Author: nate marcarelli

A new study found that legal cannabis sales have generated billions of dollars in revenues for state and local governments. This won’t come as a surprise to proponents of cannabis legalization, many of whom have long argued that legalizing marijuana for recreational use would benefit state economies. As more people come to recognize the economic advantages of legalization, more states may look to legalize marijuana as a way to increase tax revenues. What effect could this have on the U.S. cannabis industry? Keep reading to find out.

Recreational Marijuana Sales Boost State Economies

The Marijuana Policy Project (MPP), the nation’s top organization dedicated to legalizing cannabis in the United States, recently published the research results of a study of the economic impact of legal marijuana sales. That study found that state governments in Colorado, Washington, and other states where recreational marijuana use is allowed have officially reported around $8 billion in tax revenues coming directly from legal cannabis sales.

In addition to the $7.9 billion in state tax revenues coming from legal marijuana sales, the MPP study also found that local city and town governments have generated several hundred million dollars in tax revenues from recreational cannabis sales at dispensaries.

These figures are remarkable, especially considering that adult-use cannabis is not yet legal in most states. Moreover, many of the states where adult-use cannabis is legal only recently created their cannabis markets.

The Colorado Cannabis Economy

The creation of a viable cannabis economy, including the infrastructure necessary to sustain that economy, can take time. For example, in Colorado, adult-use cannabis was legalized in 2012, but sales at dispensaries did not start to occur until 2014. Since then, Colorado has generated more than $1.5 billion in tax revenues from legal cannabis sales. The sales tax rate on adult-use cannabis is 15 percent, which applies to both wholesale and retail. Since this does not include any local taxes on cannabis sales, some municipalities have generated additional revenues from retail cannabis sales: the MPP study found that Denver has collected more than $210 million.

The high tax rate for recreational marijuana sales, coupled with booming business for Colorado dispensaries, has had a profound effect on several important areas of state and local government. For instance, the MPP study shows that $404.5 million of the Colorado cannabis tax revenues have gone toward funding improvements of the state’s public school system.

Washington, Oregon, and Alaska Among States Generating Cannabis Sales Tax Revenues

Colorado is not the only state that has been financing major public policy programs and other parts of state and local government with revenues from the legal sale of adult-use cannabis. States like Washington, Oregon, and Alaska have also been setting records for recreational marijuana sales, which has led to record tax revenues. In Washington, where the retail sales tax rate on cannabis is incredibly high, more than $2.5 billion in tax revenues have come from dispensary sales since 2014. In Oregon, where legal recreational marijuana sales did not start to happen until 2016, more than $540 million in tax revenues have been generated. And in Alaska, annual cannabis sales tax revenues set a record of $27 million in 2020.

Since the November 2020 election, several states have passed new laws legalizing the recreational use of marijuana. More states could soon join them, as state legislatures across the country debate marijuana legalization measures. This would likely have a significant effect on the economies in those states by creating a lot of jobs, in addition to providing the states with a boost to tax revenues.

Contact Scythian Cannabis Real Estate Today

Scythian Real Estate is a privately held cannabis real estate fund that has established relationships with the top cannabis operators in the country, including The Green Solution (Columbia Care), Grassroots Cannabis (Curaleaf), and LivWell Enlightened Health. If you are a cannabis operator looking to add capital, Scythian may be able to assist you. For more information, send us an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

The push to legalize cannabis for adult use in Minnesota gained a great deal of momentum when the Minnesota House of Representatives voted in favor of legalization. Now the marijuana legalization effort will head to the Minnesota State Senate, where it will probably face an uphill battle. Could recreational marijuana soon be legal in Minnesota? And what would this mean for large cannabis operators who are looking to expand their operations into new states? Keep reading this blog to find out.

New Law Would Make It Legal to Possess Cannabis in Minnesota

In May, a cannabis legalization measure came up for vote in the Minnesota House. Since that part of the state legislature is divided almost evenly along party lines – with a slight majority of Democrats over Republicans – the vote was expectedly close. Ultimately, the House voted 72-61 to pass the measure, representing a major step forward for legalization efforts in the state.

The proposed law would allow Minnesota residents over the age of 21 to possess as much as two (2) ounces of cannabis outside their homes. This would effectively eliminate the prosecution of most misdemeanor marijuana possession cases since the vast majority of these cases tend to involve the possession of a small amount of cannabis. Additionally, the proposed legislation would allow Minnesotans to have as much as 10 pounds of marijuana inside their homes. Importantly, however, the law would still not make it legal to grow, cultivate, or manufacture large amounts of cannabis without a state-issued license to do so.

What Is the Future of Marijuana Legalization in Minnesota?

States like Virginia and New York have legalized adult-use cannabis since the 2020 election. Could Minnesota be next? Now that the Minnesota House has expressed its support for adult-use cannabis legalization, the bill moves to the state Senate. However, that is likely where the measure will die. That’s because there is a clear GOP majority in the Senate, and Republican lawmakers have historically opposed efforts to legalize marijuana for recreational use.

Prior to voting on the legislation, the House held a dozen hearings to discuss and shape the proposed law. By contrast, the Senate called for exactly zero hearings on cannabis legalization before ending its session on May 10. The lack of a debate on the Minnesota Senate floor certainly does not bode well for the cannabis legalization bill in later sessions since Republicans would need to call for a vote for the measure to even have a chance of becoming law.

What Are the Economic Benefits of Cannabis Legalization?

The hope among supporters of cannabis legalization efforts in Minnesota is that those currently objecting to the proposed law will eventually see the benefits of allowing adult-use cannabis sales. One of these benefits is economic: states where cannabis has been legalized for both recreational and medical use have generated billions of dollars in annual tax revenues. With that in mind, lawmakers who drafted the latest version of Minnesota’s cannabis legalization measure included provisions that would establish a Cannabis Management Board to implement, oversee, and enforce the new regulations. This would include oversight of tax revenues from the legal sale of marijuana in licensed dispensaries.

The author of the bill, House Majority Leader Ryan Winkler, said that now is the time to change outdated laws criminalizing possession and use of marijuana. Winkler added that the legislation approved in the House would “right the wrongs of the criminal prohibition of cannabis that has failed Minnesota.”

Contact Scythian Real Estate for Information on Cannabis Sale-Leaseback Transactions

Scythian Real Estate is a privately held cannabis real estate fund that works with some of the most sophisticated cannabis operators in the United States. Scythian provides capital to cannabis companies through sale-leaseback deals involving properties used for retail dispensaries. If you are a cannabis operator looking to expand into new markets, or if you are interested in securing financing for existing operations, email Scythian today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Cannabis delivery is now legal in Denver, Colorado. The move by the Denver City Council is expected to open up the cannabis market to new customers who can now place orders online and over the phone, in addition to having marijuana delivered right to their front doors. What kind of impact could these recent changes to local regulations have on the Denver cannabis economy? And how significant will the benefit be to Denver cannabis operators? Keep reading this blog to find out.

Denver Overhauls Marijuana Laws to Allow Weed Delivery

Denver has one of the oldest and most well-established recreational cannabis markets in the United States, with Colorado becoming one of the first states to legalize adult-use cannabis in 2012, and Denver now boasting more than 200 marijuana stores. Now the city is making major changes to its regulation of recreational marijuana. The Denver City Council, which has 13 council members, unanimously approved the measure to allow for marijuana delivery. Denver Mayor Michael Hancock later signed the marijuana legislation, which is considered by many to be the biggest change to the city’s marijuana laws since adult-use cannabis first became legal in Colorado.

After Mayor Hancock approved the new law (on April 20, or “420 Day”), proponents of expanding the Denver cannabis market voiced their approval. Ashley Kilroy, the executive director of the Denver Department of Excise and Licenses, called the new law “historic” and noted that it would help to modernize Denver’s cannabis rules and regulations. Until now, weed delivery had been banned in Denver.

In addition to allowing recreational marijuana deliveries, the new legislation will also make drive-thru services at dispensaries a permanent feature. The drive-thru option was temporarily allowed during the COVID-19 pandemic in order to protect customers against the spread of the virus indoors.

Denver Cannabis Operators Must Apply for Marijuana Delivery Licenses

Denver cannabis operators who want to offer delivery services will need to apply for a transporter license. In fact, during the first three (3) years of the new marijuana delivery program, retail cannabis stores will be required to use licensed transporters for delivery services. According to Eric Escudero, the spokesperson for the Denver Department of Excise and Licenses, businesses will be able to start applying for marijuana delivery licenses in the summer of this year.

For the first six (6) years, new transporter licenses will be limited to social equity applicants, which allows minority-owned cannabis businesses and people in low-income communities to gain access to a market in which they have been disproportionately represented in the past. This is in line with Denver’s current rules that limit applications for new store, cultivation, and manufacturing licenses to social equity applicants.

Restrictions on Denver Marijuana Delivery Services

The new law does place restrictions on not just who can offer marijuana delivery services, but also on the way in which those services are provided. In fact, recreational marijuana transporters will be subject to a number of strict rules:

• Transporters must have dash cameras on their motor vehicles.
• Transporters must use ID scanners to check the IDs of customers and ensure that the correct person is receiving the marijuana.
• Transporters will be limited in the amount of cannabis product that they can carry in their vehicles.
• Marijuana deliveries can only be made to residential addresses, not businesses.

Denver to Allow Public Consumption of Marijuana in Hospitality Establishments

The decision to allow dispensaries to deliver recreational marijuana was not the only important move made by the Denver City Council: the council also approved public consumption lounges in the city. The lounges are being officially referred to as “hospitality establishments,” rather than marijuana lounges.

Cannabis businesses that wish to operate a hospitality establishment will need to apply for, and receive, a marijuana hospitality license. Applications for the licenses are expected to be made available later this year. Any operator granted one of these licenses can legally permit people to smoke marijuana inside a designated space. Additionally, some hospitality licenses will allow cannabis operators to sell recreational marijuana as well.

Contact Denver-Based Scythian Cannabis Real Estate Today

Scythian Real Estate is a Denver-based cannabis real estate fund that works with the most sophisticated cannabis operators in Colorado, which has the nation’s most developed legal cannabis market. Some of Scythian’s partners in Colorado include The Green Solution (TGS) and LivWell Enlightened Health. Scythian provides TGS and LivWell with capital through sale-leaseback deals, as well as assisting the cannabis operators with tenant improvements, zoning requirements, and new license acquisitions. If you are a cannabis operator in Colorado, or in another emerging cannabis market, email us today to learn more.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Another state is legalizing recreational marijuana, as Virginia Governor Ralph Northam recently signed into law a bill to make adult-use cannabis legal. The legislation marks a significant step in the push to legalize recreational cannabis across the U.S., with Virginia becoming the first state in the South to do so. Now that Virginia is set to make it legal for state-licensed dispensaries to sell cannabis for recreational use, will sophisticated cannabis operators soon flock to the state? And when will commercial sales of adult-use cannabis officially be allowed in Virginia? Keep reading this blog to learn more.

Virginia Governor Signs Recreational Marijuana Law

Recreational marijuana is soon going to be legal in Virginia. Virginia legislators initially passed a bill to legalize adult-use cannabis in February of this year. However, Virginia Gov. Ralph Northam was reluctant to sign the bill into law until lawmakers made some significant changes to the timeline for actually legalizing cannabis. In fact, Northam proposed several amendments to the bill. Once the Virginia General Assembly incorporated, and approved, those amendments, Northam agreed to formally approve the bill and affix his signature to the legislation. This comes just one week after New Mexico also legalized recreational cannabis.

When Will Adult-Use Cannabis Sales Be Allowed in Virginia?

Although Virginia will be legalizing marijuana for recreational use, there is still some question about exactly when different aspects of the new law will go into effect. For some time now, state lawmakers have been engaged in negotiations to potentially accelerate the timeline for allowing individuals to legally possess small amounts of marijuana without being subject to arrest and imprisonment. In fact, Virginia had already decriminalized marijuana possession. Even with Governor Northam having signed the new cannabis legalization bill, however, lawmaker negotiations remain in progress.

At present, the new law calls for marijuana possession to be officially legal on July 1, 2020. This means that all adults over the age of 21 will be able to legally possess up to one (1) ounce of marijuana. At the same time, it will also be legal for individuals to cultivate small amounts of marijuana (e.g., up to four cannabis plants) in their residences. Moreover, most individuals who have previously been arrested and/or convicted on marijuana possession charges in Virginia will be able to have their criminal records expunged. That’s because the bill includes language that “modifies several other criminal penalties related to marijuana, and imposes limits on dissemination of criminal history record information related to certain marijuana offenses.”

The commercial sale of recreational marijuana, however, will not be allowed until January 1, 2024. This is meant to give state and local officials time to vet applicants for licenses, as well as to create the conditions necessary for a thriving cannabis market in Virginia.

Social Equity Licenses for Cannabis Operators in Virginia

Licenses to sell recreational marijuana in Virginia will be approved by a state cannabis board. The board will be under strict guidelines to limit licenses to 400 retailers, 25 wholesalers, 450 cultivators, and 60 manufacturers.

Importantly, the Virginia recreational marijuana law also includes provisions that require the state to prioritize “social equity licenses” when deciding which applicants will be granted licenses to sell adult-use cannabis at dispensaries. This is important because many other states to legalize recreational cannabis have seen a disproportionate number of licenses go to white-owned businesses at the expense of local minority businesses.

Impact of New Law on Virginia’s Recreational Cannabis Market

Virginia already has a thriving medical cannabis market, and it is expected that recreational cannabis will eventually be made available for sale at the same dispensaries. The creation of a recreational marijuana market in Virginia could have huge implications for the cannabis market more generally – especially since Virginia is the first Southern state to open its doors to commercial cannabis sales.

The retail sale of cannabis products in Virginia is expected to generate up to $500 million in sales during the first year of legalization. That figure could rise to as high as $1.4 billion by the fifth year of legalization, according to cannabis industry experts.

Contact Scythian Cannabis Real Estate for Information on Sale-Leaseback Deals

Scythian Cannabis Real Estate is a privately held cannabis real estate fund that helps cannabis operators get the financing they need through sale-leaseback transactions on properties used as dispensaries. Scythian works with some of the largest and most sophisticated retail cannabis companies in the United States. If you are a cannabis operator interested in adding capital, email Scythian today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

New Mexico is the latest state to legalize recreational marijuana. The New Mexico governor recently signed legislation that will officially make cannabis legal for adult use in the state. What could this mean for the New Mexico economy, and for savvy cannabis operators who are looking to expand their reach into new markets? Keep reading this blog to learn more.

New Mexico Governor Signs Law to Legalize Adult-Use Cannabis

New Mexico is set to become the seventh state since the November 2020 election to legalize adult-use cannabis. The New Mexico state senate passed a cannabis legalization bill earlier this year, shortly after New Mexico Gov. Michelle Lujan Grisham called for a special legislative session to consider, among other things, the legalization of marijuana for recreational use. With previous opponents of legalization no longer in the state senate after the November election, the bill was quickly approved by legislators. Despite opposition from most Republican lawmakers in the state senate, some GOP senators grudgingly supported the measure as a way to regulate marijuana and ensure public health and safety.

Although Lujan Grisham signed the recreational marijuana bill into law on April 12, the possession and use of cannabis for recreational purposes won’t technically be legal for a few more months because state officials still need to work out some of the details. This includes evaluating and approving licenses for cannabis product testing labs, as well as establishing rules on product safety, qualifications for applying for a cannabis operator license, and standards for training employees who work as “cannabis servers” at dispensaries.

What Is New Mexico’s Recreational Cannabis Law?

Linda Trujillo, the superintendent of the New Mexico Regulation & Licensing Department, said that adults over the age of 21 can legally grow small quantities of marijuana – six (6) plants per person or 12 per household – at their residences beginning on June 29, 2021. Additionally, individuals will be allowed to possess up to two (2) ounces of marijuana outside their residences.

Some other important aspects of the new law include the following:

• Cities and towns can’t ban cannabis businesses, but they can place limits on location and hours of operation.
• Marijuana cultivation quantities will be capped for the first few years.
• Marijuana must come in child-proof packages.
• State lawmakers will have the ability to work with Native American tribal governments on separate cannabis deals.
• Employers can still fire employees who use marijuana.

When Can Recreational Cannabis Be Sold in New Mexico?

Legal sales of recreational cannabis won’t happen until next year because cannabis operators will need to apply for state licenses. The legal sale of adult-use cannabis in state-licensed dispensaries is scheduled to start by April 1, 2022.

Although cannabis operators won’t be able to sell adult-use cannabis until 2022, they will be allowed to start cultivating marijuana several months in advance in order to meet what is expected to be significant demand for their products. There is already a robust market for medical cannabis in New Mexico: more than 112,000 patients, or roughly 5% of the state’s population, are currently enrolled in New Mexico’s medical marijuana program.

The Creation of a Cannabis Economy in New Mexico

Proponents of cannabis legalization in New Mexico have long argued that the creation of a legal cannabis economy within the state will help to generate jobs for residents, as well as revenues for state and local governments. New Mexico will impose a 12% tax on legal cannabis sales at the outset, with that tax rate steadily increasing to 18% as more time goes by. (These new taxes will not apply to medical marijuana sales.) The expectation is that New Mexico’s recreational cannabis market will thrive and provide the state with much-needed tax revenues in the future.

New Mexico Marijuana Reform Efforts and Social Justice

In addition to providing a huge boost to the New Mexico economy, the legalization of marijuana for recreational use could also change the state’s legal landscape. In fact, marijuana reform is something that NM Governor Lujan Grisham has long supported. After signing the cannabis law, she addressed the disproportionate arrests and convictions for marijuana possession among racial and ethnic minorities. According to Lujan Grisham, marijuana legalization will help to “bring about social justice in ways in which we have been talking about and advocating for, for decades.”

One specific way in which the new law could impact social justice is by leading to the release of more than 100 people who are currently incarcerated for low-level marijuana possession or distribution charges. Additionally, the new cannabis law includes a provision that will allow for thousands of New Mexico residents to automatically expunge past marijuana possession convictions from their records. Beyond that, law enforcement will no longer be able to use the odor of marijuana as justification for police searches of vehicles, residences, or other private property.

Contact Scythian Cannabis Real Estate Today

Scythian Real Estate is a privately held cannabis real estate fund that has strong relationships with the top cannabis operators in the United States. Scythian provides capital and other assistance to cannabis companies with dispensaries in states where marijuana is legal for recreational use. If you are a cannabis operator looking to add capital and/or expand your business into a new cannabis market like New Mexico, Scythian Real Estate may be able to help. For additional information, send us an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

It appears that it will be a little longer before adult-use cannabis is legal in North Dakota. That’s because the North Dakota State Senate recently voted against a bill that would have legalized marijuana for recreational use. What does this mean for the future of the North Dakota cannabis market? And what could it mean for cannabis operators in North Dakota? Keep reading this blog to learn more.

North Dakota State Senate Rejects Adult-Use Legalization of Cannabis

Marijuana reform efforts have been underway in North Dakota for quite some time. So far, however, those efforts to change existing laws that prohibit adult-use cannabis have come up short. The latest example is the recent vote by the North Dakota Senate. The ND Senate vote on a bill to legalize recreational marijuana was lopsided: 37-10 to defeat the proposed legislation, also known as House Bill 1420. Moreover, state senators only debated for a mere 30 minutes before casting their votes. This was not terribly surprising, especially given the composition of the ND Senate and the generally conservative politics of the state. During the brief debate over the proposed law, several Republican senators argued that increased use of marijuana would have negative consequences for young people who became addicted to the drug, as well as increasing the incidence of DUIs and traffic accidents.

While the North Dakota Senate was strongly against the push to legalize adult-use cannabis in the state, the North Dakota House was actually in favor of the idea. In February 2021, members of the ND State House passed a cannabis legalization bill by a vote of 56-38. Remarkably, that legalization measure had bipartisan support, with a Republican member of the House sponsoring the bill. That member, Rep. Jason Dockter, said that he supported the proposed legislation because he feared that “a more liberal citizen-initiated measure” might appear on the ballot in the 2022 election in the absence of action by state lawmakers now.

The legislation that was up for a vote in the North Dakota Senate would have limited the legal use of recreational marijuana to individuals 21 and older. The law also would have limited legal possession to a maximum of one (1) ounce of marijuana, restricted legal possession to private property, and prohibited individuals from growing marijuana at their residences. Additionally, the bill called for a total of just 18 dispensaries to be approved for state licenses.

Recreational Marijuana Could Be on North Dakota Ballot in 2022

At present, only medical cannabis is legal for purchase and use in North Dakota. So, now that the North Dakota Senate has defeated the most recent iteration of a recreational marijuana legalization bill, what happens next? It appears that the next realistic opportunity to legalize cannabis for recreational use in North Dakota will come in the 2022 election. The last time North Dakota voters had an opportunity to weigh in on adult-use legalization came in 2018, when they defeated a legalization measure by a 59-41 margin. If the results of cannabis reform measures in other states during the 2020 election are any indication, however, North Dakota’s prospects for recreational marijuana legalization this time appear quite strong.

In fact, many cannabis industry observers believe that it is just a matter of time before recreational cannabis is legalized for both sale and use in North Dakota. Experts point to North Dakota’s neighboring states – South Dakota on the southern border, Montana on the western border, and Minnesota on the eastern border – all of which have already legalized medical marijuana, while both South Dakota and Montana have also already legalized recreational marijuana. In fact, the November 2020 election saw residents in South Dakota and Montana enthusiastically approve measures to make adult-use cannabis legal. In addition to its neighboring states, North Dakota is also bordered in the north by Canada, where cannabis has been legal for both recreational and medical use since 2018.

Contact Scythian Cannabis Real Estate Today

Scythian Real Estate is a privately held cannabis real estate fund that works with some of the largest and most sophisticated cannabis operators in the country, including Grassroots Cannabis (Curaleaf) in North Dakota. If you are a cannabis operator interested in learning more about Scythian, send us an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

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.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.