEING SOME BRAND LOYALTY BUILD HERE IN NEW YORK.

ALL OF WHICH IS SUPER EXCITING.

A VERY BUMPY START AND ROLLOUT EVERYONE CAN OBJECTIVELY AGREE ON THAT I'M EXCITED AND MY CLIENTS ARE EXCITED.

WE ARE EXCITED FOR WHAT IS TO COME.

>> ARE WE DISMON.

>> THAT'S THE BIG PICTURE.

LET'S TAKE A BREAK FROM OUR DISCUSSION AND BRING YOU THE STORY OF A MARIJUANA DISPENSARY OWNER HERE IN SYRACUSE AND HERE IS A PACKAGE FROM OUR CONNECT NEW YORK PRODUCER ALEK MBRUSO.

>> I GREW UP IN A TOWN NOT TOO FAR FROM SYRACUSE, ONEONTA, COMMONLY REFERRED TO AS STONE-ONTA BECAUSE OF THE PREVALENCE OF MARIJUANA.

I GOT INTO MARIJUANA PROBABLY EARLY HIGH SCHOOL, MAYBE EIGHTH OR NINTH GRADE.

AS SOON AS I STARTED SMOKING AND ENJOYING MARIJUANA, I ALSO PRETTY SHORTLY STARTED SELLING IT.

AND THAT CONTINUED THROUGH HIGH SCHOOL INTO COLLEGE A LITTLE BIT.

AND I DID PRETTY WELL AT IT.

EVENTUALLY I WAS ABLE TO GET PROBATION BUT FIRST I HAD A BUT BEFORE MY PARENTS WERE ABLE TO PUT TOGETHER SOME MONEY FOR A LAWYER, I HAD A PUBLIC DEFENDER.

AND THE FIRST DAY I WENT TO COURT, THE MORNING AFTER I WAS ARRESTED, HE NEVER ASKED ME ANYTHING ABOUT WHAT HAPPENED.

THERE WAS SOME STUFF FOUND IN MY CAR.

THERE WAS ANOTHER PERSON IN THE CAR.

HE NEVER THOUGHT ABOUT WELL MAYBE WE COULD DEFEND THIS.

MAYBE WE COULD CAST REASONABLE DOUBT.

INSTEAD HE SAID WE MIGHT BE ABLE TO GET SIX MONTHS IN JAIL.

AND FROM THAT MOMENT ON, I HATED PUBLIC DEFENDERS AND I ALSO FELT THAT THERE HAS GOT TO BE A CHANGE IN THE WAY THAT THE CRIMINAL SYSTEM TREATS PEOPLE ACCUSED OF POSSESSING MARIJUANA.

IT GOT ME OBSESSED WITH JUSTICE AND TRYING TO HELP OTHER PEOPLE AND PREVENT THEM FROM FOLLOWING IN THE FOOT FOOTSTEPS OF ENDING UP IN PRISON.

GOT MY G.E.D., COLLEGE AND LAW SCHOOL WITH THE SOLE PURPOSE OF BEING A DEFENSE ATTORNEY.

I HAVE DONE THAT FOR THE PAST 12 OR SO YEARS.

IT WHAT BE GREAT.

I REALLY FELT LIKE I HAVE HAD AN IMPACT ON A LOT OF PEOPLE'S LIVES.

I'VE ENJOYED IT BUT NOW WHEN THIS OPPORTUNITY CAME UP IN NEW YORK STATE, I FELT LIKE IT WAS MY CALLING.

I JUST REMEMBER WHEN I FOUND OUT THAT I WAS APPROVED FOR A LICENSE, I WAS ELATED.

I WAS SO EXCITED.

IT FELT LIKE A DREAM.

BUT THE PROCESS ITSELF WASN'T REALLY EASY.

I MEAN I APPLIED-- I DID IT ON MY OWN.

I PUT TOGETHER ALL THE STUFF YOU HAVE TO PUT TOGETHER AND IT'S A LOT.

SO HAVE YOU TO DO A FIRST SORT OF APPLICATION, GET PROVISIONALLY APPROVED.

SO IT TOOK SEVERAL MONTHS BEFORE I GOT APPROVAL.

AND THEN FROM THERE, THERE WAS ANOTHER SET OF SET OF APPLICATION PROCESS YOU HAD TO GET APPROVAL BEFORE YOU COULD OPEN THE DOORS.

IT WAS SO ONEROUS THAT EVEN THOUGH I'M A LAWYER, I HAD TO HIRE A LAWYER TO HELP ME THROUGH THE LEGAL PROCESS.

FOR PEOPLE THAT HAVE THE CONDITIONAL LICENSE, THE CAURD PROGRAM, THERE WAS AN OPTION TO FINANCE THROUGH THE STATE.

THE STATE WOULD PROVIDE THESE SORT OF BUILDOUT FUNDS AND THEN YOU PAY IT BACK OVER TIME.

SO I OPTED TO DO THAT.

SO I LOVE THE FACT THAT THEY HAD DONE THIS CAURD PROGRAM, OPENED IT UP TO PEOPLE LIKE ME WHO HAD BEEN UNFAIRLY CRIMINALIZED.

I HAVE A CRIMINAL RECORD TO THIS DAY AND THAT'S NOT FAIR.

I LIKE THE FACT THAT NEW YORK STATE IS TRYING TO MAKE THINGS RIGHT.

>> NEW YORK STATE IS TOUGH IN THE CANNABIS INDUSTRY.

WE HAVE A HIGHER TAX THAN EVERYBODY ELSE.

SO YOU GET THAT LITTLE BIT OF STICKER SHOCK BUT WHEN YOU GO TO PAY AND YOU GET THAT 13% TAX, BUT ALSO, YOU KNOW, I THINK IT'S GOING TO EASE BACK A LITTLE BIT THE MORE PEOPLE PUSH THE ENVELOPE.

BUT DEFINITELY THE ADVERTISING ANGLE NEEDS TO CHANGE.

WE HAVE TRIED TO GET BILLBOARDS AND YOU CAN'T BE ANYWHERE NEAR A CHURCH OR A SCHOOL.

AND THAT'S A THOUSAND FOOT RULE.

NOW YOU HAVE TO BE CAREFUL WITH THE COLORS THAT YOU USE.

YOU CAN'T HAVE CARICATURES, ANYTHING THAT'S APPEALING TO KIDS, YOU KNOW, REALLY.

IT HAS TO BE MORE INFORMATIVE THAN ANYTHING ELSE.

IT HAS TO BE VERY PLAIN.

OUR FRONT ENTRANCE AND THE ROAD SIGNAGE, IT'S JUST JOE'S BUDS.

>> THE BANKING HAS BEEN TOUGH BECAUSE NOT A LOT OF BANKS ARE WILLING TO WORK WITH CANNABIS DISPENSARIES OR OTHER PEOPLE IN THE CANNABIS WORLD AND I THINK AS LONG AS MARIJUANA REMAINS FEDERALLY ILLEGAL, THAT'S GOING TO BE A PROBLEM.

SO A LOT OF THE SMALLER LOCAL OR REGIONAL BANKS HAVE BEEN THE ONES TO STEP UP.

EVEN WITH THAT, THERE IS EXTRA REGULATIONS.

IT'S NOT JUST LIKE OPENING UP AN ACCOUNT LIKE WOULD YOU FOR A NORMAL BUSINESS.

IT'S, YOU KNOW, SEVERAL OTHER FORMS AND DOCUMENTS AND THINGS YOU HAVE TO DO NOT ONLY AT THE BEGINNING BUT THERE IS COMPLIANCE REQUIREMENTS AS YOU GO.

THERE IS ALSO ADDITIONAL FEES THAT A LOT OF THE BANKS CHARGE LIKE MONTHLY FEES BECAUSE THEY SAY THAT THIS IS SORT OF A RISKY BUSINESS OR A BUSY ENDEAVOR FOR THEM.

AS TIME GOES BY, I'M HOPING THAT NEW YORK STATE HAS A MORE STREAMLINE WAY TO ACCOMMODATE PEOPLE WHO ARE IN MY POSITION AND PEOPLE WHO WANT TO GET THEIR LICENSES GOING FORWARD.

>> SO JOHN, WHAT WE HAD THERE IS A STORY FROM THAT FIRST WAVE OF DISPENSARY LICENSEES AND THOSE ARE THE PEOPLE WHO HAD TO HAVE SOME SORT OF EXPERIENCE IN BUSINESS AS WELL AS SOME SORT OF CONNECTION TO A MARIJUANA ARREST EITHER THEM OR A CLOSE FAMILY MEMBER.

OBVIOUSLY WHAT WE HEARD THERE WAS A SUCCESS STORY.

AND THERE ARE PEOPLE THOUGH WHO HAVE GONE THROUGH THE FIRST PROCESS AND HAVE HAD A MORE CHALLENGING TIME.

WHAT IS YOUR DISPENSARY OF THE PEOPLE OF THE FIRST WAVE WHO ARE STILL STRUGGLING WHO ARE NOT AT JOE'S BUDS YET.

DO YOU HAVE A SENSE OF THAT?

>> PART OF THE REASON WE HAVE BEEN-- THE CANNABIS BUSINESS IS -- PART OF THE REASON WE HAVE BN SO FOCUSED ON THE INCUBATION IS BECAUSE THE CANNABIS BUSINESS IS A VERY DIFFICULT BUSINESS TO OPERATE IN.

THE THAT IS TRUE GLOBALLY AND NATIONALLY.

THERE ARE VERY COMPLEX REGULATIONS THAT HAVE YOU TO ADHERE TO.

THIS IS ONE OF THE MOST REGULATED CONSUMER SECTORS OF OUR ECONOMY AND EACH STATE HAS ITS OWN MANDATE.

SO WE REALLY WANT TO MAKE SURE THAT THE LICENSEES THAT ARE GOING TO BE SETTING UP SHOP IN NEW YORK HAVE ALL OF THE TOOLS, RESOURCES THAT THEY NEED IN ORDER TO BE SUCCESSFUL IN THIS MARKET.

AND SO WE APPRECIATE THAT THERE ARE LICENSEES WHO HAVE FACED MORE CHALLENGING PART OF OPERATIONALIZING THEIR BUSINESS AND BEING SUCCESSFUL IN THEIR COMMUNITIES AND THAT'S WHY THE OFFICE HAS BUILT A VERY LARGE PORTFOLIO OF EDUCATIONAL AND TRAINING RESOURCES.

WE HAVE INCUBATORS WHERE OUR LICENSEES LEARN THE BUSINESS OF RUNNING A CANNABIS DISPENSARY.

IT TAKES YOU ON EVERYTHING FROM INVENTORY MANAGEMENT TO STAFF TRAINING AND SUPPORT.

WE HAVE CONTRACTED RESOURCES TO HELP OUR LICENSEES BUILD THEIR FINANCIAL MODELS, HELP THEM THINK THROUGH HOW THEY'RE SPECKING OUT AND SCOPING OUT THEIR WORK AND WE REMAIN FULLY COMMITTED TO CONTINUING TO WALK HAND IN HAND WITH THE LICENSEES AS THEY OPERATIONALIZE THE BUSINESS.

WE DO WANT TO MAKE IT CLEAR TO ALL OF THE STAKEHOLDERS THAT WANT TO PARTICIPATE IN THIS MARKET, THIS IS A TOUGH INDUSTRY.

IT'S A TOUGH BUSINESS.

AND SO WHILE IT'S REALLY IMPORTANT TO HAVE THE DREAM AND VISION, IT'S ALSO REALLY IMPORTANT TO MARRY THAT VISION WITH VERY PRACTICAL APPROACH FOR HOW YOU ARE GOING TO OPERATIONALIZE THIS IN THIS MARKET AND HOW YOU CAN BE SUCCESSFUL.

>> IS IT TOO TOUGH KATIE?

>> IS IT TOO TOUGH KATIE?

SUCH AS THOSE INCUBATOR PROGRAMS, CONSUMER EDUCATION PROGRAMS PROGRAMS THEY CAN BE BOLDER, BIGGER, MORE FREQUENT.

BUT I THINK IT'S IMPORTANT TO GIVE O.C.M.

GRACE.

THEY SORT OF STARTED THESE JOBS THREE, FOUR YEARS AGO AND THEY'VE GOT A LOT TO DO.

NOW THAT WE HAVE A MARKETPLACE THAT'S UP AND RUNNING AND FUNCTIONING, I THINK THERE IS A LOT MORE TO KIND OF FINE TUNE AND DIAL IN.

>> YOU MENTION THE IDEA OF SOMETHING BEING OVER COMPLICATED.

IS THERE AN EXAMPLE THAT YOU ARE RUN INTO REPEATEDLY OR THAT STANDS OUT TO YOU?

>> I THINK BY AND LARGE, THE LICENSING ROLLOUT WAS WAY OVER COMPLICATED.

AND I UNDERSTAND THERE WAS A GOAL OR A DESIRE TO GET NEW LICENSEES UP AND RUNNING AS QUICKLY AS HUMANLY POSSIBLE.

>> WHEN YOU SAY LICENSEES, ARE YOU TALKING ABOUT DISPENSARIES OR LICENSES MORE BROADLY.

>> ACROSS THE ENTIRE CHAIN.

AND I THINK A LOT OF UNFORCED ERRORS OCCURRED DURING THAT ROLLOUT AND WE ARE STILL OR DEALING WITH THOSE WITH THOSE UNFORCED ERRORS, RIGHT?

SO, FOR EXAMPLE, THE CARD PROGRAM, WHICH IS GREAT, AND WELL INTENTIONED AND EXACTLY THE INTENT OR VISION OF THE M.R.T.A., THE CANNABIS LAW HERE IN NEW YORK WHICH IS ESSENTIALLY TO GIVE THE MOST VALUABLE KIND OF OPPORTUNITY TO PEOPLE WHO WERE IMPACTED BY A CONVICTION, A CANNABIS CONVICTION.

CLEARLY THAT REGULATION DID NOT COMPLY WITH THE LAW, RIGHT?

SO THERE ARE LOTS OF UNFORCED TECHNICAL ERRORS THAT LED TO LITIGATION AND INJUNCTIONS AND CONFUSION.

THE SOCIAL EQUITY FUND THAT WE JUST HEARD ABOUT-- >> WE ARE DEFINITELY GOING TO GET INTO THAT.

>> JOE BUD'S TAKING A LOAN FROM.

NOT A GREAT DEAL, TO BE HONEST, RIGHT?

I THINK A LOT OF LICENSEES HAVE LEARNED THAT THEY COULD GET BETTER LOANS AND BETTER FINANCING THROUGH THE PRIVATE MARKET.

SO I JUST THINK A LOT WAS NOT REALLY THOUGHT OUT YOU KNOW, FOR 10 STEPS I.

WAS JUST LIKE WE HAVE TO MOVE QUICK.

LET'S JUST DO THIS RIGHT.

BUT LOTS OF LAND MINES.

>> BEFORE WE GET TO FINANCING I WANT TO GIVE JOHN A CHANCE TO RESPOND.

ANYTHING ABOUT THE REGULATIONS IN THAT HAVE BEEN ROLLED OUT SO FAR THAT YOU WANT TO ADDRESS THAT KATIE JUST TALKED ABOUT?

>> I THINK WE ARE IN COMPLETE AGREEMENT THAT THE OFFICE IS A LEARNING ORGANISM.

WE HAVE GROWN THIS MARKET UNBELIEVABLY QUICKLY F. YOU COMPARE THE PACE TO WHICH WE HAVE GOTTEN 300 DOORS OPENED AND 1500 LICENSES ISSUED BENCHMARKED AT THE RATE OTHER STAYS MOVED, WE ARE PRETTY FAR AHEAD OF THE CURVE WITH THE SPEED WITH WHICH WE HAVE MOVED.

SECOND, I DON'T THINK THE OFFICE IS AT ALL OPPOSED TO REFLECTING THE WORK WE HAVE DONE SO FAR AND IDENTIFYING AREAS IN WHICH WE CAN MAKE AMENDMENTS TO INCREASE EFFICIENCY OR OPTIMIZE OUTCOMES FOR LICENSEES AND ONE EASY EXAMPLE OF THAT IS A PACKAGING LABELING MARKETING ADVERTISING RULES WHICH JOE ALLUDED TO.

WE WERE VERY INTENTIONAL IN STARTING OFF WITH A MORE RESTRICTIVE APPROACH TO PACKAGING, LABELING AND MARKETING AND ADVERTISING FOR CANNABIS BECAUSE WE WERE VERY CONCERNED ABOUT THE PUBLIC HEALTH RISK AND PUBLIC STAKEHOLDERS HAD A REALLY STRONG VOICE ENSURING THAT WE WEREN'T CREATING AN ECOSYSTEM THAT APPEALS TO KIDS OR PUTTING CANNABIS IN THE HANDS OF THE WRONG PEOPLE.

BUT NOW THAT THE MARKET IS OPERATIONAL AND WE HAVE DATA IN WHICH WE CAN ASSESS OUTCOMES, WE HAVE BEEN ABLE TO REVISIT OUR RULES AND SHARPEN OUR PENCILS A LITTLE BIT TO INCREASE SOME OF THE CHALLENGES THAT OUR LICENSEES HAVE BEEN COMPLAINING ABOUT.

WE ARE EASING THE RULES AROUND SIGNAGE, EASING THE RULES AROUND COLORS AND TYPE FORMS.

EASING THE RULES AROUND ADVERTISING, A LITTLE MORE FLEX FLEXIBILITY AND THE OFFICES, I I SAY THAT TO SAY THAT THIS IS FAR FROM DONE.

IT IS GOING TO BE A PROCESS OF EVOLUTIONARY BIOLOGY, IF I COULD CALL IT THAT.

AND THE OFFICES, I THINK IS VERY RECEPTIVE TO RECEIVING THE FEEDBACK.

WHAT WE DON'T WANT TO DO IS GET INTO A PROCESS OF KIND OF FRENETICALLY CHANGING RULES.

WE WANT TO DO THIS IN A SYSTEMIZED WAY AND REFLECT IDEALLY BASED, BAKE THE CHANGES BASED ON THE DEBATE DRIVEN ANALYSIS OF WHAT IS HAPPENING IN THE MARKETPLACE.

I THINK THERE IS RECEPTIVENESS TO REGULATING THE FRAME WHERE APPROPRIATE TO IMPROVE OUTCOMES.

>> THIS IS NOT SOMETHING NEW YOU ARE SAYING BECAUSE WE HAVE SPOKEN WITH THE ACTING DIRECTOR IN MY OTHER CAPACITY AND SHE HAS TALKED ABOUT THERE IS AN APPETITE FOR REFLECTION AS YOU MOVE FORWARD.

BUT NOW I WANT TO PIVOT TO SOMETHING FROM THE PACKAGE THAT MADE ME GO WHAT, HUH?

AND THAT IS THE SOCIAL EQUITY FUNDING THAT WAS ALLUDED TO AND THE IDEA THAT JOE TALKED ABOUT, AS THE FINANCING AVAILABLE THROUGH THE STATE BEING KIND OF A GOD SEND FOR THEM BECAUSE THAT IS NOT WHAT WE HEAR FOR THE VAST MAJORITY OF PEOPLE.

MAYBE THAT'S BECAUSE ALL THE PEOPLE WHO ARE HAVING A GREAT EXPERIENCE ARE BEING QUIET OR SOMETHING BUT, JOE, I KNOW THIS IS SOMETHING YOU FOCUSED ON, THE MONEY THAT HAS BEEN AVAILABLE FROM THE STATE, THE ASSEMBLY MAJORITY LEADER CALLED THESE TERMS PREDATORY.

WHAT ARE YOUR THOUGHTS ON THE FINANCING THAT WAS AVAILABLE FOR THESE FIRST-TIME MARIJUANA DISPENSARY OWNERS?

>> SHE SAID THAT ON YOUR SHOW.

>> I DIDN'T WANT TO BRAG TOO IT IS PRETTY GREAT THOUGH.

PEOPLE SHOULD LISTEN.

>> WHAT HAPPENED WAS NOTHING WAS PRESENTED.

IT WAS, YOU KNOW, HORRIBLY UNFORTUNATE, THE CRUX, LIKE IF I COULD SAY WHAT SHOULD HAVE HAPPENED, THAT $200 MILLION THAT WAS ANNOUNCED FOR THAT SOCIAL EQUITY FUND SHOULD HAVE BEEN PROVIDED BY THE LEGISLATURE.

IF WE CAN DO A HALF BILLION DOLLARS FOR THE BILLS NEW STADIUM AND I'M A GO BILLS BY THE WAY-- WE COULD COME UP WITH $200 MILLION TO EMBRACE THIS SOCIAL EQUITY PROGRAM.

THAT'S WHERE THEY WENT WRONG RIGHT OFF THE BAT.

THERE WAS NO MONEY THERE.

THEY CREATED A SOCIAL 15K FUND.

I'M NOT GOING TO DISPARAGE ANYONE.

IT DIDN'T MATERIALIZE BUT THERE WERE PEOPLE TELLING GOVERNOR HOCHUL AGAIN WHO JUST WALKED INTO A JOB SHE WASN'T NECESSARILY FULLY-- WE WEREN'T EXPECTING THAT RESIGNATION WHEN IT HAPPENED AND SOMEONE WAS TELLING HER, DON'T WORRY ABOUT IT.

DORMITORY AUTHORITY IS GOING TO BUILD 20 LOCATIONS A MONTH, ALL OF 2023.

THAT WOULD HAVE BEEN 240 STORES.

AND THAT PUT JOHN AND OTHERS AT A GOOD, TREMENDOUS PUBLIC SERVANTS IN A REALLY WEIRD SPOT BECAUSE THE GOVERNMENT WAS TELLING THE MONEY IS GOING TO BE THERE AND THE STORES ARE GOING TO BE THERE, APPLY, APPLY, APPLY.

DON'T WORRY ABOUT MONEY, DON'T WORRY ABOUT YOUR OWN LOCATION.

THEY GOT LICENSES, AND THEY DON'T HAVE THE MONEY OR THE LOCATION.

SO WHAT IS HAPPENING NOW, THERE IS MARRIAGES HAPPENING CLEARLY OF TRANSFERRING OF LICENSES FROM PEOPLE WITH LICENSES AND NO MONEY-- MOSTLY CAURD, AND PEOPLE WITH MONEY AND NO LICENSES THAT WANT TO GET IN THIS AND PROBABLY DON'T SEE A RETAIL DISPENSARY APPLICATION PORTAL OPENING.

FOR SOMETIME.

IT WAS A TRAGEDY AND THE LEGISLATE IRSHOULD HAVE PUT THAT MONEY IN AND IT WOULD HAVE BEEN AVOIDED.

>> THE ULTIMATE BREAKDOWN WAS ABOUT $50 MILLION IN STATE MONEY AND THEN 150 MILLION IN PRIVATE EQUITY AND IT'S IMPORTANT TO NOTE THAT THIS IS NOT A PROGRAM THAT WAS 1K4RU68 RUN BY THE OFFICE OF CANNABIS MANAGEMENT.

THE FINANCING COMES FROM THE DORMITORY AUTHORITY, FROM THE STATE OF NEW YORK, AN ENTITY THAT VIEWERS AND LISTENERS ARE HEARING ABOUT FOR THE FIRST TIME.

JOHN, HOW DID THE FINANCING OF THESE FIRST ROUND LICENSEES COMPLICATE YOUR WORK AT THE OFFICE OF CANNABIS MANAGEMENT?

I HAVE TO IMAGINE YOU WERE HEARING PEOPLE AND YOUR HANDS WERE TIED TO A CERTAIN DEGREE.

>> SURE.

WE HAD A LOT OF APPLICANTS, NEARLY A THOUSAND PEOPLE APPLIED FOR TO PARTICIPATE IN THE CONDITIONAL ADULT DISPENSARY PROGRAM WHICH INITIAL VISION HAD BEEN TO HAVE 150 STATE PROVIDED STORES OR STATE SUPPORTED LOCATIONS BUILT OUT.

AND SO THERE IS A LOT OF EXCITEMENT, A LOT OF ENTHUSIASM, A LOT OF ON FOLKS WHO PUT THEIR LIVES ON HOLD IN PARTICIPATION OF THE FUNDS.

IN ANTICIPATION OF THE FUNDS.

BUT, YOU KNOW, PART OF WHAT I THINK THE FUND FACED WAS PART OF THE CHALLENGE OF RAISING CAPITAL FOR-- RAISING CAPITAL FOR CANNABIS AT THE TIME THAT THEY WERE.

THE INDUSTRY ON A NATIONAL AND GLOBAL BASIS HAS BEEN QUITE CYCLICAL.

SO I THINK WHEN THESE IDEAS WERE BEING DEVELOPED IN 2018-2019 WHICH WAS A REALLY ROBUST SEASON FOR THE MARKET, IT WAS EASY TO BELIEVE THAT THERE WOULD BE TENS OF MILLIONS OF DOLLARS READILY ACCESSIBLE TO DEPLOY INTO NEW YORK AND EVERYBODY WOULD BE FALLING OVER EACH OTHER TO WRITE A CHECK.

THESE INDUSTRIES EVOLVED DRAMATICALLY OVER THE ENSUING THREE OR FOUR YEARS AND PEOPLE MANAGING THE FUND REALIZED IT WOULD BE MORE DIFFICULT TO RAISE THE CAPITAL NEEDED TO DEPLOY THIS.

I DON'T THINK THAT IS AT ALL TO SUGGEST THE STATE REMAINS ANY LESS COMMITTED TO TRYING TO ENSURE THE SUCCESS OF THESE LICENSEES AND THINK CREATIVELY TO ENSURE THEY GET OPERATIONAL BUT AS JOE HAS SAID, PEOPLE ARE THINKING EXPANSIVELY ABOUT HOW TO LEVERAGE THE OPPORTUNITY THEY HAVE.

THEY HAVE A LICENSE, FOLKS IN THE ECOSYSTEM THAT HAVE CAPITAL AND ARE WILLING TO PARTNER AND THINK CREATIVELY ABOUT COLLABORATION.

I DO THINK THIS INDUSTRY IS GOING TO BE BUILT THROUGH PARTNERSHIP THROUGH COLLABORATION, THE IDEA THAT EVERYONE WHO WANTS ONE IS GOING TO END UP GETTING THEIR OWN LICENSE AND THAT'S GOING TO BE THE FUTURE OF NEW YORK, I JUST THINK IT'S LESS LIKELY TO PLAY THAT WAY.

THE OFFICE CONTINUES TO THINK CREATIVELY AND EXPANSIVELY ABOUT WAYS IN WHICH WE CAN SUPPORT THESE LICENSEES WHO CONTINUE TO BELIEVE IN THIS OPPORTUNITY, WHO CONTINUE TO HOLD THE DREAM.

BUT WE ENCOURAGE FOLKS TO EXPLORE OPPORTUNITIES OUT IN THE PRIVATE CAPITAL MARKETS, OUT IN THE ECOSYSTEM OF LICENSEES WHO HAVE SOME EXPERIENCE AND TALK TO YOUR PEERS AND LEARN HOW THEY HAVE BUILT.

BECAUSE THERE ARE WAYS TO GET IT DONE IN THIS MARKET AND WE CONTINUE TO BE AMAZED BY THE CREATIVITY IN WHICH OUR LICENSEES SHOW THEY'RE TRYING TO BUILD.

>> DID YOU WANT TO ADD SOMETHING?

>> I DO.

WE WERE TALKING ABOUT THE NUMBERS AND IT WAYS CLASSIC EXAMPLE OF OVER PROMISING AND UNDER DELIVERING.

THAT FACT CAN BE TRUE.

THE OTHER FACT IS, JOHN AND THE TEAM AT OCM PROBABLY CREATED 10,000 JOBS, THAT'S THE NUMBER NO ONE IS REALLY SAYING.

LIKE HOW MANY JOBS HAVE BEEN CREATED IN THIS SPACE WITH THESE GROWERS AND PROCESSORS AND RETAIL STORES AND BUD TENDERS AND EVERYTHING SO THAT THOSE TWO THINGS CAN BE TRUE; THAT IT DIDN'T GO WELL AT THE BEGINNING.

AT THE SAME TIME, IT'S GOING MUCH BETTER NOW.

>> SO WE HEARD THE EXPRESSION OF LAND MINES REFERENCED EARLIER.

IS THERE A TICKING TIME BOMB WITH SOME OF THE DAASNY LOANS OUT THERE?

ARE THERE BALLOON PAYMENTS THAT YOU GUYS ARE THINKING ABOUT OR PAYMENTS THAT NEED TO BE MADE IN THE NEAR FUTURE THAT YOU ARE BRACING FOR THAT YOU THINK IS GOING TO BE DETRIMENTAL FOR SOME OF THESE DISPENSARIES.

>> I WOULD LOVE TO HEAR FROM KATIE.

I JUST WANT TO SAY ROSLYN ADAMS FROM THE CITY DESERVES A PULITZER PRIZE.

>> REPORTER FOR THE CITY.

>> IF SHE DID NOT POINT THIS OUT OVER AND OVER AGAIN WITH RESISTANCE, IT WOULD NOT HAVE SEEN THE LIGHT OF DAY.

>> I THINK THAT THE DAASNY FUND IS THE ISSUE OF THE YEAR THAT WOULD I LIKE TO SEE ADDRESSED AND FIXED.

AND THAT'S GOING TO TAKE PARTNERSHIP WEN BETWEEN THE EXECUTIVE AND THE LEGISLATURE AND ADVERTISE THE SEASON.

WE ARE IN THE BUDGET PROCESS AS WE SPEAK.

I THINK I WAS DISAPPOINTED IN THE GOVERNOR'S BUDGET WITH ITS LACK OF THE CANNABIS POLICY THAT WAS PUT DOWN ON THE TABLE.

I'M HOPEFUL THAT THE LEGISLATURE CAN PUT SOMETHING ON THE TABLE TO GET THE CONVERSATION GOING.

BUT I THINK MY UNDERSTANDING, AND AGAIN JOHN WILL HAVE TO KEEP MY HONEST HERE.

I THINK IT WAS ABOUT 24 PEOPLE OR TWO DOZEN CAWRDS WHO TOOK THE FINANCING FROM THE DAASNY FUND.

I THINK THEY DESERVE SOME RELIEF EITHER RESTRUCTURING AND LOWER INTEREST RATES, I THINK THEY DESERVE RELIEF.

AND THEN THE GAP NEEDS TO BE FILLED, RIGHT?

THERE NEEDS TO BE A FUND, PROBABLY A REVOLVING LOAN FUND OF SOME SORT THAT IS PROVIDING ACCESS TO CAPITAL TO SOCIAL AND ECONOMIC QAWCT QUALIFIED EQUITY QUALIFIED LICENSEES.

THAT IS THE LAW AND THAT IS THE EXPECTATION AND THE BIG THING YET TO BE SUCCESSFULLY IMPLEMENTED HERE IN NEW YORK.

AND AT THE TIME THE MRTA WAS ENACTED, IT WAS A CORNERSTONE COMPONENT OF THE LAW THAT SET IT APART VIS-A-VIS ANY OTHER STATE.

SO, YES, THINGS ARE LOOKING UP AND THE MARKET IS FUNCTIONING, BUT I THINK IT'S IMPORTANT TO KEEP PEOPLE HONEST AND STAY FOCUSED ON THAT COMPONENT OF THE LAW.

>> TO PICK UP ON WHAT POINT THERE AND THIS IS JUST TO ADD ON TO THAT.

BECAUSE THE PRIVATE MARKETS HAVE PLAYED A REALLY CRITICAL ROLE HERE IN THE EMERGENCE OF NEW YORK'S REGULATED INDUSTRY.

THE BULK.

FOLKS WHO HAVE OPENED THEIR STORES WERE PART OF THAT CONDITIONAL ADULT USE RETAIL DISPENSARY PROGRAM, ROUGHLY 300 STORES OPEN NOW AND MAYBE 280 OF THOSE ARE FROM THE CONDITIONAL ADULT RETAIL DISPENSARY PROGRAM.

ALL OF THOSE PEOPLE HAD HAD APPLIED WITH THE EXPECTATION THAT THEY WOULD BE RECEIVING STATE FUNDING AND AS KATIE SAID, ONLY ABOUT 22 OF THOSE ULTIMATELY ENDED UP OPERATIONALIZING THROUGH THE FUND, WHICH MEANS THAT YOU HAVE A COUPLE HUNDRED PEOPLE WHO WERE ABLE TO GO OUT, DESPITE EXPECTING STATE FUNDING, BUT WERE ABLE TO FIND RESOURCES FROM THE PRIVATE SECTOR SIDE AND OPERATIONALIZE.

THAT IS A PROMISING SIGN ABOUT INVESTORS AND STAKEHOLDERS ARE SEEING AND THE INTEREST AND OPPORTUNITY PEOPLE ARE SEEING IN NEW YORK'S MARKET.

EVEN AS I THINK SOME SUBSTANTIAL CONVERSATIONS TO BE HAD BETWEEN THE GOVERNOR'S OFFICE AND THE LEGISLATURE, WHICH WE WOULD-- >> YOU CAN WEIGH IN.

THIS IS A GREAT PLATFORM.

>> DEFINITELY NOT GOING TO WEIGH IN ON THOSE CONVERSATIONS BUT WE WILL SAY THAT THIS IS GOING TO TAKE BOTH PUBLIC AND PRIVATE SECTOR EFFORTS TO BUILD AND WE HAVE BEEN VERY HEARTENED BY SOME OF THE INTEREST AND ENTHUSIASM WE HAVE BEEN SEEING ABOUT THE OPPORTUNITY NEW YORK MARKETS REPRESENT.

>> LET'S STICK WITH FINANCING BECAUSE O.C.M.

RECENTLY PUT OUT A LIST OF 10 FINANCIAL INSTITUTIONS SERVICING CANNABIS BUSINESSES.

THIS CANNABIS BANKING THEY WE FOUND THESE BANKS WORKING VERY ACTIVELY WITH OUR LICENSEES WE HOPE THE LIST WILL GROW.

WE ARE HOPEFUL THERE WILL BE FEDERAL REFORM THAT WILL EASE-- >> STILL HOPEFUL.

>> THAT'S NOT GOING TO HAPPEN.

>> YOU NOY THERE WAS A WHOLE CHANGE IN THE PRESIDENTIAL ADMINISTRATION AND REPUBLICAN ADMINISTRATION.

>> IF YOU WORK IN CANNABIS, YOU HAVE TO BE HOPEFUL.

>> THAT'S TRUE.

>> AND LOOK, I THINK BANKING ISSUES IS A VERY NARROW LANE WHERE THERE MIGHT BE SOME OPPORTUNITY FOR COLLABORATION ACROSS THE AISLE IN WASHINGTON.

PART OF THE REASON I SAY THAT IS IF YOU LOOK AT THE WAY THIS INDUSTRY HAS GROWN WITH ITS PRINCIPAL RELIANCE ON PRIVATE CAPITAL, IT'S MEANT THE COST OF OPERATIONALIZING A BUSINESS DRAMATICALLY HIGHER THAN OTHER SECTORS OF THE ECONOMY AND GENERALLY PEOPLE WHO NEED ACCESS IN THE CAPITAL ARE NOT IN THE ROOMS WHERE THE CAPITAL IS.

SO THE ROLE THAT BANKS CAN PLAY IN EASY SOME OF THE COSTS SOBERED WITH SECURING PRIVATE CAPITAL, EASING SOME OF THE ACCESS AVAILABLE TO PEOPLE WHO MAY NOT NECESSARILY HAVE ACCESS TO HIGH NETWORKING INDIVIDUALS WHO ARE WRITING THE CHECKS.

IT IS GOING TO TAKE SOME TIME.

THE BANKS STARTED SERVING THIS INDUSTRY HAVE DONE A PHENOM THAT WILL SERVICE TO OUR LICENSEES AND WE ENCOURAGE MANY MORE FINANCIAL INSTITUTIONS TO COME AND GROW THIS VERY OPPORTUNITY RICH MARKET.

>> WITH THE 128-PAGE LAW MRTA SAME OUT SAID 50% OF THE LICENSE GO TO SOCIAL EQUITY LICENSES WHEN WHEN THE BILL CAME OUT, WE WERE LIKE HOW ARE THEY GOING TO DO THAT BECAUSE ACCESS TO THE CAPITAL IS NOT GOING TO BE THERE.

AND OTHERS ARE GOING TO PILE IN AND TAKE OWNERSHIP OF IT.

SO YOU KNOW, THAT SADLY DIDN'T NECESSARILY GET FIGURED OUT.

BUT YEAH, IT'S-- THE SOCIAL EQUITY THING MUST STAY PARAMOUNT.

EVERYBODY AT THIS TABLE AGREES WITH IT.

IT WAS ONE OF THE MOST BEAUTIFUL PARTS OF THE MRTA WHEN IT WAS WRITTEN, HOW THEY HAVE DONE IT, HOW IT TRANSPIRED AFTERWARDS WAS PROBABLY SLIGHTLY UNCONSTITUTIONAL AND SO ON, BUT THERE STILL NEEDS TO BE, WHETHER IT'S A REVOLVING LOAN OR THE BANKS ARE NOT GOING TO BE ABLE TO DO IT OVER THE NEXT FOUR YEARS, THERE HAS TO BE SOMETHING THAT NEEDS TO BE DONE TO PROVIDE THERE BECAUSE THIS WILL JUST GET-- WE ARE SPENDING A LOT OF TIME TALKING ABOUT DISPENSARIES NOW.

WE HAVE TO SWITCH GEARS AND TALK ABOUT THE CULTIVATORS AND PROCESSORS, THE ORIGINAL ONES THAT I REPRESENTED FOR A LONG TIME, AND WHAT IS HAPPENING FOR THEM.

AND I'LL JUST SAY, NOT ONLY ARE THEY OPERATING WITH THEIR HANDS TIED BEHIND THEIR BACK IN CERTAIN REGARDS COMPARED TO THE ILLEGAL WORLD, BUT THERE IS ILLEGAL STUFF HAPPENING IN THE ILLEGAL SPACE NOW.

CERTAIN ILLEGAL PROCESSORS DIVERTING-- >> WHAT DOES THAT MEAN?

>> TRAFFICKING.

BRINGING IN STUFF FROM OUTSIDE OF NEW YORK STATE, SAYING IT WAS GROWN, CULTIVATED AND PROCESSED HERE IN NEW YORK AND IT WAS NOT AND IT'S BEING PUT ON SHELVES AND THEY'RE COMPETING WITH THE PEOPLE WHO ARE TRYING TO FOLLOW THE LAW, DO EVERYTHING BY THE BOOK AND I'M NOT LOOKING AT YOU LIKE IT'S YOUR FAULT, JOHN.

>> BUT YOU ARE GOING TO GET TO FOLLOW UP.

>> .

THE NEFARIOUS ACTIVITIES THAT HAS BEEN AROUND FOR A LONG TIME IN THIS INDUSTRY AND IT'S FOUND ITS WAY INTO THE LEGAL SPACE.

AND I TRUST THAT LOCOMOTIVE HIVE I KNOW-- I KNOW FOR A FACT THERE ARE PEOPLE AT THE O.C.M.

FOCUSED ON THIS.

BUT AGAIN, YOU CAN'T DO TAX DUXZS, YOU CAN'T USE BANKS.

YOU CAN'T DO ADVERTISING.

AND THEN YOU ARE OR DEALING WITH , YOU KNOW, NECESSITY NEFARIOUS OPERATORS.

SO AGAIN, LONG WAY TO G. WE ARE VERY SATISFIED WITH HOW HAVE BROUGHT IT TO WHERE IT IS.

BUT THAT'S SOMETHING WE SHOULD TALK ABOUT, TOO.

>> JOHN, IS THAT SOMETHING THAT IS ON YOUR RADAR, THE ISSUE OF THE PROCESSORS BRINGING IN PRODUCT FROM OUTSIDE OF NEW YORK STATE?

>> I'LL SAY THIS.

WE DON'T COMMENT ON OFTEN-- ON ONGOING INVESTIGATIONS BUT WE TAKE ANY ALLEGATIONS OF INVERSION OR MORE BROADLY ANY NON-COMPLIANT ACTIVITY BY OUR LICENSEES VERY SERIOUSLY.

AND BOTH OUR COMPLIANCE UNIT, OUR ENFORCEMENT UNIT, AND OUR GENERAL COUNSEL'S OFFICE ARE VERY, VERY FOCUSED ON ENSURING THAT OUR LICENSEES UNDER THE RULES IN WHICH 3 THEY'RE EXPECTED TO COMPLY TO.

AND 2: THAT WE ARE TAKING APPROPRIATE STEPS TO CORRECT AREAS WHERE OUR LICENSEES MAY BE OPERATING IN A NON-COMPLIANT WAY.

WE DO NOT TOLERATE AND FIND IT UNACCEPTABLE IF THERE IS ACTIVITY HAPPENING EITHER WITHIN THE LEGAL MARKET THAT IS UNREGULATED AND UNREGULATED ILLICIT MARKET WHICH WE CONTINUE TO PROSECUTE AGAINST.

>> I'M GOING TO SHUT UP.

I HAVE SEEN SEEN OWE-- OWE SACKER.

-- OZARK.

>> YOU CAN'T BUILD UP NETFLIX.

I WANT TO COME BACK TO THE DISPENSARIES.

WE TALK ABOUT THE VAST MAJORITY FIRST ROUND OF LNSEES WHO HAD THE EXPERIENCE WITH THE CRUMS BUT LOOMING OUT THERE ARE THESE MEDICAL MARIJUANA COMPANIES WHO ARE LOOKING TO GET INTO THE CORRECT RATIONAL-- RECREATIONAL SPACE AS WELL.

CAN YOU TALK ABOUT WHAT THAT SHOULD LOOK LIKE?

>> NEW YORK'S MEDICAL CANNABIS MARKET IS OLD.

IT IS ABOUT A DECADE OLD.

AND IT HAS 10 ORIGINAL OPERATORS.

WE CALL THEM REGISTERED ORGANIZATIONS OR R.O.s.

>> I STILL DON'T UNDERSTAND THAT.

>> WHEN I SAY R.O., THAT'S WHAT I'M TALKING ABOUT.

AND THEY WERE MANDATED TO BE VERTICALLY INTEGRATED.

THEY'RE BIGGER.

THEY'RE GROWING, PROCESSING, DISTRIBUTING AND RETAILING CANNABIS.

THE MRTA CONTEMPLATES THEIR TRANSITION FROM MEDICAL TO ADULT USE.

THAT'S FOR VERY SPECIFIC PURPOSE, WHICH IS WHEN WE HAVE SEEN OTHER STATES HAVE MEDICAL MARKETS AND TURN TO ADULT USE, YOU SEE PATIENTS SORT OF DROP FROM THE MEDICAL MARKETS AND JUST GO TO THE ADULT USE MARKET AND SORT OF SELF MEDICATE IF YOU WILL, BECAUSE FOR SOME PATIENTS, YOU WILL LEARN WHAT YOU NEED, WHAT PRODUCT FORMS WORK.

SO JUST LIKE ANY OTHER CONSUMER, YOU GO TO THE MORE CONVENIENT KIND OF CHANNEL.

BUT FOR SOME PATIENTS, IT'S VERY IMPORTANT TO PRESERVE THOSE MEDICAL DISPENSARIES.

FIRST OF ALL, THERE IS A PHARMACIST ON STAFF.

SECOND OF ALL, IT'S A HIGHER TESTING STANDARD SO THE PRODUCT IS ARGUABLY HIGHER QUALITY.

AND THIRD OF ALL, IT'S A LOWER TAX RATE.

SO IT'S MORE AFFORDABLE PRODUCT.

>> AND MEDICAL IS AVAILABLE TO A WIDER POPULATION.

>> YOU DON'T HAVE TO BE 21.

>> CORRECT.

>> I HAVE A-- YOU HAVE TO HAVE A CARD.

>> YOU HAVE TO BE A CERTIFIED PATIENT BUT YOU DON'T HAVE TO BE 21.

THE M.R.T.A.

APPROPRIATELY CONTEMPLATED THAT THE MEDICAL OPERATORS COULD BE IN BOTH MARKETS WHICH HELPS KIND OF SUBSIDIZE THE MEDICAL MARKET WHICH IS NOT PROFITABLE BUT IMPORTANT FOR POLICY REASONS.

THE ORIGINAL KIND OF LEADERSHIP AT O.C.M.

HAD A VERY PUBLIC AND WELL COMMUNICATED WORLD VIEW THAT THE MEDICAL OPERATOR SHOULD NOT BE IN THE ADULT USE MARKET AT THE OUTSET OF THE PROGRAM LAUNCH.

SO THEY WANTED TO HOLD THEM BACK, LET OTHER LICENSEES GET GOING FIRST.

AND THEY WERE CRYSTAL CLEAR ABOUT THAT.

THE IMPACT OF THAT MEANS THAT THE MEDICAL OPERATORS HAVE BEEN -- WHERE EVERYONE ELSE IS SEEING GROWTH IN THEIR BUSINESS IN NEW YORK, THE MEDICAL OPERATORS ARE SHRINKING.

SO WE ARE KIND OF AT THAT POINT WHERE YOU KNOW, A YEAR FROM NOW, IF BEE DID THIS AGAIN, UNLESS SOME SERIOUS POLICY DECISIONS ARE MADE AND ACTION OCCURS, WE WOULDN'T REALLY HAVE A MEDICAL MARKET ANYMORE.

SO WE HAVE SEEN 11 DISPENSARIES CLOSE IN THE LAST 12 MONTHS.

I THINK, YOU KNOW, WITHIN THE NEXT 90 DAYS, WE WILL PROBABLY SEE ANOTHER THEE TO FOUR CLOSE.

AND WE ARE YET TO SEE ANYONE CARE, RIGHT, ANY ACTION TO TRY TO SAVE THE MEDICAL MARKET.

SO VERY FEW OF THEM ARE IN THE ADULT USE MARKETS RIGHT NOW.

HAVE YOU FOUR COMPANIES WHO ARE CO-LOCATING AT THEIR MEDICAL STORES AND THEY'RE SURVIVING AND THEY WILL CONTINUE TO SURVIVE.

BUT THE REST OF THEM ARE SORT IN A SLOW DEATH SPIRAL.

>> AND THE INDUSTRY IS CHALLENGING THE LICENSING FEES THAT THEY WERE ASKED TO PAY, IS MY UNDERSTANDING.

ALTHOUGH WE INITIALLY HAD HEARD FROM PEOPLE IN THE MEDICAL SPACE ABOUT HOW THEY WERE FINE PAYING PRETTY MUCH WHATEVER AND JUST A NEW DIRECTION.

IS THAT STILL A DEAL BREAKER?

DO YOU IMAGINE THAT THE MEDICAL MARIJUANA INDUSTRY IS GOING TO PLAY OUT THAT THREAD OF A LEGAL OBJECTION?

OR ARE THEY GOING TO BE SATISFIED WITH SOME OF THE INITIAL RULINGS ON THIS ISSUE?

>> THEY WILL CONTINUE TO PURSUE THAT LITIGATION.

AS BACKGROUND FOR YOUR LISTENERS, WHAT THE MEDICAL OPERATORS ARE DOING IS SUING THE STATE TO CHALLENGE THE LEGALITY OF THE $20 MILLION LICENSING FEE IMPOSED ON THEM IN REG TO TRANSITION INTO THE ADULT USE MARKET.

SO VERY FEW OF THEM CAN AFFORD THAT AGAIN.

FOUR OF THEM HAVE STARTED TO PAY THE $20 MILLION FEE.

THE REST OF THEM CANNOT AFFORD IT.

SO INSTEAD OF THAT FEE SERVING ITS PURPOSE, WHICH WAS TO COLLECT A SIGNIFICANT AMOUNT OF MONEY TO FUND THE SOCIAL AND ECONOMIC EQUITY PROGRAMMING THAT'S MANDATED IN THE LAW, IT SERVED AS A GATE, RIGHT?

IT WAS A BARRIER TO ENTRY TO KEEP THEM OUT OF THE ADULT USE MARKET, WHICH, AGAIN, WAS THE OVERT GOAL OF THE ORIGINAL LEADERSHIP OF O.C.M.

>> JOHN, WE'LL GIVE YOU A CHANCE TO WEIGH IN ON THAT AND COMMENT ON LITIGATION WHICH I'M SURE YOU ARE VERY EXCITED TO DO.

BUT JOE, YOU WERE CLEARLY INTERESTED IN RESPONDING TO THAT BASED ON THE FACES I CAUGHT OUT OF MY-- >> DID I MISS FACES?

>> KATIE IS ONE OF THE BEST LOBBYISTS IN ALBANY RIGHT NOW.

THAT'S WHY A LOT OF THE MEDICAL CANNABIS INDUSTRY, SHE REPRESENTS THEM BECAUSE SHE IS FANTASTIC AT WHAT SHE DOES.

I WOULD ARGUE THE OTHER NARRATIVE IS IN 2014, THE WINDOW OPENED FOR ANYBODY TO GET-- FOR ANYBODY TO GET INTO THE MARIJUANA SPACE IN NEW YORK, SOME OF THE BIGGEST OPERATORS THEY COULD GOT INTO THE SPACE TO HAVE FIRST MOVER ADVANTAGE WHEN LEGALIZATION ULTIMATELY HAPPENED.

SHE IS ABSOLUTELY RIGHT.

THE PEOPLE THAT WERE PREVIOUSLY RUNNING THE O.C.M.

HAD A HARD STANCE ON NOT LETTING THAT HAPPENED AND TO LET IT GROW FROM THE GROUND UP IN NEW YORK.

THE THING THAT IS TOUGH TO, YOU KNOW, REFUTE IS, SOME OF THEM WHO HAVE MEDICAL CANNABIS COMPANIES THAT HAVE TRANSITIONED INTO THE ADULT USE SPACE ARE DOMINATING SEED TO SALE.

THEY HAVE LARGE FACILITIES THAT THEY'RE GROWING.

I BELIEVE THREE OF THE COMPANIES-- DON'T BE MAD AT ME.

I BELIEVE THREE OF THE COMPANIES ARE CONTROLLING AT LEAST 30% OF THE FLOWER SALES IN ALL OF THE LEGAL SHOPS.

SO WHERE KATIE AND I HAVE ALWAYS HAD A HEALTHY DISCUSSION AND DIALOGUE OVER THE YEARS IS WHEN I REPRESENTED THE SMALL GUYS.

THE PEOPLE THAT WERE HEMP GROWERS THAT WERE THE HEMP PROCESSORS AND BECAME THE FIRST CULTIVATORS AND PROCESSORS.

AND SO IT WAS A LITTLE-- IT WAS A RESPECT, I HOPE AND RESPECT BACK AND FORTH.

BUT RIGHT NOW, SO AGAIN IF YOU ARE A LEGAL CULTIVATOR TO GO BACK TO MY POINT, YOU CAN'T DO THE 280E AND YOU CAN'T DO BANK OR ADVERTISING AND YOU HAVE THE LEGAL GUYS DOING ILLICIT ACTIVITY AND THEN HAVE YOU THE BIG OPERATORS, NOTHING WRONG WITH THAT.

IT'S A CAPITALIST SOCIETY, COMPETING.

IT'S A TOUGH SPACE.

THERE IS A BOOK OUT THERE CALLED CAN LEGAL WEED WIN.

IT WILL COME DOWN TO THE CRAFT CANNABIS, I DON'T WANT TO SAY THE CORPORATE BUT LARGER MAIN STREET CANNABIS COMPANIES, THE BUDWEISERS OF CANNABIS, ETC.

SO THERE IS THAT, TOO.

BUT SHE IS RIGHT.

THE MEDICAL SPACE HAS BEEN-- IT IS CRITICALLY IMPORTANT FOR A LOT OF NEW YORKERS THAT DEPEND ON IT THAT CAN'T JUST GO INTO A REGULAR DISPENSARY AND GET THE PRODUCT THERE.

>> AND I WOULD LOVE JOHN TO WEIGH IN ON THE R.O.

DOMINANCE, IF YOU WILL.

I THINK THAT'S NOT ACCURATE.

SO THERE ARE NINE R.O.s WHO ARE CULTIVATING PROCESSING AND DISTRIBUTE DISTRIBUTING OR AT LEAST AUTHORIZED TO DO THAT IN ADULT USE.

AND FOUR OF THOSE NINE CAN TURN ON THAT CO-LOCATED RETAIL.

MEANING THEIR DISPENSARIES SELL BOTH.

BUT I DO NOT THINK THERE ARE THREE R.O.s DOMINATING 25 OR 35% OF THE FLOWER AND ADULT USE.

THAT'S JUST CATEGORICALLY FALSE.

>> ALL RIGHT.

I THINK THERE IS DATA OUT THERE.

>> WELL, JOHN, HOW DO YOU SEE MEDICAL MARIJUANA COMPANIES BEING INTEGRATED INTO THE REACTIONAL SPACE-- RECREATIONAL SPACE.

>> I CANNOT COMMENT ON PENDING LITIGATION BUT MAYBE A COUPLE OF POINTS.

I THINK WE ARE ALL IN AGREEMENT ABOUT THE IMPORTANCE OF THE CRITICAL IMPORTANCE OF THE MEDICAL MARKET IN NEW YORK.

A LOT OF PATIENTS WHO BENEFIT FROM THIS PROGRAM.

I THINK THERE IS A LOT OF NEW YORKERS WHO COULD BENEFIT FROM THIS PROGRAM BUT EITHER DON'T FULLY UNDERSTAND HOW TO KIND OF OFFICIALLY BECOME A PATIENT, A REGISTERED PATIENT OR MAY HAVE KIND OF A LONG MEMORY OF HOW IT USED TO BE WITHOUT APPRECIATING HOW MANY CHANGES HAVE BEEN INSTITUTED TO MAKE THAT PROCESS OF BECOMING A PATIENT THAT MUCH EASIER.

SO I THINK WE ARE TOTALLY ALIGNED ON THE INTENTION TO CONTINUE TO PRESERVE PATIENT ACCESS IN NEW YORK.

TOO, ONE OF THE THINGS THAT MAKES THE MEDICAL OPERATORS UNIQUE IN NEW YORK AND THE POSITION RELATIVE TO ALL OF OUR LICENSEES IS 1: THEY'RE FULLY VERTICALLY INTEGRATED.

THEY CAN BREAUX, PROCESS DISTRIBUTE AND SELL AT THE RETAIL LEVEL.

THE ONLY LICENSEES ABLE TO DO THAT.

BUT TOO, THEY HAVE THE LARGEST CULTIVATION AUTHORIZATION OF ALL OF OUR LICENSEES.

SO ON A SQUARE FOOTAGE BASIS, THE MEDICAL OPERATORS ARE ALLOWED TO PRODUCE UP TO 100,000 SQUARE FEET OF CULTIVATION CANOPY.

OF INDOOR CONTROLLED ENVIRONMENT CULTIVATION CANOPY AND THAT'S NEARLY 10 X THE LARGE LARGEST AMOUNT OF CANOPY A REGULAR ADULT USE PRODUCERS WOULD BE ABLE TO PRODUCE.

SO THE AMOUNT OF CULTIVATION CAPACITY THAT THEY HAVE BEEN AUTHORIZED AND THE FACT THAT IT IS FOR THAT INDOOR PREMIUM CULL VAGUES AUTHORIZATION AND THE MEDICAL SIDE AND ADULT USE SIDE BOTH IN RETAIL ACCESS AND PRODUCING HIGH QUALITY PRODUCTS AVAILABLE TO OUR LICENSEES.

I THINK THE STRATEGIC PRIORITY FOR THE OFFICE OF THE NEXT YEAR, ONE OF THEM, IS GOING TO BE FIGURE OUT HOW TO CONTINUE TO ENSURE THE SUSTAINED, NOT JUST STABILIZATION BUT GROWTH OF THE MEDICAL MARKET, EVEN AS WE SEE THIS SIGNIFICANT PENDULUM SHIFT TO THE ADULT USE SIDE.

>> THESE ARE COMPANIES TRADED ON THE CANADIAN STOCK EXCHANGE AT THAT TIME HAVE STOCK SYMBOLS.

THESE ARE BIG, BIG OPERATORS.

THEY'RE NOT BAD PEOPLE.

I'M NOT BUYING INTO THAT THAT, YOU KNOW, ONCE YOU ARE SUCCESSFUL YOU ARE AUTOMATICALLY EVIL.

BUT THESE ARE BIG BIG COMPANIES AND JUST TO REMIND EVERYONE, THAT INJUNCTION IN 2023 THAT WAS INVOLVED WITH THE VETERANS LAWSUIT, THAT ONE THAT REALLY SCREWED THINGS UP.

SOME OF THEM OPERATORS-- MEDICAL OPERATORS WERE PART OF THAT LAWSUIT.

IS THAT CATEGORICALLY FALSE.

>> KIND OF.

THERE WERE FIVE R.O.s WHO FORKED A DIFFERENT COALITION THAT DID SUE.

THEN THERE WERE VETERANS WHO SUED WITH VERY SIMILAR ISRAEL CLAIMS.

SO THOSE CASES WERE JOINED.

BUT THE R.O.s SPECIFICALLY AND STRATEGICALLY DID NOT ASK FOR AN INJUNCTION AS RELIEF IN THEIR LITIGATION EFFORT.

THAT WAS THE VETERANS.

>> THAT PART, YEAH, I REMEMBER THE ADS, THE FULL-PAGE ADS IN THE NEW YORK TIMES THE GOVERNOR WAS NOT HAPPY ABOUT FROM SOME OF THE OPERATORS.

I'M JUST SAYING THE REALITY WE ARE IN, IF YOU ARE THINKING ABOUT GETTING INTO THE SPACE, BE AWARE OF ALL OF THE DIFFERENT MOVING PARTS BECAUSE IT'S NOT AS , YOU KNOW, DREAMY AS IT COULD BE PRESENTED.

>> KATIE WOULD YOU LIKE THE LAST WORD ON THIS BEFORE WE MOVE ON OR ARE YOU GOOD?

>> I FEEL LIKE THERE IS INTUITING GOING ON HERE THAT BIG CANNABIS OPERATORS ARE BAD OR SHOULD NOT BE IN THE MARKET.

I DISAGREE WITH THAT, RIGHT?

IT SOUNDS LIKE JOHN, I WOULD ARGUE MAYBE DISAGREES WITH THAT AND RECOGNIZING THAT THEY HAVE A ROLE.

Y THINK THERE IS A ROLE FOR BIG, SMALL AND MEDIUM AND PLENTY OF ROOM.

I DON'T VIEW THIS AS A ZERO SUM GAME.

>> WE ALL AGREE ON THAT.

>> LET'S GO BACK TO JOHN.

AND THE FUTURE OF THE CANNABIS CONSUMPTION EXPERIENCE, PARTICULARLY IN THE SPACE OF ON SITE CONSUMPTION.

IS THAT AN AREA WHERE YOU IMAGINE REGULATIONS ARE GOING TO BE COMING OUT SO THAT PEOPLE WHO BUY SOMETHING FROM A DISPENSARY MIGHT BE ABLE TO CONSUME IT AT THAT DISPENSARY AS WELL THE WAY WE MIGHT THINK ABOUT A CIGAR LOUNGE, FOR EXAMPLE?

>> YEAH, SO CONSUMPTION IS ONE OF THE KIND OF FAST EMERGING AREAS OF THE SECTOR, BOTH IN NEW YORK AND ACROSS THE COUNTRY.

AND IT'S KIND OF OUTLINED, STIPULATED IN THE LAW THAT CONSUMPTION LICENSE WOULD BE PERMITTED.

WHAT WE ARE WORKING ON NOW IS DEVELOPING THE REGULATIONS, THROUGH A STRUCTURAL FRAME BY WHICH THIS CAN BE DONE IN NEW YORK AND THERE IS A LOT OF DYNAMICS TO THINK ABOUT.

IF YOU APPROACH IT FROM THE LENS OF THE PUBLIC HEALTH FOLKS HAVE SPENT 30 YEARS TRYING TO GET SMOKING OUT OF OUR COMMON SPACES AND THE PROPOSAL TO INTRODUCE CONSUMPTION BACK IN, I THINK IS GOING TO MEET SOME RESISTANCE FROM THAT LENS.

AND WILL NEED HAVE HAVE A REAL MEANINGFUL CONVERSATION ABOUT THAT.

ALSO THE NATURE OF VIABILITY LOOKS LIKE FOR CONSUMPTION BASED BUSINESS.

WOULD SOMEBODY COME IN TO BUY THE GUMMY, EAT THE GUMMY ON SITE AND THEN WALK OUT.

>> I DON'T THINK SO.

I WILL NOT BE INVESTING IN THAT BUSINESS.

>> AND SO THERE IS KIND OF BUSINESS MODELS TO THINK ABOUT IN THE WAY IN WHICH ONE IS LOOKING TO TRY TO INSTITUTE A CONSUMPTION FRAMEWORK, THAT ENSURES THESE BUSINESSES CAN BE VIABLE.

AND SO WE ARE IN THE PROCESS OF DOING OUR DUE DILIGENCE AS WE SPEAK.

THIS IS GOING TO BE A LONG EFFORT.

I DON'T WANT TO-- >> LONG IN TERMS OF MONTHS, LONG IN TERMS OF YEARS?

WHEN SHOULD I PLAN ON GOING TO THE STORE TO EAT THE GUMMY AND THEN LEAVE.

>> I WOULD NOT MAKE RESERVE ACHESES YET.

>> CHANGE CHRISTMAS PLANS.

GOT IT.

>> BUT, YOU KNOW, IT IS A PRIORITY FOR THE OFFICE, BOTH THE POLICY AND THE HEALTH UNITS TO WORK THROUGH OUR POTENTIAL OPTIONS.

BUT WE UNDERSTAND THAT PARTICULARLY WHEN IT COMES TO SMOKING, WHICH IS I THINK GOING TO BE ONE OF THE MORE KIND OF DIFFICULT ELEMENTS TO FIGURE OUT, WE ARE GOING TO WANT TO MAKE SURE THAT WE HAVE REALLY CREATED A PATHWAY THAT ALLOWS FOR BUSINESS VIABILITY BUT ALSO PROTECTS THE PUBLIC HEALTH.

I WILL SAY THOUGH THAT EVEN ABSENT CONSUMPTION, WE WERE HEARTENED THAT THE LAW WAS WRITTEN IN A WAY THAT GAVE NEW YORKERS GRACE ON WHERE THEY COULD CONSUME.

THE IDEA THAT COULD YOU CONSUME OUT IN PUBLIC WHERE CIGARETTES ARE CONSUMED, AT LEAST MEANS THAT IN NEW YORK, YOU WOULD NOT BE PROSECUTED IF YOU WERE SMOKING ON THE STREET AS YOU MIGHT BE IN OTHER LEGAL MARKETS WHERE YOU DON'T HAVE THE ACCOMMODATION.

SO THIS IS GOING TO TAKE US A WHILE TO FIGURE OUT CONSUMPTION BUT NEW YORKERS DO STILL HAVE FLEXIBILITY BASED ON WHAT IS CURRENTLY PERMITTED UNDER LAW.

>> JOE, ANY SUGGESTIONS ON HOW THE REGS SHOULD BE WRITTEN?

ANYTHING THAT YOU THINK IS KEY TO ON SITE CONSUMPTION?

>> THIS IS NOT A NEW YORK THING.

THERE IS A CONSUMPTION PLACE IN LAS VEGAS AND ONE OR TWO IN CALIFORNIA.

THIS IS NOT A DOMINANT INDUSTRY ON THE RETAIL SIDE.

IN NEW YORK, I DON'T KNOW IF THERE IS ANYWHERE IN THE NATION WHERE CAN I SMOKE CANNABIS A CIGARETTE EVEN IN AMSTERDAM HOLLAND, YOU CAN'T DO THAT ANY LONGER.

THERE USED TO BE A CONCERN IF YOU WERE IN SECTION 8 HOUSING, IF YOU WANT TO CONSUME CANNABIS WHERE CAN YOU GO?

GO OUTSIDE.

THAT WAS AN AMAZING PART OF THE M.R.T.A.

>> WE THE ONLY HAVE A COUPLE OF MINUTES LEFT AND I WANT TO SPEAK WITH THE CUSTOMER EXPERIENCE VANTAGE POINT.

IN TERMS OF PRODUCTS AVAILABLE OR COULD BE AVAILABLE, WHAT ARE YOU THINKING ABOUT?

>> BEVERAGES.

ALL DAY EVERY DAY.

I LOVE BEVERAGES.

EVERYONE SHOULD GO FIND YOUR LOCAL DISPENSARY AND PICK UP SOME BENCHESES AND TRY THEM OUT.

-- BEVERAGESES.

I THINK IT'S A WINNING CATEGORY.

IT'S CHALLENGING IN ADULT USE FOR BEVERAGES TO WIN BECAUSE LOTS OF PEOPLE LIKE TO SMOKE.

LOTS OF PEOPLE LIKE TO VAPE.

THERE IS EDIBLES AND IF YOU THINK ABOUT THE PACKAGING OF THOSE OTHER PRODUCT FORMS, THEY'RE SMALLER SO THEY TAKE UP LESS ROOM IN YOUR VAULT AND ON YOUR SHELVES.

BEVERAGES ARE BULKY, THEY NEED TO BE REFRIGERATED.

THEY'RE EXPENSIVE.

THEY'RE EXPENSIVE TO BOTTLE AND CAN AND DISTRIBUTE.

AND SO FOR THAT REASON, I'M ALSO EXCITED ABOUT HEMP BEVERAGES AND THINK THAT'S ANOTHER FUN CATEGORY AND PRODUCT THAT SHOULD EXIST IN THE HEMP, THE LICENSED HEMP SPACE.

>> HOW WOULD THAT BE BIRCHT?

DIFFERENT.

>> YOU CAN HAVE HEMP DERIVED THC PRODUCTS AND THAT'S A HOT TOPIC IN THE CANNABIS AND MARIJUANA CIRCLES TO DEBATE WHAT THE RIGHT POLICIES ARE OR ARE NOT WHEN IT COMES TO HEMP DERIVED THC VERSUS ADULT USE MARIJUANA AND CANNABIS WHICH COULD BE A WHOLE OTHER SHOW.

BUT I'LL GIVE A PLUG FOR, YOU KNOW, LOW POTENCY HEMP BEVERAGES EXISTING IN LICENSED HEMP RETAIL STORES WITH HIGH POTENT MORE POTENT BEVERAGES LIVING IN YOUR ADULT USE RETAIL CHANNEL.

SPECIFICALLY HEIRLOOM.

WE ARE IN CENTRAL NEW YORK RIGHT NOW AND EVERYBODY SHOULD DO-- A PLUG FOR HEIRLOOM.

>> CERTAIN THINGS ARE SOLD IN CERTAIN PLACES AND I DON'T THINK CONSUMERS HAVE A GOOD SENSE WHAT THEY'RE BUYING AND WHERE DO THEY?

>> I DON'T THINK SO.

I THINK THERE IS A LOT OF CONSUMER CONFUSION AND THERE HAS BEEN SINCE 2021.

YOU'VE GOT THE ILLICIT MARKET THAT POPPED UP IN YOUR FACE.

THE EXISTING LEGACY MARKET WHICH IS SORT OF WHAT WE ALL GREW UP USING, RIGHT?

AND KNOWING.

>> LEGACY MEANS THE ILLEGAL SALES FOR TRANSLATORS.

>> AND THEN YOUR EMERGING REGULATED CHANNELS YOUR LICENSED BRICK AND MORTAR DISPENSARIES.

I THINK WHAT IS COMING THAT IS GOING TO BE MOST EXCITING FOR CONSUMERS IS DELIVERY CONSUMPTION LOUNGES AND I KNOW O.C.M.

IS WORKING ON IT.

IT IS GOING TO TAKE TIME AND THEY'RE GOING TO BE REALLY THOUGHTFUL IN ROLLING THAT OUT.

>> WE ONLY HAVE A MINUTE LEFT.

I KNOW THERE ARE PEOPLE ON INSTAGRAM RIGHT NOW WHO WILL DELIVER MARIJUANA, SHROOMS, WHATEVER.

WHEN DO YOU SEE DELIVERY OF LEGAL MARIJUANA SALES POTENTIALLY MORE THAN WHAT WE HAVE RIGHT NOW?

>> FIRST, DELIVERY IS ALREADY HAPPENING AMONGST OUR LICENSED RETAILERS.

>> ON A LIMITED SCOPE.

>> SOMEWHAT, I MEAN A LOT OF-- WE ARE SEEING FOLKS WHO ARE DELIVERING FROM MID STATE TO STYLED IF YOU SCHEDULE A COUPLE DAYS IN ADVANCE, WILLING TO BRING IT DOWN.

SO REALLY EMBRACING THE WAY OUR RETAILERS ARE CURRENTLY APPROACHING DELIVERY.

BUT WE SEE MUCH, MUCH MORE OPPORTUNITY TO EXPAND THIS OUT.

ONE POINT TO NOTE, HALF OF NEW YORK STATE'S MUNICIPALITIES OPTED OUT OF CANNABIS RETAIL SO THEY'RE NOT GOING TO BE DISPENSARIES PHYSICALLY HOUSED IN HALF OF THE STATE AND I THINK DELIVERY IS GOING TO BE A CRITICAL WAY IN WHICH CONSUMERS IN THOSE JURISDICTIONS CAN BE SERVED.

>> THEY CAN STILL OPT BACK IN THOUGH, CAN'T THEY?

>> THEY CAN.

WE HAVE SEEN HISTORICALLY IN OTHER JURISDICTIONS THAT TENDS TO BE A PROCESS.

SO, YOU KNOW, ITSELF CONVERSATIONS TAKE YEARS TO HAPPEN.

IT'S NOT A SWITCH FLIP FROM THE TIME LEGALIZATION HAPPENS TO A YEAR OR TWO AFTER PEOPLE OPTING BACK IN.

AND SO IN ANTICIPATION OF IT LIKELY BEING A LONGER TERM PROCESS TO GET THE JURISDICTIONS TO OPT BACK IN, WE THINK DELIVERY IS GOING TO BE A KEY WAY FOR CUSTOMERS ACROSS THE STATE, CONSUMERS ACROSS THE STATE TO BE SERVICED.

>> UNFORTUNATELY THAT'S ONE OF THE MANY TOPICS THAT WE COULD FLESH OUT FOR PROBABLY HOURS AND JUST WE DON'T HAVE TIME BECAUSE WE ARE OUT OF TIME NOW.

AND I WANT TO THANK OUR PANELISTS JOHN KAGIA, OF THE STATE OFFICE OF CANNABIS MANAGEMENT, KATIE NEER, FROM DICKINSON AND AVELLA, AND JOE ROSSI, OF MODERN ADVOCACY.

AND APPARENTLY AN OZARK FAN AND IF YOU WANT MORE CONNECT NEW YORK CONTENT - INCLUDING A BONUS FEATURE LOOKING AT THE EXPERIENCE OF A MARIJUANA FARMER IN CENTRAL NEW YORK - VISIT WCNY.ORG/CONNECTNEWYORK.

AND FOR MORE POLITICAL COVERAGE, INCLUDING DEEP DIVES WITH JOHN'S COLLEAGUES AT THE STATE OFFICE OF CANNABIS MANAGEMENT, CHECK OUT THE CAPITOL PRESSROOM AT CAPITOL PRESSROOM.ORG, OR WHEREVER YOU DOWNLOAD PODCASTS.

ON BEHALF OF THE ENTIRE TEAM AT WCNY - I'M DAVID LOMBARDO - THANKS FOR WATCHING.