fbpx
New York Cannabis in 2020: Will the state legalize?

New York Cannabis in 2020: Will the state legalize?

New York cannabis legalization could be bigger than California. But it all depends if the state Governor’s promise holds true.

New York tried and failed to legalize cannabis in 2019 even with broad support for legalization in the state. But now Governor Andrew Cuomo is promising 2020 will be the year it finally happens.

New York cannabis legalization would change the entire cannabis industry landscape, with such a huge population there’s no doubt a legal industry would succeed. But it all depends on the laws that pass, regulations and restrictions that the state puts on the new market that could damage it before it takes off.

New York Cannabis History

New York has always had a patchy relationship with cannabis and crime in general. The state received national backlash when the police department’s Stop-and-Frisk program was revealed to target minority communities, with most busts being for small amounts of cannabis possession, typically an eighth or less. Despite the state decriminalizing small amounts of cannabis possession in 1977, a loophole in the law allowed police to still unfairly arrest people.

In 2013, the Stop-and-Frisk law was found unconstitutional and was ended. Ever since then, the underground cannabis culture and industry has been slowly building in New York. Similarly to D.C. which legalized cannabis in 2017 but banned any dispensaries from opening, the decriminalization of cannabis in New York has led to rise in discreet delivery service, corner shops and other services for New Yorkers to get their cannabis with ease.

Not to mention that New York already has a medical cannabis program that could easily expand into a recreational market. In other words, the state is ripe for a legal market to explode.

Will 2020 Be The Year?

In early January of 2020, Governor Cuomo highlighted adult-use cannabis legalization as one of his 2020 priorities. His proposal includes forming an Office of Cannabis Management to regulate medical, adult-use and hemp programs; ensuring that social equity and social justice needs are met; working in concert with neighboring states; and creating a cannabis and hemp research center at the State University of New York.

New York is already a very expensive state, especially for those living in the city. It’s possible New York follows in the foot steps of California or Illinois and puts exorbitant taxes on cannabis goods while also allowing local municipalities to add their own taxes on top. If this happens, a legal industry could be extremely hindered (just look at California’s first year of legal cannabis).

The light at the end of the tunnel

One of the main reasons New York has put so much urgency into legalization is because of the so-called “vape epidemic” that struck the country in 2019. In case you missed it, hundreds of people became very sick from using private market vape cartridges that contained dangerous chemicals not typically found in legal products. The epidemic winded down at the end of 2019, but not until close to 50 people died from the illness.

While some states took the opportunity to use this epidemic as an excuse not to legalize, New York recognized that legalizing would open up a safe-access market for consumers that could prevent another epidemic. The Governor has already been meeting with fellow governors from Pennsylvania and Connecticut to discuss ideas as all three states move closer to legalization in 2020.

Cuomo said he wanted to legalize in 2019, and even with strong public support, wasn’t able to get it done. 2020 might just be another broken promise to try and stay in office, or a legal New York cannabis market could come and change the whole industry in a span of 12 months. We all have to stay tuned to see.

Illinois Recreational Cannabis: What to know for January 1st

Illinois Recreational Cannabis: What to know for January 1st

As soon as the clock hits midnight on January 1st, Illinois recreational cannabis sales are set to begin.

Illinois has been setting up regulations and requirements for recreational cannabis businesses over the last year, and it is all leading up to the first day of legal sales on January 1, 2020. The people are excited, and the state is ready to start pulling in those tax dollars.

However there are plenty of differences in the Illinois recreational cannabis laws and regulations for consumers that any would be dispensary-goer should know.

Who can buy Illinois recreational cannabis?

Just like every other recreational cannabis state, you must be 21 to purchase cannabis legally in Illinois. Out-of-state visitors will also be more limited in how much they can purchase compared to state residents, however there is no difference in price for in and out of state customers.

Illinois residents age 21 and over may possess 30 grams of cannabis flower, 500 mg of THC in a cannabis-infused product like edibles, and 5 grams of cannabis concentrate in total. These amounts are halved for non-residents. 

The totals are cumulative, so an Illinois resident could have 30 grams of flower, 500 mg of infused product and 5 grams of concentrate all at the same time. The same goes for nonresidents and their limits.

Where can I buy legal cannabis?

On January 1st, there are only going to be 37 Illinois recreational cannabis dispensaries open for business. If you’re in Chicago or the surrounding area you’re in luck, because that is where 24 of the dispensaries are located.

Champaign-Urbana, Peoria and Springfield all have two dispensaries nearby, and Carbondale, Effingham, Ottawa, the Quad Cities, Quincy and Rockford will each have one dispensary. Unfortunately, the state won’t begin reviewing applications for more dispensaries until March 15. Once approved, licenses will be distributed starting May 1st. On July 1st, up to 40 grower and infuser licenses will be issued along with an unlimited number of transportation licenses for in-state transport.

In other words, it’s going to be a slow start with limited access to Illinois recreational cannabis for most residents. The state will examine the progress through 2020 to determine whether or not more licenses need to be issued.

What about the taxes?

Like any recreational cannabis industry, Illinois is collecting some hefty taxes off the sale of legal cannabis. A good way to put it is, the higher you get, the higher the tax. For example, cannabis products with a THC level of 35% or less will only have a tax of 10%, and products over 35% will have a 25% tax. Basically, flower will have a 10% tax and concentrates will have a 25% tax. All infused products including edibles will have a 20% tax.

Additionally, state and local taxes will also apply, and the state law allows for municipalities to tax up to 3%. And if that isn’t enough taxes for you, local sales taxes also apply. The Illinois sales tax is currently 6.25%.

With limited access and extremely high taxes, it’s safe to say that Illinois recreational cannabis is not going to be cheap. But if there’s anything we can take away from other legal markets with high taxes, it’s that people are willing to pay for safe, legal access to cannabis.

Lastly, consumption

One thing that Illinois holds over other recreational cannabis states is its consumption laws. While public consumption is still prohibited, and smoking indoors was banned in the states in 2008, the Illinois cannabis laws allows on-site consumption at dispensaries, as well as cannabis smoking lounges. While no lounges have yet to open, some dispensaries and growers have applied to have lounges built in their existing facilities or separately attached for consumers.

An issue that will remain prevalent in every state that bans public consumption of cannabis is the impact it has on those in public housing or those living under a landlord that does not permit cannabis consumption. While a private homeowner can do whatever they please in the house they own, a renter is limited by what their landlord allows. This will continue to be problematic, especially for medical patients that need cannabis for serious ailments.

Since repetition is key, like any recreational cannabis state, Illinois has done some stuff well and some other stuff not so well (looking at those 37 dispensaries for the first year). But the trend of starting small and slow isn’t anything new when it comes to cannabis. States want to get their feet wet before diving into the deep end and that typically means more strict regulations that will ease up over time. For now, if you’re in one of the towns with a dispensary, check it out! And if not, plan a New Year’s trip to Chicago and check out a lot more options, and probably cheaper prices.

Michigan Cannabis Off to a Green Start

Michigan Cannabis Off to a Green Start

The first few recreational dispensaries have begun legal sales in Michigan, and the numbers are starting to roll in.

Michigan legalized cannabis in 2018, but took an entire year to plan and establish a legal marketplace. On December 1, 2019 the first recreational dispensaries were allowed to begin sales. Suffice to say the people of Michigan were ready.

While Michigan’s first day of legal sales was pretty different from other legal states there’s no way to deny that it was a success.

First Day of Legal Michigan Cannabis

Michigan cannabis consumers were definitely a little worried when December 1st rolled around, mainly because of the lack of locations to visit. The entire state had only five dispensaries for the entire population, three of which were in Ann Arbor.

But that didn’t stop the people of Michigan from lining up around the block and buying every last gram of cannabis that was available. Over 2,200 people spent over $220,000 at the three Ann Arbor stores alone, each averaging over $100. For only three stores in one day, that’s pretty good.

With over 200 people still waiting out in the cold until the stores closed at 9 PM, there were high expectations the following days as well. It’s safe to say those expectations were met.

Michigan Cannabis Makes Big Money

In the first eight days of recreational cannabis sales in Michigan, the state pulled in over $1.6 million, with over $162,000 being collected from the 10% sales excise tax and another $106,000 from the 6% state sales tax. The numbers are pretty big, especially for only five stores across the whole state, but keep in mind that’s over the first week of sales.

To put that in perspective, when Colorado legalized began recreational cannabis sales in 2014 the state sold over $1 million in cannabis just on the first day. However keep in mind that Colorado also had 24 dispensaries open on the first day of sales compared to Michigan’s 5. And taking tax dollars into account, Michigan is on a good track right now.

The state is projected to pull in close to $300 million in total tax dollars by 2023, with most of the money going to roads, schools and the state’s general fund.

Are More Dispensaries Coming?

The short answer is yes. But like any legal cannabis market, it won’t be without its roadblocks. The state began accepting applications for recreational marijuana business licenses on November 1 and has since awarded 21 licenses and pre-qualified another 73 applications.

But more than 1,400 of the state’s 1,771 communities have said they don’t want marijuana businesses in their towns, so finding a city that’s amenable to legal weed has been a challenge for businesses. With just a little more than 300 towns so far accepting legal cannabis businesses, it might be some time before there is a dispensary in close driving range for every Michigan resident.

Nevertheless by the end of 2020 there should be close to 100 dispensaries in Michigan. While still not a great amount compared to other states, it has become a common tactic among new legal cannabis states to start out slow and avoid a market crash from too many dispensaries and cannabis supply. It may mean overpriced cannabis and cannabis products for now, but it also means more quality products and prices that will drop in the future.

Hemp Industry Win: Farmers Might Finally Get Bank Access

Hemp Industry Win: Farmers Might Finally Get Bank Access

Banking has been an issue for cannabis and hemp businesses alike due to federal banking restrictions for years. But for hemp, that all could be changing very soon.

It’s safe to say that the hemp industry and cannabis industry don’t have the best relationships with banks. Because most banks are federal institutions, they have to follow federal law. This is why despite cannabis being legal in multiple state, businesses have a lot of difficulty finding a bank that will work with them.

While this will remain the case for the cannabis industry unless the SAFE Banking Act passes, the legal hemp industry has achieved another milestone in regards to banking for legal hemp businesses.

Hemp Industry Banking

Currently, the banks that actually work with legal hemp businesses could be counted on one hand. Due to strict requirements that come with loads of paperwork, most banks just avoid hemp businesses all together. But that is all about to change.

Federal and state bank regulators announced Tuesday that they were scrapping a burdensome requirement that banks said kept them away from the hemp business. With the requirement scrapped, banks no longer have to treat their hemp customers as suspicious and file reams of paperwork to anti-money-laundering authorities for each interaction.

In other words, with less paper work and red tape surrounding the legal hemp industry, banks are about to feel a lot safer about working with hemp businesses. And it’s not like the demand isn’t there either.

In November of 2019, the American Banking Association surveyed 1,800 agriculture-focused banks in the country and found that almost half had gotten questions from their farmer-customers about whether they would still do business with them if they started growing hemp.

Hopping on a moving train

Banks have been sitting on the sidelines of the legal hemp industry and legal cannabis industry for a while now, and the industry has progressed just fine without the financial institutions up to this point. Even though banks have been slow to embrace the cannabis industry, investors have been geared up to profit from it.

Analysts tracking publicly traded companies have added pot producers to their portfolios, in order to help investors decide where best to maximize their exposure to the industry. Ultra-rich venture capitalists have begun to treat pot businesses like tech start-ups. While some stocks have had their hiccups, the industry is looking strong and projected to continue growing through 2020 and beyond.

While banks have been slow to get onboard the legal hemp industry train, hemp businesses will likely be happy to work with them now that the requirements have been lessened. Even though hemp flower producers may still find it difficult having a product so similar to federally illegal cannabis, other businesses in hemp clothing and manufacturing should start finding it much easier to find a bank that will work with them.

Is cannabis banking next?

The hemp industry is making strides on strides in terms of legalization and banking access, whereas legal cannabis industries have been inching along slowly year over year. Progress has been exponential since Colorado first legalized in 2012, with multiple states following suit in the years after. But with federal law remaining the same regarding cannabis, progress has been slow with legal cannabis businesses still lacking banking access, despite state law.

The SAFE Banking Act is currently the best hope legal cannabis businesses have to achieve banking access in the near future. While the bill has already passed through the House of Representatives with large support from the banking industry. However not many are hopeful of the bill surviving the republican controlled senate headed by Mitch McConnell.

The irony of the whole situation is that McConnell is largely responsible for the passing of the 2018 Farm Bill the federally legalized hemp across the country, yet he will also be the reason that legal cannabis businesses may not get the access to banks they desperately need. Only time will tell, and for, all the wires are silent.

First Year of Industrial Hemp: Is it Booming or Bust?

First Year of Industrial Hemp: Is it Booming or Bust?

Millions of pounds harvested. Tons of CBD extracted. But the market might not be ready for so much industrial hemp.

There was no shortage of farmers ready to make the switch to industrial hemp after the Farm Bill passed at the end of 2018. Many were looking for a new cash crop that they could get in on to make some real money.

The beginning of 2019 and outdoor grow season was an exciting time for just about everybody involved. More states passed legislation over time establishing their own ground rules for industrial hemp, and farmers licensed up, cleared out their land and made the transition.

The Industrial Hemp Boom

The mass migration of farmers and traditional cannabis cultivators to industrial hemp led to a massive increase in production. Everything from hemp seeds and hemp flower to CBD extracts and the plant’s fibers were all the sudden in extremely high demand. So much so that just about every dispensary, smoke shop and even gas stations started selling CBD products on their shelves.

Sales exploded with more and more articles vouching for the medicinal benefits of CBD and the potential financial gains the industrial hemp industry could provide the country. On top of the media exposure, plenty of celebrities hopped on the CBD band wagon, with actors and athletes alike sponsoring and being sponsored by CBD companies, and some even creating their own.

CBD is the first real aspect of cannabis to break into the mainstream, and even be celebrated on a massive scale. Recreational cannabis pales in comparison to the international attention CBD has received just in the last 12 months. But with any new industry that takes off sprinting from the gate, there are going to be some trip-ups.

The Industrial Hemp Bust

While industrial hemp production was regulated on the state level, there is very little regulation in the way of CBD production, and barriers to entry were (and still are) extremely low. The lack of regulation allowed a lot of untrustworthy and potentially dangerous products out into the market. While the producers of these products made a pretty penny, the consumers soon started to learn of the risks of bad CBD products.

A lot of shady CBD manufacturers got in, sold their bad product made from poorly grown “biomass” and got out with their money. There was an industrial hemp seed deal in which the buyer was promised feminized seeds but received more than half male seeds, resulting in a multi-million dollar law suit.

As the hemp harvest season came to a close, a lot of farmers were hit with a massive reality check; too many people are growing hemp. Farmers brought their hemp to auction, some hauling thousands of pounds hundreds of miles in the hopes of getting a big chunk of change in return. Almost every single farmer at the auction left without a sale.

The overflow of product, both in biomass and CBD extract has led to a crash in the price as supply for outweighs demand. While the consumer may benefit from lower prices, many farmers who were hoping the industrial hemp would be the answer to their financial problems are starting to second guess their decision.

What Does 2020 Hold for Hemp?

The industrial hemp industry is due to have some fat trimmed. A lot of farmers are going to ditch hemp after an unsuccessful harvest and go back to their traditional row crops. As consumers learn about unreliable CBD products, the shady companies will drop off, and very few might step up and raise their standards.

Farmers with the right connections that were able to secure deals ahead of harvest made a lot of money this year, and it’s only going to increase in 2020. Hemp genetics and seed breeding is going to become more of a desired job title, and more cannabis breeders will begin adding hemp to their repertoire. 

Overall, while many did not have a successful year with legal hemp, just as many did. Industrial hemp will keep expanding into different forays of the plant’s abilities, like using its fibers to create concrete, clothing, paper and more. While some states have made a push against it, smokable hemp flower is also getting bigger as people look for a cannabis alternative that still provides medicinal benefits without the THC high.

Frankly, the possibilities of hemp, just like cannabis, are nearly endless. We can only look forward in excitement and enjoy the ride!

Illinois Cannabis is Legal? Why You Probably didn’t Hear about It

Illinois Cannabis is Legal? Why You Probably didn’t Hear about It

A major issue in the cannabis legalization movement is that every state can do it differently. Illinois cannabis legalization definitely did it different, and not for the better.

A lot of states that legalize cannabis add something new to their industry. Whether that’s limiting licensing because Oregon didn’t, or lowering regulations like Oklahoma did because California’s are so strict. Illinois is no different.

In June, Illinois became the first state in history to legalize the recreational possession and sale of cannabis entirely through the legislative process, whereas every other state has legalized through state-wide ballots. They also took a huge step in expunging the criminal records of nearly 800,000 residents in the state who possessed or purchased up to 30 grams of cannabis and were prosecuted.

With the state set to begin adult recreational sales in January 2020, all seems well and good. That is until you look a little closer at the legislation.

The Illinois Cannabis Crunch

Some states choose to be very lax with their regulations, like Oklahoma or Oregon. Both states have booming cannabis economies with Oklahoma’s in particular taking off faster than any other medical industry in the country. But both states are also facing serious over-supply issues.

Oregon has already taken the brunt of the surge, with so much more cannabis in the state than its residents consume that they had to pass a law permitting cross-border sales of cannabis to try to get rid of the excess. Oklahoma is following a similar path, with over 4,000 licensed growers and only 1,400 dispensaries for a state that is highly interested in cannabis. On top of that, there is roughly one dispensary for every 70 Oklahomans, which is not ideal for continued business traffic.

To avoid making the same mistakes, Illinois put a cap on how many dispensaries are allowed to open in order avoid cities filling up with pot shops too quickly. However at the end of 2019, the state only has 113 permitted dispensaries for recreational sales. Remember how Oklahoma had a dispensary for every 70 people? Illinois hardly has one for every 100,000.

An Attempt to Keep Big Business Out

It’s fair to say that Illinois’ cannabis legalization intentions were pure enough. The purpose of the dispensary cap is to prevent chains from taking over. The legislation limits chains to no more than 10 locations in the state, and limits the entire state to only 500 dispensaries, total.

That may sound like a lot of dispensaries, but 500 dispensaries is just enough for every 200 people to have a shop to visit. Additionally, the state won’t be adding any new dispensary licenses until May 2020, leaving four months of extremely limited supply. Even then, the state is only issuing 75 more licenses, leaving less than 200 dispensaries by the end of May at the earliest.

Also being a more conservative state, it is expected that a good bit of Oklahoma jurisdictions will ban retail dispensaries altogether, and a lot of people are concerned that the efforts to keep big business out will result in even more solicitation of private market cannabis.

A Slow and Steady Approach

Recreational cannabis sales are set to begin in less than 2 months in Illinois. With a little more 100 dispensaries to serve the entire state on January 1, it’s going be very difficult to get everyone taken care of for some time. But the Illinois cannabis industry doesn’t appear to be in a rush.

To put it all in perspective, by the end of 2020 Illinois is only projected to have about one tenth of the amount of dispensaries as Oregon has, with the maximum allowance of the legislation only being equivalent to one quarter of the Oregon cannabis industry when the Illinois cannabis industry is fully up and running in what will most likely be a few years.

This might not be a bad thing for Illinois though. Being a more conservative state outside of Chicago, demand for cannabis likely won’t be as high as other states that have legalized. Also with homegrowing allowed under the new law, residents that can’t find a nearby dispensary will either not participate in the industry, or start growing their own.

While the latter could lead to a rise in private market distribution, it isn’t very likely due to what most are projecting will be low demand outside major metropolitan areas, where dispensaries are most concentrated. This is why the industry hasn’t sparked a lot of interest nationally. A lot of people aren’t expecting any big developments for at least two years, and even then the Illinois cannabis industry will still be a small player compared to other states that have legalized cannabis.

Illinois cannabis legalization is a great thing for the state and the country. They may be moving more slowly than other states, but they may also just be more cautious and hoping to avoid the mistakes made by Oregon or California. Unfortunately it’s much too soon to say how the Illinois industry will perform, but usually where there is legal weed, there is prosperity.

Social Share Buttons and Icons powered by Ultimatelysocial
error

Like The Real Dirt? Please spread the word :)