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And now we wait.
The court has heard from the parties, from intervenors, from more intervenors. Some 23 provisionally licensed CAURD owners are now being considered for exemptions to the injunction imposed by Judge Kevin Bryant. We look forward to seeing them open for business soon.
The rest of the industry will simply have to wait for the wheels of justice, and for the process of issuing regulations and license applications, to play out. The persistent rumor is that we will see applications open up for social equity and general licensees in early October.
I’m sure I am not the only attorney fielding panicked calls from provisionally licensed CAURD applicants who desire to find some pathway to be licensed. There is no twist or turn; there is no special appeal; there is no lawsuit to file that will get you in line ahead of everyone else.
Hear me loud and clear: there is no expedited process through that second application. My recommendation is to use this time to get your proverbial ducks in a row. Quack, quack.
What can you do?
Visit a New York-licensed retail shop. An amazing number of people who say they want their own shop have still not gotten into a car, cab, or subway to check out one of the existing shops. You really need to sample the lemonade before setting up your own lemonade stand. I know you’ve bought weed before; this experience is different. You need to know what you’ve signed up for.
Order delivery from a licensed operator. Do you want delivery for your shop? Other than calling your “guy,” do you know what it’s like to order legal weed and have it show up at your place? Before you decide whether this is worth fighting over and exactly what you want in your delivery service, experience for yourself what others are doing.
Stay in contact with your lawyer(s). For that matter, narrow your team to the varsity line. Here’s why I’m saying this: during the CAURD application process, a number of organizations hosted pro bono tabling events for potential licensees. Then a not-insignificant percentage of applicants hired additional private lawyers, without first telling their pro bono lawyers that they had other counsel.
Then another not-insignificant percentage of applicants hired consultants who then suggested other lawyers, all without telling either the pro bono lawyers or the for-hire lawyers. The result is that “a lot” (I know – that’s a vague number, but if it applies to you, please hear me out) of CAURD applicants shop answers or else sit back and wait to hear from “their lawyer.” And the business owners, accustomed to survival in the streets, keep their various ancillary professionals and consultants working in silos – each not knowing exactly what the other is doing, and often not even being aware that the other is there.
But this is the regulated market and the dynamics work a little bit differently. Suddenly, what seemed like a good idea – to have three-to-four lawyers working in isolation – puts you at great risk for missing key information. Now is the time to clarify who represents you if and when you need to take legal action.
Start by answering this question: who is your Number One Lawyer? Who do you call when you have a question – and perhaps more importantly, who answers your calls when you have a question?
And about that accounting situation …call someone who is trained in cannabis accounting today!
Even if you are not operational, you have probably been spending money and attempting to raise money. If you established your business (meaning, if you filed for an LLC and got an EIN) in 2021, you needed to have filed your 2022 tax return for that business, even if all of the money was from you and the revenue was zero or in the negative.
If you filed for an extension on the tax return, it is due in either September or October, depending upon the entity choice. If you did not file for an extension, your return is late, but you still need to file it.
Make sure all of your other businesses are current with sales tax, payroll tax, and income tax.
Ya know – the state has computers. They can look this stuff up. Don’t wait until you are burning the midnight oil to turn in your second set of licensing documents to call somebody to do a tax return for you on another business you have on the side.
Make sure you have filed your personal 2022 tax returns.
If you filed for an extension, it is due in October.
If you have friends and family who are interested in investing, now is a great time to get serious about the dollar level of investment, the percentage of profit and loss of their participation, when do they expect to start getting repaid (is it a triggering event, such as a certain amount of gross revenue, or is it after so many months?). Check with the True Parties of Interest (TPI) rules. And no – don’t plan secret deals off of the books. That just leads to misunderstandings and could potentially get you crossways of the TPI rules.
Take a vacation. Once the injunction is lifted, it might be another two years before you can enjoy lazy days and Mondays with significant others. Enjoy it while you have it.
Diversify. If you were serious about becoming a gazillionaire with multiple streams of revenue, now is the time to work on the “other streams of revenue” part. If it’s real estate, the stock market, franchise ownership – whatever. It takes research and an initial investment of time. Now is your chance.
Continue to be smart, strong, and bold. The best is yet to come in NY cannabis. We did not come this far just to have the whole industry fizzle. Did we?