This post was originally published on this site.
Jeffrey Hoffman is a New York City-based attorney who hosts “Ask Me Anything about Cannabis Legalization in New York” each week on LinkedIn. Hoffman and NY Cannabis Insider have partnered to bring those sessions into print in a Q&A format.
Hoffman’s practice focuses on cannabis industry clients, including licensees in the adult-use market, practitioners in the medical cannabis space, and cannabis adjacent product and service providers. He has a particular interest in social and economic equity cannabis license applicants, and he also informs and assists those convicted of cannabis offenses in getting such convictions expunged from their record. He can be reached at info@420jurist.com.
The following AMA from Jan. 3 has been edited for length and clarity. Hoffman’s next AMA is on Jan. 10 at 4:20 p.m.
What’s this about a Variscite lawsuit? Didn’t that get settled?
Yup, and it went so well for them last time that they’ve come back for another bite at the apple. Last I checked, the Dormant Commerce Clause was still a thing. The plaintiffs have again asked for a TRO and injunction, so we should find out where this stands in the coming days/weeks.
What do you know about discounts, coupons, rewards programs, and marketing limitations in New York?
Everything. I mean, it’s my job – I’m supposed to know what the marketing limitations are. And they are draconian. No discounting. No coupons. No rewards programs. You can’t market your product in any space where you cannot guarantee that 90% of the audience for the advertisement is reasonably expected to be twenty-one years of age or older. So basically strip clubs, liquor stores / bars, and casinos – though I will note that the patrons of such establishments are outstanding targets for cannabis marketing.
What is your take on the discord we witnessed at the CCB meeting?
I was actually at the meeting as I live not too far from the OCM office in Manhattan where the meeting took place. I was having lunch with a buddy of mine and I figured ‘what the heck’ it’s supposed to be a pro forma meeting and maybe my buddy would like to see the sausage get made. And boy was he not disappointed – I had no idea that we’d get the most explosive meeting to date. Board members were frustrated with each other, CCB folks were frustrated with OCM folks, dogs and cats living together…..MASS HYSTERIA. The purpose of the meeting was to approve two ROs to go adult-use, and they needed 3 yes votes. They got 2 yes’, 2 abstains, and 1 recusal – so the measure didn’t pass.
What other states is New York like in terms of regulation?
Well, like every state we’ve managed to screw it up in our own particular special way, but I guess if I had to pick a state I’d probably say Washington. Our regulators specifically talked about how they liked the Washington market, and I think that’s probably the closest regulatory scheme to where we are in New York.
How will distribution work on a wholesale level? Is a distributor license required?
Yes, there’s a distribution license. It was available in the recently closed application round. They’re gonna give out several of them. Right now, the adult use conditional cultivators and adult use conditional processors can distribute their cannabis products. But once the OCM has given out the distribution licenses and those licensees are up and running, the AUCC and AUCPs will no longer be able to distribute. So the way the supply chain will generally work is the cultivator will have to sell their product to a processor. The processor will process it and then they will have to sell it to a distributor (unless they’ve gotten their own distribution license) and then the distributor sells to a retailer and that is the point at which the potency tax is collected. And then the retailer sells to a consumer and that’s the point at which the retail tax is collected. So that’s the position of the distributor in the market. There will be licensed distributors and the distributors are the ones that will collect the potency tax.