WEBVTT - Pot Lots Part 1: Birth of a Marijuana Market 0:00:03.040 --> 0:00:06.240 We're at Washington Square Park on a warm February day. 0:00:06.880 --> 0:00:10.280 Pigeons are cooing, dogs are barking, there's a guy playing piano, 0:00:10.480 --> 0:00:12.760 Lots of people just walking around and. 0:00:12.680 --> 0:00:15.440 Talking, and then there's the weed. Everywhere you look. 0:00:15.480 --> 0:00:17.480 There are small fold up tables that have been set 0:00:17.520 --> 0:00:19.520 up which people are using to sell cannabis. 0:00:19.640 --> 0:00:23.320 There are packets of edibles, flour, pre roll, all being 0:00:23.360 --> 0:00:25.920 sold out in the open, and people are smoking out 0:00:25.960 --> 0:00:28.160 in the open too. There's a couple of n y 0:00:28.240 --> 0:00:30.200 U students that just bought and are smoking on a 0:00:30.240 --> 0:00:30.960 bench right now. 0:00:33.240 --> 0:00:34.680 Yeah, we're seniors. 0:00:34.760 --> 0:00:37.199 So we have John signed up in finance. 0:00:37.240 --> 0:00:38.559 Actually after that. 0:00:38.720 --> 0:00:42.040 Really, so when you first started at YU, was pot 0:00:42.120 --> 0:00:47.479 decriminalized yet, but people weren't, like they weren't selling at 0:00:47.479 --> 0:00:48.440 tables like they are. 0:00:48.640 --> 0:00:50.600 No, it wasn't open, but like I mean here like 0:00:50.640 --> 0:00:51.880 you can always kind. 0:00:51.760 --> 0:00:58.680 Of welcome to pot. 0:00:58.680 --> 0:01:01.080 Lots our deep dive to what's going on with the 0:01:01.160 --> 0:01:04.959 legalized marijuana market in New York. We'll spend three episodes 0:01:05.000 --> 0:01:07.440 exploring what the birth of this market looks like, how 0:01:07.440 --> 0:01:09.480 the business is setting up, and finally, how New York 0:01:09.560 --> 0:01:12.360 is trying to address the social inequities. 0:01:11.680 --> 0:01:14.960 Of the past. It's been a little over three years. 0:01:14.800 --> 0:01:19.399 Since recreational cannabis was decriminalized in the state. Lawmakers legalized 0:01:19.440 --> 0:01:21.920 the drug for adults twenty one and older and expunge 0:01:21.959 --> 0:01:25.040 the records of thousands of people with pot related convictions, 0:01:25.319 --> 0:01:27.640 but there's still some tension between the illicit market for 0:01:27.720 --> 0:01:30.480 weed and the new legal one. New York passed the 0:01:30.560 --> 0:01:32.760 first of its kind law in March twenty twenty one 0:01:32.840 --> 0:01:36.200 to allow people with previous convictions for cannabis related offenses 0:01:36.240 --> 0:01:38.640 to get a foothold in a new legal industry. 0:01:39.040 --> 0:01:41.200 One word, there will be license shops selling. 0:01:40.959 --> 0:01:43.200 Weed, and what New York is trying to do is 0:01:43.319 --> 0:01:46.440 different to places like California and many other states that 0:01:46.480 --> 0:01:50.280 have already legalized recreational pot. The idea is not just 0:01:50.320 --> 0:01:53.760 to go some way towards addressing past social inequities, but 0:01:53.920 --> 0:01:56.720 also to make sure that New York's legal weed landscape 0:01:56.760 --> 0:02:00.560 develops more organically, with lots of small scale growers and 0:02:00.600 --> 0:02:03.600 retailers rather than a few big dominant companies. 0:02:03.960 --> 0:02:05.840 It's a big change for a city that was heavily 0:02:05.880 --> 0:02:08.280 impacted by things like the War on Drugs and stop 0:02:08.320 --> 0:02:11.160 and frisk, But there's still a big question mark about how. 0:02:11.040 --> 0:02:12.960 This new market for legal weed will work. 0:02:13.000 --> 0:02:20.040 Exactly here in Washington Square Park, you could see the 0:02:20.080 --> 0:02:22.919 issue pretty clearly. Weed is supposed to be sold by 0:02:22.960 --> 0:02:25.560 license shops. You have to go to the state to 0:02:25.600 --> 0:02:28.040 apply to open one. But so far there's not much 0:02:28.080 --> 0:02:31.680 appetite to crack down on licensed sellers. No one wants 0:02:31.720 --> 0:02:34.560 to be arresting people for selling weed illegally after the 0:02:34.600 --> 0:02:35.840 state just decriminalized it. 0:02:36.120 --> 0:02:37.840 They can't if you ain't got no ID. 0:02:39.160 --> 0:02:41.000 If you ain't got an ID, you ain't gonna rest you. 0:02:41.080 --> 0:02:43.640 Make sure you know who you are, and then after that. 0:02:43.520 --> 0:02:44.359 They leave you alone. 0:02:44.400 --> 0:02:46.400 But if you got ID, they just run your joint 0:02:46.919 --> 0:02:48.880 and whatever you tell you a pack of believe you know, 0:02:48.880 --> 0:02:51.639 I mean this ain't this ain't killing nobody, baby, Come 0:02:51.639 --> 0:02:52.680 on to that liquor stoes. 0:02:52.760 --> 0:02:55.440 Man, Come on, got you white folks, get bred man, 0:02:55.480 --> 0:02:56.360 let us get some money. 0:02:56.400 --> 0:02:56.560 Man. 0:02:56.800 --> 0:02:59.320 That's one of the cannabis sellers in Washington Square Park. 0:03:00.000 --> 0:03:02.120 Not going to use his real name for obvious reasons, 0:03:02.120 --> 0:03:04.720 so we'll just call him Charlie. Charlie has a small 0:03:04.720 --> 0:03:07.160 fold of table and the selling packets of flour and 0:03:07.240 --> 0:03:09.480 pre roll joints, and we asked him if he ever 0:03:09.520 --> 0:03:11.880 gets in trouble with the police for all that he's doing, 0:03:11.919 --> 0:03:14.919 because selling pot without a license is still legal. 0:03:15.200 --> 0:03:18.160 A by me weed to smoke, man ay by need 0:03:18.160 --> 0:03:20.359 a little weed to smoke to calm down. 0:03:20.240 --> 0:03:21.919 You know, and it ain't a bad thing. 0:03:22.520 --> 0:03:24.359 All of this has left New York in a weird 0:03:24.440 --> 0:03:27.600 gray area. People are excited about a business that they 0:03:27.600 --> 0:03:30.040 think might be worth billions, but there's still a lot 0:03:30.080 --> 0:03:33.280 of uncertainty over how exactly this will all work and 0:03:33.320 --> 0:03:35.840 how much this new market will actually be worth. 0:03:36.280 --> 0:03:38.360 In this special odd Lot series, we're going to be 0:03:38.400 --> 0:03:41.560 taking a closer look at the birth of a new industry. 0:03:42.000 --> 0:03:43.880 And if you walk around this city, you're going to 0:03:43.920 --> 0:03:47.360 see and smell and possibly even participate in the results 0:03:47.360 --> 0:03:48.400 of this new legalization. 0:03:49.040 --> 0:03:51.800 Yeah, that's kind of what happened to Charlie. He says 0:03:51.840 --> 0:03:54.000 he came back to New York after being in Atlanta 0:03:54.040 --> 0:03:56.040 for a few years. He saw what was going on 0:03:56.080 --> 0:03:59.160 in places like Washington Square Park and he jumped right in. 0:04:00.120 --> 0:04:02.360 Over the blunt and I'm walking through here, and i 0:04:02.360 --> 0:04:04.600 haven't been here in a while, and I'm seeing. 0:04:04.320 --> 0:04:08.480 Everybody in this park everybody in the smelling. I'm smelling weed. 0:04:08.920 --> 0:04:11.960 I see police walking around, I see motherfuckers at the 0:04:12.000 --> 0:04:13.280 table hundred facts weed. 0:04:13.320 --> 0:04:18.960 I'm like, hold up, I'm like yo. Nigga's like yeah, 0:04:18.960 --> 0:04:21.840 I'm like, this is real weed. Hell yeah, it's real 0:04:21.880 --> 0:04:24.240 weed on tea. I said, Man, don't play at me. Man, 0:04:24.279 --> 0:04:26.720 I'm sitting my back against the wall. He said, oh, 0:04:26.880 --> 0:04:28.720 I said what, I got to get a license. He said, Man, 0:04:28.760 --> 0:04:30.640 go get a table. Man, get you some weed and 0:04:30.720 --> 0:04:31.360 put it out here. 0:04:31.440 --> 0:04:31.640 Man. 0:04:32.040 --> 0:04:35.200 Took my ass to the Bronx, went to the uh Mo, 0:04:35.400 --> 0:04:38.960 Nigga's dog got me some cash. I went to see 0:04:38.960 --> 0:04:41.400 the birst weed. Motherfucker that I ran. I was going 0:04:41.480 --> 0:04:43.440 to the Bronx. I just happened to run into a 0:04:43.480 --> 0:04:45.120 standard dude that had weed on it. 0:04:45.440 --> 0:04:46.000 I swear to. 0:04:46.000 --> 0:04:49.000 God, I'm like, hey, yo, I wanna buy something. Something 0:04:49.080 --> 0:04:49.479 I want like. 0:04:49.440 --> 0:04:52.880 Two hundred and fifty dollars worth of weed. Brought me some baggage, 0:04:53.120 --> 0:04:55.200 came in and put it in the park and I 0:04:55.240 --> 0:04:58.159 ain't looked back shit. Thanks to me, I'm winning and 0:04:58.240 --> 0:05:00.919 I don't know how long this is gonna lie. So 0:05:01.000 --> 0:05:02.760 that's why I have to take advantage. 0:05:02.960 --> 0:05:04.400 So That's why it's all about. 0:05:04.279 --> 0:05:06.200 Just getting what I gotta get right now. It just 0:05:06.240 --> 0:05:07.320 stat to have my whole. 0:05:07.160 --> 0:05:10.320 Far For Charlie, this is a big win. Charlie's black. 0:05:10.520 --> 0:05:14.039 He's part of a community disproportionately affected by policies like 0:05:14.080 --> 0:05:16.640 stopp and frisk. He spent time in jail and had 0:05:16.680 --> 0:05:19.880 a hard time finding a job afterwards. He lived in shelters. 0:05:20.160 --> 0:05:22.599 But now he says he can make between four hundred 0:05:22.640 --> 0:05:25.480 and fifty and seven hundred dollars a day just by 0:05:25.480 --> 0:05:28.360 selling weed on the street. We asked Charlie if he'd 0:05:28.400 --> 0:05:30.440 ever consider setting up a licensed shop. 0:05:30.920 --> 0:05:33.720 He got down. For all that shit man, all that 0:05:33.839 --> 0:05:35.719 red they work, and all. 0:05:35.680 --> 0:05:40.760 That man, I put these up here, got my little stand, yeah, 0:05:40.760 --> 0:05:41.200 I mean. 0:05:41.240 --> 0:05:44.520 By my little you know, joints wholesale. Put it out 0:05:44.560 --> 0:05:47.440 head and get my pre roll. But ye see my joint. 0:05:47.520 --> 0:05:51.520 I put a stand here, I make my money, and 0:05:51.640 --> 0:05:52.520 I'm good. 0:05:53.880 --> 0:05:56.320 It's great news for him, but maybe not so much 0:05:56.360 --> 0:05:59.040 for anyone who's trying to sell cannabis legally, or for 0:05:59.200 --> 0:06:01.920 municipal government who are hoping to raise money by taxing 0:06:02.000 --> 0:06:02.839 legal weed sales. 0:06:03.080 --> 0:06:05.400 By the way, we ask the New York Police Department 0:06:05.480 --> 0:06:08.919 why they aren't arresting the weed sellers in Washington Square Park, 0:06:09.279 --> 0:06:11.719 And they say that the penal law as it's currently 0:06:11.720 --> 0:06:16.000 written does not provide a penalty for an unlicensed establishment 0:06:16.080 --> 0:06:19.080 that displays cannabis for sale, So the police are kind 0:06:19.080 --> 0:06:22.720 of hamstrung. They can bring what's known as nuisance abatement 0:06:22.800 --> 0:06:26.520 proceedings against some sellers, but it's not really an effective tool, 0:06:26.720 --> 0:06:29.400 given that those types of proceedings can take weeks or 0:06:29.480 --> 0:06:30.360 months to play out. 0:06:30.480 --> 0:06:32.719 So for guys like Charlie, who no longer have to 0:06:32.720 --> 0:06:35.800 worry about getting arrested for selling pot, they're just filling 0:06:35.800 --> 0:06:39.120 a hole in a market. Because despite starting its licensing 0:06:39.160 --> 0:06:41.880 program several months ago, New York has approved just one 0:06:41.960 --> 0:06:46.040 hundred and sixty five retail dispensaries, and those are provisional approvals. 0:06:46.120 --> 0:06:48.760 The vast majority of those shops aren't up been running yet. 0:06:49.080 --> 0:06:52.159 One of New York's first legal pot shops, Housing Works 0:06:52.200 --> 0:06:54.919 Cannabis Company, is just a few blocks from here. Actually 0:06:55.200 --> 0:06:57.320 we're going to talk to them in a later episode, 0:06:57.360 --> 0:07:00.240 but it's worth noting that the first three re tail 0:07:00.320 --> 0:07:03.520 dispensaries to start operating in the city, we're all set 0:07:03.600 --> 0:07:06.320 up within about ten blocks of each other. They're all 0:07:06.360 --> 0:07:10.760 clustered around Washington Square Park and NYU in Manhattan, so 0:07:10.880 --> 0:07:13.520 people in the area have a few options. They can 0:07:13.560 --> 0:07:16.480 go to a license store and get regulated weed, or 0:07:16.520 --> 0:07:18.720 they can shop on the street in places like the 0:07:18.760 --> 0:07:21.720 Park and buy from sellers like Charlie. But that's not 0:07:21.880 --> 0:07:25.440 the case everywhere. A case in point, Almost eighty five 0:07:25.480 --> 0:07:28.760 percent of municipalities in Long Island have opted out of 0:07:28.800 --> 0:07:30.280 allowing dispensaries at all. 0:07:30.560 --> 0:07:33.360 You can't even hit eight wee stores at nine boroughs. 0:07:33.840 --> 0:07:35.520 They say they hit eight wee stores. 0:07:35.400 --> 0:07:38.320 Nine bowls, So I'm like nine bubos, Like, all right, 0:07:38.360 --> 0:07:42.320 if you cat Long Island, you know New cell Yakis 0:07:42.440 --> 0:07:45.800 and Mount Vernon and then a five bowls, I guess 0:07:45.800 --> 0:07:48.680 you got nine. But come on, that's. 0:07:48.000 --> 0:07:50.280 It's it's bullshit. You're breaking that. 0:07:50.480 --> 0:07:52.760 I mean, you running up and taking them people we 0:07:54.920 --> 0:07:56.800 I mean they ain't gonna get no time for it. 0:07:57.120 --> 0:08:02.120 Then what is the vine a point at Goodbye Jeffrey Schultz, 0:08:02.240 --> 0:08:04.920 who just might be the polar opposite of our cannabis 0:08:04.920 --> 0:08:07.960 seller in Washington Square Park. He's a corporate lawyer at 0:08:08.000 --> 0:08:11.040 a firm called Feuerstein Kulik and he's been helping advise 0:08:11.080 --> 0:08:14.440 people that want to open weed dispensaries legally, plus people 0:08:14.480 --> 0:08:16.840 who want to invest in the industry or start bigger 0:08:16.880 --> 0:08:20.720 cannabis companies called multi state operators or MSOs. He points 0:08:20.720 --> 0:08:23.840 out that even after the medical marijuana program, which started 0:08:23.840 --> 0:08:27.160 back in twenty fourteen, doesn't have that many licensed operators 0:08:27.240 --> 0:08:29.800 yet either, despite it being almost ten years old. 0:08:31.720 --> 0:08:32.600 How do you get a license. 0:08:32.720 --> 0:08:34.560 You need to be issued a license from the state, 0:08:34.559 --> 0:08:37.040 whether it's a dull use or medical. Those licenses don't 0:08:37.040 --> 0:08:40.640 come free, and you know, there are exceptions to every rule. 0:08:40.880 --> 0:08:44.520 Every state has a different program. Florida, for example, Let's 0:08:44.520 --> 0:08:47.520 take New York's medical market. New York's medical market, there 0:08:47.559 --> 0:08:50.280 are ten licensed operators in the state of New York 0:08:50.280 --> 0:08:52.400 onto the medical program. Ten that's it for a state 0:08:52.440 --> 0:08:55.200 of nineteen million residents. It's very challenging to get your 0:08:55.240 --> 0:08:57.360 hand on one of those licenses. They've all changed hands 0:08:57.360 --> 0:08:59.560 at some point or are in the process of changing 0:08:59.600 --> 0:09:02.520 hands the moment. Versus a state like Oklahoma, where you 0:09:02.559 --> 0:09:04.160 can show up and if you have a heartbeat and 0:09:04.200 --> 0:09:06.520 I think probably five hundred dollars, you can probably get 0:09:06.520 --> 0:09:10.120 yourself a license. But you walk into two very different 0:09:10.160 --> 0:09:13.199 economic situations and opportunities. In New York, if you're one 0:09:13.200 --> 0:09:16.880 of ten, you're an oligopoly. In Oklahoma, the challenge there 0:09:16.920 --> 0:09:18.600 is and whether you can get the license, is whether 0:09:18.679 --> 0:09:22.280 you can be competitive enough to make money. And that's 0:09:22.360 --> 0:09:25.280 really where it begins. I think what we're seeing as 0:09:25.280 --> 0:09:30.200 the industry matures challenges, particularly for brands and single state 0:09:30.240 --> 0:09:33.720 operators or generally not the large MSOs. 0:09:34.280 --> 0:09:36.760 That's one reason why it's hard to find brands that 0:09:36.800 --> 0:09:40.200 are popular in places like California here in New York 0:09:40.600 --> 0:09:41.600 legally at least. 0:09:41.920 --> 0:09:45.240 Also, New York specifically has written conditions that dictate the 0:09:45.320 --> 0:09:48.199 kind of packaging and branding allowed, and as the rules 0:09:48.320 --> 0:09:51.319 very by state, it's hard to standardize the move into 0:09:51.400 --> 0:09:52.040 other states. 0:09:52.200 --> 0:09:54.600 It's very difficult to build your brand, to build brand 0:09:54.640 --> 0:09:56.760 equity if you're a California brand. When I'm seeing it 0:09:56.760 --> 0:10:00.079 now every day, these California brands want to enter New York. 0:10:00.480 --> 0:10:03.120 They don't have a license yet, they may never get one. 0:10:03.320 --> 0:10:07.640 It's expensive the license itself, the capex required to build 0:10:07.679 --> 0:10:10.920 the manufacturing or cultivation or both the facilities in the 0:10:10.960 --> 0:10:13.839 state of New York or any state. It's capex heavy 0:10:14.080 --> 0:10:15.840 and it could be several years before you see a 0:10:15.840 --> 0:10:16.880 return on that investment. 0:10:17.240 --> 0:10:19.800 But for Jeff, there's no gray market in weed in 0:10:19.800 --> 0:10:23.480 New York. What sellers like Charlie are doing is very illegal. 0:10:25.080 --> 0:10:25.920 Let me be very clear. 0:10:26.000 --> 0:10:29.240 None of those stores that are outside of the medical 0:10:29.280 --> 0:10:32.480 market that you're seeing the bodegas and without naming names, well, 0:10:32.480 --> 0:10:33.040 they're everywhere. 0:10:33.080 --> 0:10:37.760 Quite honestly, there's no loophole. There's no loophole. It is illegal. 0:10:37.920 --> 0:10:39.880 It is illegal at the state level. It is illegal 0:10:39.880 --> 0:10:40.640 at the federal level. 0:10:40.679 --> 0:10:43.559 They're committing federal crimes, they're committing state crimes. 0:10:44.160 --> 0:10:45.240 The loophole is that there is. 0:10:45.240 --> 0:10:49.079 No enforcement today and it is quite honestly scaring away 0:10:49.800 --> 0:10:52.280 a lot of operators, particularly on the retail side. They 0:10:52.320 --> 0:10:55.240 know they don't want to compete with that. Why compete 0:10:55.240 --> 0:10:57.480 with that? And this is a story we've read before. 0:10:57.520 --> 0:11:01.760 This happened in California when we transitioned from Prop to 0:11:01.920 --> 0:11:02.520 fifteen to Prop. 0:11:02.559 --> 0:11:03.640 Sixty four, when we went. 0:11:03.480 --> 0:11:06.079 From medical to adult use. It was a very very 0:11:06.080 --> 0:11:09.040 bumpy ride. And to this day there are thousands of 0:11:09.160 --> 0:11:11.520 unlicensed retaillers in California. 0:11:11.600 --> 0:11:12.840 This is the result. 0:11:12.679 --> 0:11:18.320 Of decriminalizing something without simultaneously regulating it. This delay in 0:11:18.400 --> 0:11:21.080 the program and the rollout of the program is exacerbating 0:11:21.200 --> 0:11:23.079 this problem. 0:11:22.880 --> 0:11:25.400 With a lack of enforcement. It's clear that there's not 0:11:25.480 --> 0:11:28.920 much appetite in today's political environment to lock people up 0:11:29.000 --> 0:11:30.319 for selling weed illegally. 0:11:30.720 --> 0:11:32.520 Not only to not do it, but the optics of 0:11:32.559 --> 0:11:34.960 it are horrific. It appears that no one's really going 0:11:34.960 --> 0:11:38.679 to suffer criminal consequences of operating these stories. It's possible 0:11:38.720 --> 0:11:41.439 that they'll be disqualified eventually from applying for a license, 0:11:41.800 --> 0:11:44.360 but again, I'm not sure that's going to deturn anybody. 0:11:44.800 --> 0:11:48.480 The state made what I would say relatively weak effort 0:11:48.559 --> 0:11:51.319 at attempting to scare people away from doing this. They 0:11:51.360 --> 0:11:55.040 sent out a seasoned desist letter, but that letter had 0:11:55.080 --> 0:11:58.080 no teeth and it was sent to a very small 0:11:58.120 --> 0:12:01.760 fraction of the retailer that are out there that are operating. 0:12:01.800 --> 0:12:05.760 But look, when there are no consequences, really, what's the point. 0:12:06.000 --> 0:12:08.160 As of the date we're recording this episode, the state 0:12:08.200 --> 0:12:11.800 reports having sent out two hundred seasoned desist letters statewide 0:12:11.840 --> 0:12:14.480 and in New York City, the total estimated street value 0:12:14.480 --> 0:12:18.199 of illicit products seesed is ten million dollars. That includes 0:12:18.240 --> 0:12:21.679 over seventy five unlicensed shops and about twenty mobile trucks. 0:12:21.880 --> 0:12:23.679 Why would they stop? Why would anyone do that? 0:12:23.840 --> 0:12:27.400 And I think it's very short sighted to remain or 0:12:27.520 --> 0:12:30.760 move into the non licensed market right now. I suppose 0:12:30.760 --> 0:12:33.480 there's a cash grab opportunity, there's no question about that. 0:12:33.480 --> 0:12:37.000 We all see it. But the cannabis industry will evolve 0:12:37.080 --> 0:12:39.760 much like alcohol did when prohibition ended in the thirties, 0:12:40.240 --> 0:12:43.559 and it took time. It took time for liquor stores 0:12:43.600 --> 0:12:45.800 to pop open. It's going to take time, and it's 0:12:45.840 --> 0:12:47.920 going to take time to shut down the illegal stores. 0:12:48.360 --> 0:12:52.280 I don't foresee that happening until there's a sizeable regulated 0:12:52.320 --> 0:12:55.760 industry that finally has had an off and says it's enough. 0:12:55.800 --> 0:12:59.560 We can't compete, particularly right now when the state is 0:12:59.559 --> 0:13:03.160 about to finance the first one hundred one hundred fifty 0:13:03.200 --> 0:13:05.720 stores their primary competition. 0:13:05.840 --> 0:13:07.400 So the state is going to fund. 0:13:07.640 --> 0:13:11.120 People who they have determined deserve a shot at having 0:13:11.160 --> 0:13:13.880 ownership in this industry, and their biggest competition is the 0:13:13.920 --> 0:13:17.280 illicit stores. So QUERI whether the state is really going 0:13:17.360 --> 0:13:19.360 to let this continue for any period of time. 0:13:19.880 --> 0:13:20.920 I think that's the reason. 0:13:21.000 --> 0:13:23.280 If it's going to end at some point. It's because 0:13:23.320 --> 0:13:25.640 the state is raising money and they're using tax revenue 0:13:25.920 --> 0:13:29.720 to support legal, regulated stores, and they can't have someone 0:13:29.720 --> 0:13:43.640 next door to them selling untaxed legal cannabis from California. 0:13:44.080 --> 0:13:47.120 And when prohibition ended in nineteen thirty three, there wasn't 0:13:47.160 --> 0:13:50.120 any real effort to unwind the criminal charges of the 0:13:50.120 --> 0:13:53.120 past decade. If you've gotten into trouble for bootlegging booze, 0:13:53.160 --> 0:13:53.800 and tough luck. 0:13:54.120 --> 0:13:56.880 This analogy to the end of Prohibition, an era in 0:13:56.920 --> 0:13:59.880 which the United States banned the import, movement and sale 0:14:00.040 --> 0:14:02.720 of alcohol, is one that comes up time and time 0:14:02.760 --> 0:14:06.280 again in our conversations about the legal pot industry, and 0:14:06.320 --> 0:14:08.880 you can kind of see why selling booze in the 0:14:08.960 --> 0:14:11.439 US was illegal for more than a decade and then, 0:14:11.920 --> 0:14:14.600 just like pot, it was suddenly okay again. But there 0:14:14.640 --> 0:14:18.560 are some big differences. First start, prohibition was ended at 0:14:18.559 --> 0:14:22.200 a federal level, although lots of counties and municipalities still 0:14:22.200 --> 0:14:23.360 decided to stay dry. 0:14:23.880 --> 0:14:27.240 What's unusual about New York's legalization of cannabis is the 0:14:27.320 --> 0:14:30.240 social justice component that comes with it. New York is 0:14:30.280 --> 0:14:33.640 reserving licenses to open retail dispensaries for people who've been 0:14:33.680 --> 0:14:37.160 convicted of cannabis related offenses or have been impacted by 0:14:37.160 --> 0:14:41.200 aggressive cannabis related policies like stopping frisk over the years, 0:14:41.280 --> 0:14:41.600 and for. 0:14:41.600 --> 0:14:44.520 People like Jeff Schultz, the existence of the gray market 0:14:44.600 --> 0:14:48.400 in weed, all those sellers in Washington Square Park is 0:14:48.440 --> 0:14:52.000 a pretty big roadblock to creating a thriving legal industry 0:14:52.080 --> 0:14:54.560 that would fulfill those social equity goals. 0:14:56.000 --> 0:14:57.680 I think we need to heal a little bit. It's 0:14:57.720 --> 0:15:00.000 a little bit different than the alcohol industry in the thirties. 0:15:00.360 --> 0:15:05.160 We didn't have this restorative justice layer to an industry 0:15:05.240 --> 0:15:07.800 that was being brought into the light. But we have 0:15:07.840 --> 0:15:10.320 to deal with that as a nation. We have to 0:15:10.360 --> 0:15:12.960 deal with that as operators in this industry, as competitors 0:15:13.000 --> 0:15:16.200 with one another. Until we heal from the War on 0:15:16.280 --> 0:15:18.520 drugs and some of the issues that are very much 0:15:18.760 --> 0:15:21.080 front and center in New York City, I'm not sure 0:15:21.080 --> 0:15:23.120 we're going to see a whole lot of action there, 0:15:23.160 --> 0:15:25.240 but I think once the state realizes that they are 0:15:25.760 --> 0:15:28.120 enabling their largest competitors, it may end. 0:15:29.720 --> 0:15:32.240 There are some other tensions with the gray market as well. 0:15:32.640 --> 0:15:34.760 The weed that you're getting from a licensed shop in 0:15:34.760 --> 0:15:38.320 New York is regulated, but that doesn't necessarily mean that 0:15:38.360 --> 0:15:39.400 it's better quality. 0:15:39.680 --> 0:15:41.600 So even if you can get the capital you need 0:15:41.640 --> 0:15:44.240 to start a retail dispensary, and even if you manage 0:15:44.240 --> 0:15:46.080 to get a license from the State of New York, 0:15:46.400 --> 0:15:48.680 you're still going to be restricted in what you can sell. 0:15:49.080 --> 0:15:51.360 I mean the same way a ton of produce is 0:15:51.440 --> 0:15:55.000 grown in California and not necessarily in New York. It's similar. 0:15:55.120 --> 0:15:58.520 The climate there is in certain parts is more conducive. 0:15:58.840 --> 0:16:02.800 That's Jason Wild, executive chairman at terris End, a multi 0:16:02.800 --> 0:16:06.800 state operator or MSO that cultivates and processes weed in 0:16:06.840 --> 0:16:11.480 places like Pennsylvania, New Jersey, Michigan, and California. He tells 0:16:11.560 --> 0:16:14.200 us that growing cannabis might not be as easy in 0:16:14.240 --> 0:16:17.160 New York as it is say on the West Coast. 0:16:17.360 --> 0:16:20.400 What's more, the illegal sellers, the guys on the street, 0:16:20.840 --> 0:16:24.000 they have a long history of securing product and a 0:16:24.040 --> 0:16:25.720 lot of experience with growing it. 0:16:26.120 --> 0:16:30.240 Like in California, you can get multiple cycles of outdoor product. 0:16:30.480 --> 0:16:32.920 In New York, depending on how far upstate you are, 0:16:33.160 --> 0:16:34.880 you're only going to be able to get one cycle. 0:16:35.160 --> 0:16:37.760 And just on top of that, there's just back to 0:16:38.120 --> 0:16:41.320 talking about experience. There's just so much less experience in 0:16:41.320 --> 0:16:44.680 New York. You can't dial in the quality of your 0:16:44.720 --> 0:16:47.520 cannabis right away in those first two harvests. It takes 0:16:47.600 --> 0:16:50.320 It actually takes years and years. New York has been 0:16:50.680 --> 0:16:54.520 a huge market, a cultural center in terms of delivery, 0:16:54.560 --> 0:16:57.160 guys coming and bringing you stuff in your apartment or whatever. 0:16:57.200 --> 0:16:59.200 Over the years, you know more around New York City, 0:16:59.560 --> 0:17:02.160 but there's been practically no industry in New York of 0:17:02.280 --> 0:17:06.479 cultivators and manufacturers. On the other hand, California, that's been 0:17:06.520 --> 0:17:09.400 a big part of their economy, even when it was illegal, 0:17:09.520 --> 0:17:12.120 and when they passed laws legalizing medical and then wreck 0:17:12.160 --> 0:17:14.719 in California, they were just trying to bring all of 0:17:14.760 --> 0:17:18.080 the illegal growers into the legal framework. But they came 0:17:18.119 --> 0:17:20.680 in knowing how to do this stuff. In New York, 0:17:20.760 --> 0:17:23.439 there's just like no experience on top of all the 0:17:23.440 --> 0:17:25.360 different climate issues and things like that. 0:17:25.600 --> 0:17:28.120 And you're also going to be competing with street sellers 0:17:28.160 --> 0:17:31.679 who've access to everything flower from organic weed farms in 0:17:31.720 --> 0:17:35.520 Florida or the most recognizable brands from California with very 0:17:35.520 --> 0:17:36.240 little overhead. 0:17:36.840 --> 0:17:39.000 That's what the list of market's really good at. I 0:17:39.000 --> 0:17:43.040 guess that branded product and I hear there's counterfeit brands 0:17:43.040 --> 0:17:46.639 in New York City coming in from the West coast. 0:17:47.320 --> 0:17:50.159 Water will find its way through those cracks and the like. 0:17:50.240 --> 0:17:53.840 So if you're buying illicitly in New York and it's 0:17:53.840 --> 0:17:57.600 a branded product, it is definitely not coming from those 0:17:57.920 --> 0:18:02.200 ten medical ros right now registered operators. So how is 0:18:02.200 --> 0:18:05.120 it getting across same as it always has Quite frankly, 0:18:05.359 --> 0:18:08.800 it's being grown maybe out west, being packaged, and it 0:18:08.840 --> 0:18:12.520 could be being packaged in a legal state and then 0:18:12.600 --> 0:18:16.640 being sold off their books out of state. That has happened. 0:18:16.960 --> 0:18:19.360 But at the end of the day, that product you're 0:18:19.359 --> 0:18:22.320 buying might be one hundred percent elicit from where it's grown. 0:18:22.359 --> 0:18:24.119 It might not have had a license to be grown, 0:18:24.200 --> 0:18:27.080 might not having a license to be processed. It certainly 0:18:27.080 --> 0:18:29.200 didn't have a license to get shipped from California to 0:18:29.280 --> 0:18:31.200 New York City. And at the end of the day, 0:18:31.440 --> 0:18:35.280 finds you like when you used to go and find 0:18:35.280 --> 0:18:37.240 your plug and he'd give you a little sandwich bag 0:18:37.320 --> 0:18:41.200 of an eighth Now they just got really fancy sandwich bags. 0:18:41.480 --> 0:18:44.080 That's Craig Wiggins. He used to lead a trio of 0:18:44.119 --> 0:18:47.359 analysts known as the Cannalysts Joe and I actually spoke 0:18:47.359 --> 0:18:49.879 to him on the podcast back in twenty nineteen, but 0:18:50.080 --> 0:18:53.679 now four years later, he's wound the cannalysts down, but 0:18:53.760 --> 0:18:56.000 he still keeps a finger on the pulse of the 0:18:56.040 --> 0:18:59.720 cannabis industry. He describes the New York market as basically 0:18:59.760 --> 0:19:00.719 the Wild West. 0:19:01.119 --> 0:19:03.680 They're allowing pretty much everything to go on. There's people 0:19:03.680 --> 0:19:07.080 who've already built their infrastructure who are very effective at 0:19:07.119 --> 0:19:11.960 getting good quality cannabis from California East kind of thing. 0:19:12.400 --> 0:19:15.000