New York Legalizes Recreational Marijuana

NY Legalizes Recreational Marijuana
NY Legalizes Recreational Marijuana

In a move that could have ramifications for the entire cannabis industry, New York passed a recreational marijuana bill that would make adult-use cannabis legal in the state. The legislation was approved by lawmakers in the New York State Senate just before the April 1 deadline for passing the state budget. So, what could legalization of recreational marijuana mean for major cannabis operators looking to make inroads in New York’s emerging cannabis market? Keep reading this blog to learn more.

NY Senate Votes to Legalize Adult-Use Cannabis

State senators in the NY Senate approved the recreational marijuana bill in overwhelming fashion, with 40 senators voting in favor of the legislation and just 23 senators voting against it. (The vote still came down mostly along party lines, with Republican lawmakers generally opposing legalization.) The historic vote by the New York State Senate came on the heels of NY Governor Andrew Cuomo voicing his own support for the legislation and signaling that he would sign the legalization measure if it reached his desk. In earlier statements, Cuomo had linked the criminalization of cannabis with the disproportionate incarceration of minorities and people of color, and Cuomo had called for legalization as a way to ensure fair treatment in the state’s criminal justice system when it came to enforcing drug laws.

Not long after the New York Senate voted in favor of legalizing adult-use cannabis, the other chamber of the New York State Legislature – the NY State Assembly – approved the bill by a vote of 100 to 49. The bill then headed to the desk of Governor Cuomo, who quickly moved to sign it into law. And just like that, New York became the 15th state, along with the District of Columbia, to legalize marijuana for recreational use. The move to make marijuana legal in New York comes on the heels of its tri-state neighbor, New Jersey, also legalizing marijuana for recreational use.

In addition to allowing for the legal sale of recreational marijuana at state-licensed dispensaries, the new law also allows individuals to possess up to three (3) ounces of marijuana and up to 24 grams of cannabis concentrate. Beyond that, the law goes further than the marijuana laws in many other states by allowing individuals to grow up to six (6) marijuana plants at their residences.

When Will Recreational Marijuana Be Legal in NY?

The NY cannabis legalization law goes into effect immediately. However, since it will take time to implement rules and set up the New York cannabis economy, it could be more than a year before dispensaries are prepared to start selling cannabis for recreational use.

The rules under which cannabis operators will ultimately be granted adult-use cannabis licenses are also still being worked out by lawmakers and other state officials. At present, it is expected that the 10 medical marijuana operators currently licensed in New York will be allowed to sell recreational cannabis. However, these operators will likely be required to pay larger-than-usual licensing fees to gain entry into the recreational marijuana market. Additionally, the operators looking to “double dip” into both the NY medical cannabis market and the NY adult-use market will be limited to just three (3) adult-use dispensaries each, with those dispensaries being located within or adjoining the operators’ existing medical marijuana dispensaries. The idea behind limiting the total number of dispensaries that any one cannabis company can own and/or operate is that the state wants to make sure that the New York cannabis market is competitive.

Social Equity Concerns Addressed in NY’s Cannabis Legalization Law

While other states have encountered issues with minorities being underrepresented among dispensary owners who are ultimately granted licenses for adult-use legalization, the New York cannabis legalization bill specifically addresses some of those problems. In fact, the bill explicitly supports what are known as “social equity applicants,” as well as microbusinesses that operate outside and apart from larger cannabis operators with a strong presence in multiple states. The NY bill includes provisions that would encourage at least 50% of all licenses for adult-use sales to be granted to social and economic equity applicants. Additionally, New York will create a state-run Cannabis Advisory Board with a directive to “actively promote and potentially license social and economic equity applicants.”

NY Adult-Use Cannabis Market Expected to Generate Billions of Dollars

Cannabis industry experts believe that the creation of a new cannabis market in New York will result in billions of dollars in annual revenues for the state. According to one projection, the New York economy would see approximately $2.3 billion in annual sales of cannabis by the fourth year of legalization, as well as the creation of at least 60,000 new jobs. The taxes imposed on adult-use sales will be set at 13%, with 9% going to the state and the remaining 4% going to local municipalities where the dispensaries are operated. There will also be a “potency tax” on tetrahydrocannabinol (THC), so that marijuana with higher concentrations of THC is taxed at a higher rate.

Contact Scythian Cannabis Real Estate Today

Scythian Cannabis Real Estate is a privately held cannabis real estate fund that assists cannabis operators with financing through sale-leaseback deals on properties used for retail operations. If you are a cannabis operator and would like to learn more, email us today.


Cannabis Concentrate Sales on Rise

Cannabis Concentrate Sales Rise
Cannabis Concentrate Sales Rise

Sales of cannabis concentrates like wax, shatter, hash, kief, badder, crumble, and live resin have risen sharply as more and more cannabis consumers turn to new products during the COVID-19 pandemic. While many other industries struggled over the past year, the cannabis industry thrived as people in states where cannabis is legal sought out the product for consumption in their own homes. What does greater demand for marijuana concentrate mean for the cannabis industry as a whole? Keep reading this blog to find out.

Cannabis Concentrate Market Exploding in Adult-Use States

According to the most recent retail data, cannabis concentrate sales in adult-use states are up more than 40% since the beginning of 2020. Nationwide, total sales of cannabis concentrates went from $567 million in 2019 all the way to $797 million in 2020. This meant that concentrates accounted for a larger share of the cannabis retail market, with other products like edibles, tinctures, and vape pens seeing a corresponding decrease in sales and market share.

One reason that people began to flock to concentrate products is that they became more comfortable with some of the more complicated ways of consuming cannabis. For example, dabbing usually involves the use of a dab rig, which is essentially a water pipe that diffuses heat and allows users to consume waxes and concentrates. Generally speaking, when people gain more experience using these complicated devices, they begin to explore different types of concentrate, including more expensive artisanal products. Moreover, new technologies such as portable, handheld vaporizers have made it easier for cannabis users to consume concentrate.

Marijuana Concentrates Are an Alternative to Vape Products

Recent health concerns about vaping have caused a lot of cannabis consumers to shift from using vape products to using concentrates like rosin and live resin because those concentrated products are solventless and don’t contain additives. For consumers who are worried about developing a lung condition from vape oils, cannabis concentrates provide a relatively healthy alternative.

Not only do these kinds of cannabis concentrates pose fewer health risks than vape products, but they also offer stronger doses of tetrahydrocannabinol (THC) than more traditional products like cannabis flower and pre-rolls. Greater THC levels typically mean a more potent high for the user. When it comes to marijuana concentrate, the THC content can be four to five times higher than the THC content for flower. Interestingly, the concentrate market tends to feed itself because frequent concentrate users may build up a tolerance for THC that makes it impossible for them to get a good high from using cannabis flower or smoking marijuana joints; hence, these users continue to seek out concentrate. This helps to explain why the cannabis concentrate market often grows at the expense of the flower market as more time passes.

The Future of the Cannabis Concentrate Market

Globally, concentrate is one of the most popular of all cannabis products. Worldwide sales of cannabis concentrates reached $1.8 billion in 2019. The more sophisticated consumption habits of cannabis consumers, spurred in part by the coronavirus pandemic, could mean that demand for concentrate will continue to increase in the years ahead. Cannabis industry experts estimate that total annual sales of marijuana concentrate in the U.S. and throughout the world could reach nearly $6 billion by 2026.

Contact Scythian Cannabis Real Estate

Scythian Real Estate is a privately held cannabis real estate fund that works with major cannabis operators in Colorado, Pennsylvania, and other states where cannabis is legal for either recreational use or medical use. Scythian also provides opportunities for individuals to invest in the cannabis real estate market. To learn more, send us an email.


Cannabis Industry Ready for Minimum-Wage Hike

Cannabis Salaries & Minimum Wage
Cannabis Salaries & Minimum Wage

As more and more states increase the minimum wage that businesses must pay to their employees, some have wondered whether this might affect the financial bottom line of the cannabis industry. However, industry experts do not believe that a minimum wage hike will have much impact on growers, cultivators, dispensaries, or the industry as a whole because most cannabis companies already pay their workers more than the proposed minimum wage. Keep reading this blog to learn more.

Cannabis Companies Pay More Than Minimum Wage in Most States

According to the 2020 Cannabis Industry Salary Guide, budtenders who work at dispensaries in states where cannabis is legal are paid, on average, $15 an hour. This is significantly more than the minimum wage in many of these states. Additionally, a lot of cannabis companies attract workers with generous benefit packages that put the workers’ annual pay well above the minimum wage. A recent survey of cannabis businesses found that roughly 90% offer benefits such as health insurance, paid leave, or a 401(k) plan to full-time employees who work at least 40 hours per week.

Some major nationwide retailers, like Target and Walmart, have announced that they will be moving toward a $15 minimum wage for all employees. However, many small businesses have not yet made that move – and it is here where cannabis companies are extremely competitive and, in many cases, are more likely to attract highly qualified job applicants.

So, why does the cannabis industry tend to offer higher salaries and greater benefits to employees? The specialized knowledge required to work in the industry and to serve knowledgeable customers often makes it difficult to find qualified workers. Moreover, cannabis businesses recognize the importance of retaining employees who are able to effectively do the job because continuity is critical to business growth.

Cannabis Businesses Thrive During COVID-19 Pandemic

While there were a number of thriving industries that paid good wages before the COVID-19 pandemic, the economic downturn caused by the pandemic forced many industries to scale back their operations and cut costs by either reducing their workforces or slashing salaries and benefits for employees. This was especially true of smaller businesses that needed to close their doors due to state lockdown orders. However, the cannabis industry actually managed to surge during the coronavirus pandemic because states declared dispensaries “essential businesses” that could remain open. The end result was that a lot of cannabis companies were able to maintain their workforces and, in some cases, even expand their workforces with increased pay rates and benefits.

Cannabis Operators Likely to Be Unaffected by Federal Minimum Wage Hike

While there has been talk in recent weeks and months of the U.S. Congress passing a $15 federal minimum wage, it appears increasingly unlikely that this will happen anytime soon. Despite the lack of a higher federal minimum wage, however, many states have been increasing their own minimum wage requirements for businesses. The highest minimum wage imposed by any state is California’s $14 an hour requirement, which applies to all businesses in the state that have more than 25 employees.

For cannabis operators with retail stores and cultivation facilities in states where cannabis is legal, the rise in minimum wage in many of these states has not made much of a difference to the businesses’ bottom lines. That’s because the majority of these cannabis operators are already paying their workers above the state-imposed minimum wage. Looking forward, any additional increases to state minimum wage requirements are also unlikely to affect cannabis companies in these states because most successful cannabis operators already factor in a higher cost of doing business – whether it’s higher salaries for workers or a “cannabis premium” imposed on real estate purchases.

Contact Scythian Cannabis Real Estate Today

Scythian Cannabis Real Estate is a privately held cannabis real estate fund based out of Denver, Colorado. Scythian has a current portfolio of cannabis properties used as retail dispensaries in Colorado, North Dakota, and Pennsylvania, as well as a pipeline of future acquisitions in states like Michigan, New Jersey, Massachusetts, and throughout the United States. If you are a cannabis operator looking to raise capital, or an individual looking to invest in the growing cannabis market, Scythian Real Estate can assist you. Contact us for more information.


Michigan Makes It Easier to Obtain Cannabis Licenses

Michigan Cannabis Licensing
Michigan Cannabis Licensing

Michigan officially legalized marijuana for recreational use in 2018, but the issuance of licenses to sell recreational marijuana was still limited to dispensaries that already had a medical marijuana license. That has now changed, with Michigan lawmakers opening up the cannabis license application process to more applicants and making it easier to obtain cannabis licenses as of March 1, 2021. What effect will this have on the cannabis industry, and will it attract investors from outside the state who are looking to sell recreational marijuana in the Michigan cannabis market? Keep reading this blog to learn more.

Michigan Changes Adult-Use Cannabis Licensing Requirements

In 2008, Michigan became the 13th state to legalize cannabis for medical use. It took another decade for Michigan to legalize adult-use cannabis in 2018, then another year for adult-use cannabis to be legally sold in Michigan, and still longer for the state’s cannabis market to open up competition for adult-use cannabis licenses. Under the terms of the state’s adult-use legalization act, which allows adults to possess up to 2.5 ounces of cannabis outside their residence and up to 10 ounces inside their residence, dispensaries needed to apply for and receive a state-issued license to sell recreational cannabis. However, the pool of eligible applicants for those highly coveted licenses was limited to dispensaries that already had an active medical marijuana permit.

The Michigan Marijuana Regulatory Agency (MRA) issued a press release that addressed the recent changes to Michigan’s cannabis licensing rules. MRA executive director Andrew Brisbo stated that “business entry into the adult-use marijuana market will be more accessible for all Michiganders, as the requirement to hold a license on the medical side of the industry will be removed.”

It is important to note the requirement to first obtain a medical marijuana license is not being removed for all adult-use marijuana licenses. Rather, the new rules will apply to individuals and businesses seeking certain types of recreational cannabis licenses:

  • Marijuana Retailer
  • Marijuana Processor
  • Class B Marijuana Grower
  • Class C Marijuana Grower
  • Marijuana Secure Transporter

The changes to Michigan’s cannabis license application process were approved in October 2020, but they did not go into effect until March 1, 2021. Upon implementation, the new rules immediately invalidated old versions of the cannabis application. Anyone who wants to apply for a recreational cannabis license will need to use the new application forms.

The new licensing rules were spurred by criticism of the restrictions on new licenses and a belief among some that allowing fewer licenses to legally sell adult-use cannabis in Michigan was causing the illegal cannabis market to thrive, particularly in rural areas that lacked adult-use dispensaries. In the MRA’s original advisory bulletin announcing the new cannabis licensing rules, the state’s marijuana regulatory agency said that “where the regulated market is not available to meet consumer demand, the illicit market stands ready to fill that void.” As the illegal cannabis market filled the gap, the agency noted, the city of Detroit saw a sharp rise in marijuana-related shootings and drug-related homicides.

Expansion of Adult-Use Licenses Could Boost Michigan Marijuana Market

The expansion of the cannabis licensing process is expected to open the Michigan cannabis market to new retailers. This, in turn, should provide a huge boost to the Michigan economy generally and the state’s cannabis market in particular. Although adult-use marijuana has only been legal in Michigan for a little over a year, legal cannabis sales have shown a steady upward trend on a month-to-month basis. In January 2021, adult-use sales in Michigan generated more than $67 million in revenue.

Importantly, the Michigan cannabis market will now be opened up to individuals and companies from outside the state. Under the old adult-use licensing rules, only Michigan-based class A marijuana growers or marijuana microbusinesses owned by residents of Michigan could apply for an adult-use license without already possessing a medical marijuana license.

Contact Scythian Cannabis Real Estate

Scythian Cannabis Real Estate is a privately held cannabis real estate fund that works with some of the most sophisticated cannabis operators in major markets throughout the U.S., including Colorado, North Dakota, and Pennsylvania. Scythian also assists cannabis operators that are looking to expand into new markets like Illinois, Michigan, and New Jersey. For more information, email us today.