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Cannabis: New York’s cannabis industry has yet to thrive, but social justice critics say the rollout is unlikely to be successful.

A group campaigning for the first licensed sellers of marijuana shops claim they are set up for failure.

The news

The Cannabis Social Equity Coalition revealed that the first sellers must buy products of “questionable quality and safety” from hemp growers in New York.

Moreover, they argue that the sellers are not trained for the market and risk a mountain of debt.

Under New York’s seed-for-sale law, products sold by licensed dispensaries must come from local farmers.

However, the group warned that the “biomass” type of marijuana grown by farmers is not suitable for smoking.

Reginald Fluellen of the Cannabis Social Equity Coalition said:

“This type of cannabis is considered low grade, best suited for processing into oils, vapes, topicals, and edible cannabis products.”

“It is not suitable as a smokable flower for sale at dispensaries.”

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Product claims

Despite the claims, the State Office of Cannabis Management disputes allegations that it is approving bad weed.

“Let’s stick to the facts, and they’re clear,” said Damian Fagon, the OCM’s chief equity officer.

“New York’s first adult-use dispensaries will be selling products grown by New York family farmers that have been tested for a wide array of potentially harmful elements.”

Fagon was referring to the following elements:

• Heavy metals
• E-coli
• Aspergillus
• Other contaminants aligned with practices in other states

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Training dispute

The Cannabis Social Equity Coalition also says dispensary owners haven’t received the training and incubation support needed to run the heavily regulated businesses.

As a result, companies are likely to struggle with high debt levels and “high-interest rates on debt repayment” from day one.

However, the OMC states that the claims were a buzzkill.

“These dispensary owners will receive support from the Social Equity Cannabis Investment Fund, breaking down barriers to capital in the complex industry,” said Fagon.

“They’re able to jumpstart the legal market with delivery rates, growing their capital before they open a storefront.”

Damian Fagon also said that the owners previously ran successful businesses.

“Jumping to conclusions about the products they will sell and their ability to be successful will only be damaging to them and our effort to establish the most equitable cannabis market in the nation,” he added.

During the public comment process on cannabis regulations, Fagon took a shot at the Cannabis Social Equity Coalition as MIA, saying:

“We look forward to their input on the regulations for most of the remaining market that were advanced by the Cannabis Control Board last month since we didn’t receive comment from them on the regulations for this dispensary program.”

Challenges

Despite the reassurance, there is no doubt that the program will face challenges.

A recent study revealed that there are likely thousands of illegal marijuana businesses operating in bodegas, tobacco shops, and other outlets in New York City.

Also, many pop-up shops likely sell dangerously contaminated weed.

Many of the black market weed sellers pay little or no taxes.

Meanwhile, the 36 state-owned retail operators that received state licenses in November will face a hefty tax.

The tax will make it harder for legal operators to compete on price with illegal operators across the city.

Reference:

New York cannabis launch turning into bad trip, social justice critics claim