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Speaker 1: This is Bloombird Law with June Brusso from Bloomberg Radio.

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Speaker 1: I think just moving forward from the things that were

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Speaker 1: unfortunate in the year is the best way to uh

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Speaker 1: respond to it. That was Chief Justice John Robert's response

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Speaker 1: to last term, one of the most tumultuous in the

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Speaker 1: Supreme Court's history. It included the unprecedented leak of the

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Speaker 1: draft opinion that ultimately overturned the constitutional right to abortion,

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Speaker 1: ethical scandals, protest after protest, criticism of the Court by

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Speaker 1: some of the justices themselves, and public confidence in the

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Speaker 1: Court sinking to an all time low. Speaking at the

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Speaker 1: Ten Circuits conference in September, the Chief Justice said he

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Speaker 1: did have one concern that the criticism of controversial opinions

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Speaker 1: was wrongly calling into question the legitimacy of the Court.

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Speaker 1: I don't understand the action between opinions that people disagree

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Speaker 1: with and the legitimacy of the Court. If the Court

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Speaker 1: doesn't retain its legitimate function of interpreting the Constitution, I'm

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Speaker 1: not sure who would. But oddly, the Chief Justice didn't

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Speaker 1: mention any concerns or controversies in his year end report

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Speaker 1: on the Federal Judiciary. Its blandness was a stark contrast

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Speaker 1: to the year at the Court. My guest his constitutional

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Speaker 1: law experts, Steven Vladik, a professor at the University of

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Speaker 1: Texas Law School. He wrote about the chief's report in

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Speaker 1: his weekly newsletter on the Court called one First, this

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Speaker 1: report was most remarkable for what it didn't say about

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Speaker 1: two being this tumultuous year at the Court. Yeah, I

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Speaker 1: think that's try it. You know. The year end report,

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Speaker 1: at least as it was originally conceived by Chief Actors

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Speaker 1: Warren Burger, was meant to be a bit more of

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Speaker 1: a sober and transparent reflection on not necessarily individual decisions June,

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Speaker 1: but on the work of the Court and on places

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Speaker 1: where the Court, specifically in the federal courts in general,

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Speaker 1: could benefit from potential legislative reforms. And I think what

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Speaker 1: we saw in this year's report, which has been true

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Speaker 1: I think for most of Huffis robertss Er end reports,

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Speaker 1: is really very little of that. No reflection on where

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Speaker 1: the Court is as an institution, no reflection on potential

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Speaker 1: places where changes might benefit the judiciary. Really just not

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Speaker 1: much more than an anecdote. And thank you to Congress

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Speaker 1: for legislation that already passed about judicial security. It seems

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Speaker 1: odd to me that he opened with the historical event

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Speaker 1: about the judge who presided over efforts to desegregate Little

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Speaker 1: Rock Central High School. And maybe I'm reading too much

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Speaker 1: into this, but he's using that at a time when

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Speaker 1: the court is considering doing away with affirmative action, and

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Speaker 1: it just strikes me as ironic. Um ironically is one

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Speaker 1: word for it. Sort of off ear at least time

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Speaker 1: that be another. I mean, it's pretty typical for two

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Speaker 1: Suss Roberts to have some kind of terrible that is

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Speaker 1: sort of the mostief for his year end report. I

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Speaker 1: think it's interesting that the one he chose this year

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Speaker 1: about Judge Davis and his efforts to de saturgate the

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Speaker 1: Little Rock schools. From the way Roberts pitched it was

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Speaker 1: about judicial courage and about the ability and the responsibility

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Speaker 1: of federal judges too. As he put it, stand up

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Speaker 1: to the mob. But which mob is he worried about?

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Speaker 1: This is why it's such an interesting and sort of

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Speaker 1: strange message to choose to send at the end of

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Speaker 1: a year. From his perspective, is the mob, you know,

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Speaker 1: the large, aggressive reaction to decisions like stob and Bruin

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Speaker 1: and West Virginiverse t A is the mobs actually the

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Speaker 1: sort of the far right and its efforts to overturn

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Speaker 1: the election. And so I think part of what's exasperating

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Speaker 1: about reports like these is that, you know, there's lots

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Speaker 1: of subtexts, but what the subtext is is it self

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Speaker 1: subjective and can mean different thans different readers, as opposed

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Speaker 1: to what Chief Justice Berber had originally intended, which is

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Speaker 1: not sub tech but actually context and you know, advancing

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Speaker 1: a conversation with the other branches about how to improve

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Speaker 1: judicial administration and judicial decision make there and that's just

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Speaker 1: not what the report has become in this year, I

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Speaker 1: think is really another good example of that. And you

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Speaker 1: point out that Chief Justice Rendquist actually made front page

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Speaker 1: headlines in with his year end report, which is hard

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Speaker 1: to imagine nowadays. Yeah, it's it's a fascinating thing to

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Speaker 1: look back on. So this was at the end of

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Speaker 1: Chief Sefi Rendquists used his year end report really to

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Speaker 1: excoriate Republican controlled Senate, which had basically stopped even holding

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Speaker 1: hearings on and holding votes on a number of President

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Speaker 1: Bill Clinton's judicial nominees and even though you know, the

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Speaker 1: politics of this seems sort of odd, right Renkliss was

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Speaker 1: a died in the world, conservative Republican. I think that

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Speaker 1: was actually a really good example of what this report

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Speaker 1: could be and should be, which is the Chief Justice

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Speaker 1: of the United States actually criticized the members of his

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Speaker 1: own party in the political branches for acting in a

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Speaker 1: way that, from his perspective, was undermine as the judiciary.

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Speaker 1: It was fun page news. It had an impact. The

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Speaker 1: lob jam for Clinton's nominees actually breaks later in and

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Speaker 1: I think that tune is exactly what the report could

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Speaker 1: be and hasn't been, which is the Chief Justice actually

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Speaker 1: standing up for the judiciary as opposed to the Chief

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Speaker 1: Justice sort of, you know, just modestly thanking Congress as

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Speaker 1: if it's Oliver Twist absent for more food. And it

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Speaker 1: was Chief Justice John Roberts who changed the nature of

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Speaker 1: these reports. Yeah, so, I mean, you know, his first

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Speaker 1: couple of terms to Justice, Roberts largely followed in the

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Speaker 1: footsteps of Touchice Rent Quest, but starting with his two

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Speaker 1: thousand and nine reports, he really moved away from this

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Speaker 1: model of you know, identifying areas for reform, identifying the

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Speaker 1: poential problems that Congress might help fix the two thousand

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Speaker 1: nine reports. The substance of it is less than a

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Speaker 1: page long, and you know, that's been really the vibe

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Speaker 1: for each of the last or two years. June last

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Speaker 1: year's report, which I actually think might be the most

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Speaker 1: remarkable in the series of actually identify three major issues

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Speaker 1: that were screaming out for a congressional reform and says,

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Speaker 1: don't worry, We've got this. So, you know, I think

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Speaker 1: part of the concern here is whatever one's politics and

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Speaker 1: whatever one thinks of the courts, you know, with respect

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Speaker 1: to its stuff in the decision making, what the chief

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Speaker 1: justices approach to these reports really bespeaks is a kind

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Speaker 1: of judicial insularity that I think is not remotely healthy

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Speaker 1: for you know, the separation of powers in general, and

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Speaker 1: for the relationship between the courts and the political branches specifically.

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Speaker 1: That was sort of my next question. Does the report

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Speaker 1: echo the way Roberts views the role of the Court

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Speaker 1: and the other branches? You know, the court is separate.

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Speaker 1: I think it surely does, and I think that's a problem.

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Speaker 1: You know, we should not think of the Supreme Court

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Speaker 1: as above and apart from the separation of powers in

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Speaker 1: our federal system is an integral player in the separation

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Speaker 1: of powers, and so, you know, I think it's no

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Speaker 1: doubt a fair summary of both this year's report and

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Speaker 1: most of the Chief Justice's last thirteen that they reflect

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Speaker 1: as kind of we are over here on our own,

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Speaker 1: leave us alone will be fine, mentality that I actually

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Speaker 1: think is really really problematic in the long term for

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Speaker 1: the institutional health of the judiciary, for public perception of

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Speaker 1: the legitimacy of judiciary, and you know, for the reality

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Speaker 1: that even though we don't want the course to be partisan,

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Speaker 1: it's inevitable that they are, at least to some degree political.

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Speaker 1: And the more we try to pretend that isn't true,

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Speaker 1: I think, the more we are spending a fiction about

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Speaker 1: what judges do. What was glaringly missing there was no

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Speaker 1: mention of the leak of the draft opinion in the

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Speaker 1: Job's case and the investigation that Roberts had ordered into

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Speaker 1: the lead more than seven months ago. I thought, I'm

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Speaker 1: not supprised there's no mention of it in the report.

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Speaker 1: I'm a little supprised as to the mention of it

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Speaker 1: anywhere else for that matter. But I think June it's

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Speaker 1: a symptom of this broader disease, which is that there

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Speaker 1: are pretty significant issues affecting the Supreme Court that are

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Speaker 1: unrelated to the substance of specific decisions, and by not

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Speaker 1: engaging with those issues, by not addressing those issues, what

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Speaker 1: the Urine report does is it says one or two things.

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Speaker 1: It's true, either the Chief Justice doesn't agree that these

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Speaker 1: are serious issues worthy of conversation and studies, or you know,

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Speaker 1: he agrees that they're serious issues, but he doesn't think

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Speaker 1: that the political branches should have any role in discussing

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Speaker 1: or responding to them. And you know, dude, I don't

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Speaker 1: know which of those two things is an accurate description

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Speaker 1: of where the Chief Justice is. I think they're both

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Speaker 1: problematic in separate, but you know, equally important respects. Steve

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Speaker 1: always likes to separate the Supreme Court from the political branches,

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Speaker 1: the Supreme Court from politics, and yet you have a

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Speaker 1: court that seems to be more entwined with politics than

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Speaker 1: ever before. You had Justice Thomas's wife, Jenny Thomas, being

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Speaker 1: called to Capitol Hill to testify before the January six committee.

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Speaker 1: You had the New York Times report that Jealice Alito

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Speaker 1: had leaked a prior opinion to Conservative interests, which Alito

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Speaker 1: of course denied. Well, not only that, you know, and

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Speaker 1: this is not just about the Conservatives twenty two alone,

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Speaker 1: three different justices. I think it was Thomas and Jackson

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Speaker 1: had to amend prior financial disclosure because of omissions, in

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Speaker 1: some cases pretty serious omissions about income from prior years.

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Speaker 1: That's a big deal that ought to bother all of us,

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Speaker 1: right the extent to whist the Supreme Court is still

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Speaker 1: not bound by the same ethics code that binds every

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Speaker 1: other federal judge in the country. That's a big deal,

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Speaker 1: especially with all of the Jenny Thomas stuff that's out

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Speaker 1: in the ether. And so you know, folks are going

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Speaker 1: to disagree about which of these issues is most important.

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Speaker 1: I just don't know how anyone can look at the

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Speaker 1: Supreme Court and say everything is, you know, hunky dory

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Speaker 1: at one First Street. And you know, my concern is

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Speaker 1: that the more that the year end report leaves folks

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Speaker 1: with that impression when we all know it's not true,

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Speaker 1: I think the more useless that report becomes. But worse

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Speaker 1: than that, the more it actually perpetuates this narrative that

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Speaker 1: the Court just can't be bothered to recognize that you

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Speaker 1: know something is rotten in Denmark. Well, don't you think

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Speaker 1: the Chief Justice since has been working to make this

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Speaker 1: report something of no consequence to anyone? I mean, who

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Speaker 1: really waits for the Chief justice Is report to come out?

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Speaker 1: I think that's exactly right. And the answer to your

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Speaker 1: question is the Supreme Court Press Court waits for the

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Speaker 1: report to come out, right, And I think yeah, he

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Speaker 1: has tried very hard to make the report something of

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Speaker 1: no consequence, even as the procedural and ethical and logistical

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Speaker 1: challenges faith saying in the Supreme Court and basically the

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Speaker 1: entire Settle Judiciary have only amounted. And that, to me

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Speaker 1: is a disconnect that ought to be trouble and even

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Speaker 1: to folks who are generally sympathetic to where the Court

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Speaker 1: is on the merge. I mean, keep in mind, June,

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Speaker 1: this is not the Chief Justice Year and Report on

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Speaker 1: the Supreme Court. It's this year and Report on the

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Speaker 1: Federal Judiciary. And you know, the notion that in three

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Speaker 1: and a half pages of mostly empty blather and anecdotes,

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Speaker 1: the Chief Justice has fully conveyed all of the challenges

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Speaker 1: based on the entire Settle Judiciary is frankly, I think

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Speaker 1: laughable on its face. The closest Roberts came to addressing

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Speaker 1: the criticism of the court's controversial decisions was when he said, quote,

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Speaker 1: judicial opinions speak for themselves, and there is no obligation

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Speaker 1: in our free country to agree with them, basically saying,

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Speaker 1: so public you get everything you need to know by

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Speaker 1: reading our opinions, and we don't need to explain ourselves

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Speaker 1: beyond that. There's no universe in which we would look

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Speaker 1: at any other institution and say that the only relevant

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Speaker 1: conversation involves the ultimate work product it produces. Right, we

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Speaker 1: would never say that the only thing we're talking about

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Speaker 1: when it comes to Congress is the actual legislation that

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Speaker 1: actually passes, as opposed to like the mechanics, the internal processes,

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Speaker 1: you know, the ethics. And so I guess what this

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Speaker 1: really does is it just perpetuates this idea that when

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Speaker 1: it comes to public discussion of and political branch involvement

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Speaker 1: in the work of the federal judiciary, nothing matters except

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Speaker 1: the decision. And that's the mentality that I think is

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Speaker 1: really myopic. It's not one that has been the sort

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Speaker 1: of historical characterization of how we've approached these questions. And

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Speaker 1: I think it's one that really obvious gates would are

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Speaker 1: I think some undeniable June non substantive problem with the

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Speaker 1: nature of the Supreme Court and the federal courts today,

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Speaker 1: large problems that bamically I think there might even be

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Speaker 1: some consensus about six things if we could actually have

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Speaker 1: the conversation in ways that we're honest and transparent. And

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Speaker 1: a report like this says nothing to further that. Steve,

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Speaker 1: I'm beginning to think we are not going to find

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Speaker 1: out where the lead came from, not because they haven't

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Speaker 1: found out, but that they're just not going to tell us.

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Speaker 1: You would ask me, Gosh, last July, I think I

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Speaker 1: would have predicted this exact inimab right. I mean, this

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Speaker 1: always had all of the hallmarks of a you know,

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Speaker 1: don't worry, trust us, We've got us under control, and

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Speaker 1: we can think of reasons why we're never going to

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Speaker 1: find out. Perhaps the Chief Justice did not like the

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Speaker 1: answer when they figured out who the leaker was. Perhaps

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Speaker 1: they really haven't figured out who the leaker was. I mean,

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Speaker 1: whatever it is, you know, I think anyone who thought

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Speaker 1: this was going to be some big public thing I

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Speaker 1: think didn't fully appreciate how little it is in the

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Speaker 1: Supreme Court's interest to perpetuate the conversation about leaks and

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Speaker 1: its internal decision making processes. Always a pleasure, Steve. Thank you.

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Speaker 1: That's Professor Stephen Vladdock of the University of Texas Law School.

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Speaker 1: You can subscribe to his weekly newsletter on the Court

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Speaker 1: by going to Steve Laddock dot sub stack dot com.

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Speaker 1: You're listening to Bloomberg. Nearly two years after New York

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Speaker 1: legalized recreational marijuana, New York City's first legal retail weed

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Speaker 1: shop opened its stores to the public in Lower Manhattan

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Speaker 1: on December twenty nine at Housing Works, a nonprofit that

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Speaker 1: helps New York's homeless and HIV positive population. Eventure will

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Speaker 1: be a key test of New York's highly regulated adult

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Speaker 1: use marijuana industry, which will face legal and illegal competition,

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Speaker 1: supply chain challenges, and high taxes. Joining me is Jason Little,

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Speaker 1: who heads the cannabis practice team at Farrell Fritz is

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Speaker 1: New York New York's law new York's regiment. Is it

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Speaker 1: highly regulated compared to other states? Is it similar to

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Speaker 1: other states? New York's law is highly regulated um as

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Speaker 1: our other states, and New Jersey is highly regulated. Massachusetts

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Speaker 1: is highly regulated. California and Coloradom are highly regulated. The

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Speaker 1: material difference with New York's law as opposed to the

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Speaker 1: others I just mentioned is that New York built in

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Speaker 1: an element of social equity in the licensing process, and

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Speaker 1: they decentralized the ability to run all of the different

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Speaker 1: types of practice. So there's no vertical integration in New York,

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Speaker 1: meaning that if you hold a retail license, as a

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Speaker 1: general matter, you can't hold a cultivating license, and as

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Speaker 1: a general matter, you can't hold a distributorship license. So

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Speaker 1: you can't have one entity that runs all of the

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Speaker 1: different phases and aspects of the cannabis business in New York.

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Speaker 1: And that differentiates New York and it also makes a

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Speaker 1: little bit more difficult to get it off the ground.

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Speaker 1: So now in New York there's this preference for justice

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Speaker 1: involved individuals in giving out licenses. What does that mean? Well,

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Speaker 1: what that means on the front end, and one of

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Speaker 1: the policies behind MERTA, the Marijuana Regulation and Taxation Act,

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Speaker 1: was to a decriminalize marijuana and cannabis in the state

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Speaker 1: of New York and to bring in some of the

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Speaker 1: folks that have been net stavely affected by that and

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Speaker 1: to give them opportunities business opportunities within this new law,

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Speaker 1: and that's what that is aimed to do. So there's

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Speaker 1: two problems of it, really, right, you have to be

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Speaker 1: justice involved individual, which means you have to have a

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Speaker 1: criminal conviction in the state of New York for a

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Speaker 1: marijuana or cannabis related crime. The second element of that

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Speaker 1: is you have to have some sort of business background

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Speaker 1: and you have to be able to prove that business

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Speaker 1: background to New York to be able to get one

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Speaker 1: of these initials what they call coard licenses. Do they

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Speaker 1: have a lot of applications and how is the processing going? Well,

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Speaker 1: they had I believe, over nine hundred but under a

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Speaker 1: thousand Coward applicants, which is pretty good. They issue thirty

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Speaker 1: six Couard licenses I believe in November, and those are

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Speaker 1: the first ones that have the ability to get up

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Speaker 1: and running from the dispensary side. And that's just the

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Speaker 1: retail dispensary side. So there's other different types of licenses

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Speaker 1: that that don't follow that same pattern with Coward, but

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Speaker 1: right now there's thirty six I believe Coard licensees, all

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Speaker 1: of whom our justice involved or non for profits that

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Speaker 1: provides services to justice involved individuals. So what do they

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Speaker 1: have to have they apply for this, Do they have

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Speaker 1: to have least space? I mean, how does it work?

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Speaker 1: That's one of the headlines now. So the initial plan

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Speaker 1: was that they would not have to have least space,

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Speaker 1: but that the State of New York would provide through

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Speaker 1: the Office of Cannabis Management, would provide essentially turn key

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Speaker 1: spaces for these initial retail dispensaries and the applicants that

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Speaker 1: were successful getting those initial licenses. That has not happened

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Speaker 1: for a couple of reasons, and without getting into the

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Speaker 1: politics of it, they're not funded and they're just not ready.

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Speaker 1: So in an effort to get the business actually kick

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Speaker 1: started as we move into this new year, Office of

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Speaker 1: Cannabis Management lifted that requirement. So the first of the

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Speaker 1: dispensaries opened on the twenty ninth of December in the

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Speaker 1: East Village in Manhattan Housing Works. And I'm fairly confident

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Speaker 1: that they are in one of their own spaces from

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Speaker 1: a practical standpoint, and you know, and what I tell

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Speaker 1: some of our Pharaoh Fritz clients that have engaged in

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Speaker 1: the who are licensing process, you know, as an initial matter,

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Speaker 1: we were asking for the right and the ability to

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Speaker 1: be able to use our own space. We always wanted

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Speaker 1: to do that, and I think, you know, I have

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Speaker 1: a client in particular who I think could be ready

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Speaker 1: and open within two to four weeks if they were

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Speaker 1: granted a license. So I think as we move forward

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Speaker 1: into the new year, into the first couple of months,

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Speaker 1: I think we're going to start seeing those retail stores

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Speaker 1: come online. Office of Cannabis Management is doing a rolling

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Speaker 1: application process. So of those nine something applicants, a bunch

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Speaker 1: of those applicants will actually end up with licenses. They're

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Speaker 1: just going to do them in batches. And they've done

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Speaker 1: that with the call pivation licenses over the last numerous months,

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Speaker 1: so we've seen how that looks with you anywhere from

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Speaker 1: ten to fifteen of them getting approved per Cannabis Meeting

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Speaker 1: each month. So that's that's kind of how that brought

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Speaker 1: that licensing process. Do they have to approve the least

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Speaker 1: space then or the space that you're in? Is that

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Speaker 1: part of the license application process? Here's where I'm going

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Speaker 1: to put it. Yeah, for for our clients in particular, yes,

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Speaker 1: we we had to identify where our least space would be.

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Speaker 1: There was a box to check on the application that

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Speaker 1: permitted you to say, essentially, you are going to use

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Speaker 1: the space provided by the State of New York. I'm

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Speaker 1: not familiar with how Office Cannabis Management is going back

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Speaker 1: to those licensees, but they're probably informally going back to

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Speaker 1: those licensees and asking them if they have their own

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Speaker 1: new space and is so where it is and yes

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Speaker 1: they have to be approved. Your clients, what have they

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Speaker 1: been saying about the licensing process where they've been having

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Speaker 1: difficulties with it. That's actually a good question, June. Uh.

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Speaker 1: You know, I have a cultivator client in particular, and

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Speaker 1: he was one of the first farms to have a

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Speaker 1: sprout in the state of New York and made headlines.

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Speaker 1: He was one of the first folks to get a

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Speaker 1: cultivator license when the conditionals came out. He was a

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Speaker 1: hemp grower when he runs what I like to call

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Speaker 1: a boutique farm, and it worked out pretty well for him.

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Speaker 1: There's issues attendant with that now, but but that licensing

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Speaker 1: process worked pretty smoothly for him. UM. I have processor

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Speaker 1: license licensed clients that have been approved, some have not.

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Speaker 1: Again it's it's went well, just slow. The copard retail

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Speaker 1: dispensary licenses are a little bit slow. I mean they

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Speaker 1: they've taken several months to get off the ground. Um,

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Speaker 1: it looks like they're going in the right direction and

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Speaker 1: rolling now, but I think a whole bunch more of

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Speaker 1: those applicants need to get their licenses and and hopefully

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Speaker 1: sooner than later, so we can get the market off

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Speaker 1: the ground. How many different kinds of licenses are there, Well,

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Speaker 1: the major types of licenses are. There's a cultivation licenses,

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Speaker 1: there's a processing license, there's a delivery license, a distribution license,

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Speaker 1: a retail license, and then I like to call it

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Speaker 1: the craft beer license. It's the only license that allows

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Speaker 1: you to vertically integrate, meaning that you get to essentially grow, process,

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Speaker 1: and sell your own product. But that's in limited quantities.

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Speaker 1: So again, it's not the Miller Light of cannabis. It's

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Speaker 1: the local craft brewery of cannabis. So this has been

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Speaker 1: talked about for so long, but it seems as if

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Speaker 1: sometimes they're making regulations, you know, as they go along.

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Speaker 1: There's a new regulation that allows license holders to begin

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Speaker 1: deliveries of retail cannabis before their storefronts are open for business.

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Speaker 1: So are they doing this sort of as it comes along,

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Speaker 1: a little bit right and a little bit out of necessity. Junes.

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Speaker 1: That's a pretty good question, I think, because it's taken

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Speaker 1: along to get it off the ground, and again for

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Speaker 1: good reasons. In part, New York has placed emphasis on

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Speaker 1: not having a vertically integrated system and allowing people who

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Speaker 1: have been negatively impacted by the criminalization of Marilanda to

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Speaker 1: have an ability to get into this market. By doing that,

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Speaker 1: it's been slow. They've created it from step one and

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Speaker 1: had to have occurred in steps. So I think what

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Speaker 1: they're doing is doing what they can as problems come up.

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Speaker 1: Now we have growers who have cultivated product, we have

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Speaker 1: processors who are taking that product and processing it, but

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Speaker 1: we don't have retail dispensera we have one now, then

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Speaker 1: we don't have the delivery licenses out, so we gotta

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Speaker 1: find ways to get this to consumers. And as a

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Speaker 1: stop gap with respect to the regulations, that's an o

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Speaker 1: CM conditional or temporary regulation. The final regulations are in

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Speaker 1: public comment period right now and that should end relatively

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Speaker 1: soon le so we actually will have final regulations within

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Speaker 1: the next mothers too. So let's talk about the supply

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Speaker 1: chain for cannabis and explain what this seed to sail

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Speaker 1: tracking system is. Well, seed to sail track, let me

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Speaker 1: actually do that from the perspective of one of my clients.

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Speaker 1: So I have a cultivator client and the office cannabis

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Speaker 1: management has the ability to know what they're planning, where

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Speaker 1: they're planning it, when it sprouts, and how they're maintaining

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Speaker 1: that plan right, So that level of of control and

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Speaker 1: it's a it's a reporting obligation that my client has

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Speaker 1: and their subject to inspection um. That same process happens

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Speaker 1: both at the distributorship level, at the delivery level, and

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Speaker 1: at the retail level, so they're able to track and

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Speaker 1: control the quality and the integrity of the product from

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Speaker 1: the seed that's that's purchased to put in the ground

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Speaker 1: all the way to the consumable product that's going to

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Speaker 1: hit retail dispensaries. Under New York's law, cannabis is going

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Speaker 1: to be taxed twice. Cannabis is going to be text twice.

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Speaker 1: It's going to be taxed at the processor level for

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Speaker 1: th HC content, and it's going to be taxed again

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Speaker 1: at the retail level as a sales tax. What's the

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Speaker 1: situation with federal banking rules, the situation is legal entanglement. So,

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Speaker 1: as you surely know June, cannabis remains a Schedule one

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Speaker 1: controlled substance, So theoretically, interstate commerce of cannabis is illegal.

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Speaker 1: Cannabis commerce in general is illegal, and banking, especially with

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Speaker 1: respect to federally chartered banks, it's a risk that a

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Speaker 1: lot of the banks, from an individual standpoint, are deciding

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Speaker 1: not to make local banks, whether state chartered or not.

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Speaker 1: Federal credit unions are probably the most insulated. But it's

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Speaker 1: essentially a cash business because from a matter of law,

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Speaker 1: federally it's illegal. So it's trying to operate as a

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Speaker 1: cash business with limited finance option, which New York State

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Speaker 1: tried to accommodate for with the fund that was going

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00:25:04,800 --> 00:25:07,240
Speaker 1: to have turned key leasis. It's hard to get financing

433
00:25:07,280 --> 00:25:10,159
Speaker 1: for a number of reasons, but most importantly because you

434
00:25:10,160 --> 00:25:12,439
Speaker 1: don't have a lot of banks on board. So what

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00:25:12,520 --> 00:25:16,560
Speaker 1: happened to New York State's effort there? The funds just weren't,

436
00:25:16,600 --> 00:25:19,119
Speaker 1: weren't raced, and at some point I think they will be.

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Speaker 1: Um O c M has said the funds weren't there

438
00:25:21,720 --> 00:25:23,880
Speaker 1: and raised not that they won't be or can't be.

439
00:25:24,080 --> 00:25:26,240
Speaker 1: They're just not right now, and they can't hold this

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00:25:26,280 --> 00:25:30,480
Speaker 1: process up. Tell me about that pending litigation that's preventing

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00:25:30,760 --> 00:25:36,440
Speaker 1: certain areas of the state from issuing licenses. Essentially, and

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00:25:36,760 --> 00:25:40,080
Speaker 1: this is the cliff notes version. There's a group of

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Speaker 1: folks who have sued, and what they have said is

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00:25:44,600 --> 00:25:49,280
Speaker 1: that they're out of state convictions for marijuanda related offenses

445
00:25:49,720 --> 00:25:53,760
Speaker 1: should be considered for core applications, and that essentially it's

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00:25:53,760 --> 00:25:56,520
Speaker 1: illegal for New York to have a regime that makes

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00:25:56,560 --> 00:26:01,000
Speaker 1: only New York residents with New York crimes applicable for

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00:26:01,119 --> 00:26:05,000
Speaker 1: any particular license category. So far, there's been an injunction issued,

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00:26:05,119 --> 00:26:08,480
Speaker 1: and that court has essentially said that those seven regions

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00:26:08,520 --> 00:26:12,560
Speaker 1: are shut down from the application approval process until this

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00:26:12,600 --> 00:26:15,600
Speaker 1: case places through the courts. I believe the state just

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00:26:15,920 --> 00:26:19,000
Speaker 1: appealed that decision, and I don't know the status of

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00:26:19,080 --> 00:26:21,320
Speaker 1: that appeal, but I assume it will be heard on

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Speaker 1: an expedited basis and they'll get a decision as to

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00:26:23,880 --> 00:26:27,679
Speaker 1: whether that injunction will remain, hopefully relatively soon. It just

456
00:26:27,720 --> 00:26:30,640
Speaker 1: seems ironic that people are trying to prove they had

457
00:26:30,680 --> 00:26:34,280
Speaker 1: convictions Ferrell Fritz. You know, we we've handled you know,

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00:26:34,440 --> 00:26:38,040
Speaker 1: some some some real estate matters and and repurposing agricultural

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00:26:38,800 --> 00:26:41,600
Speaker 1: h lands out in Colorado, for instance, some of our

460
00:26:41,640 --> 00:26:46,760
Speaker 1: clients have repurposed agricultural lands in Colorado to grow Canada,

461
00:26:46,840 --> 00:26:49,240
Speaker 1: so we're kind of familiar with that aspect of it.

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Speaker 1: Litigation is going to happen. I think as these businesses

463
00:26:53,320 --> 00:26:56,040
Speaker 1: come online, it's going to happen more and more. Just

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00:26:56,080 --> 00:26:59,640
Speaker 1: as with any very highly regulated industry, you know, you're

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00:26:59,640 --> 00:27:02,320
Speaker 1: going to normal litigation. You're also going to get some

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00:27:02,440 --> 00:27:05,160
Speaker 1: challenges to o CM their authority and how they're doing things.

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Speaker 1: And I don't think that that's some common or should

468
00:27:07,520 --> 00:27:09,600
Speaker 1: be unexpected. It just through a little bit of a

469
00:27:09,600 --> 00:27:13,440
Speaker 1: wrench in the cord process up front, and towns can

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00:27:13,480 --> 00:27:16,639
Speaker 1: opt out of this. Let's just use retail as an example,

471
00:27:16,680 --> 00:27:19,080
Speaker 1: because that's that's that's where this is going to play out.

472
00:27:19,480 --> 00:27:23,200
Speaker 1: The towns. Each town municipality has the ability to opt

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00:27:23,200 --> 00:27:27,400
Speaker 1: in to allowing retail dispensary stop right within their municipality.

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00:27:27,440 --> 00:27:31,360
Speaker 1: If they opt in, then retail dispensaries can operate and

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00:27:31,600 --> 00:27:35,560
Speaker 1: they get the tax revenue their proportion of it. If

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00:27:35,880 --> 00:27:39,720
Speaker 1: they opt out. There's there's a challenge process that the

477
00:27:39,760 --> 00:27:44,840
Speaker 1: applicants can go through. UM, but assuming that they are unsuccessful,

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00:27:45,000 --> 00:27:48,760
Speaker 1: that that tower municipality will not have retail dispensaries. It

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00:27:48,840 --> 00:27:50,880
Speaker 1: also will not share in any of the tax referue.

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Speaker 1: I pointed to dispensaries because that's one example of where

481
00:27:55,720 --> 00:27:59,920
Speaker 1: a town cannot doubt. I have cultivator clients town cannot doubt,

482
00:28:00,400 --> 00:28:03,120
Speaker 1: so they're allowed to grow it on their agricultural land.

483
00:28:03,600 --> 00:28:06,119
Speaker 1: UM because they're not dispenser. I'm sure we're going to

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Speaker 1: hear a lot more about this industry. Thanks so much

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Speaker 1: for being on the show. That's Jason Little, who heads

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Speaker 1: the cannabis practice team at Farrell Fritz. And that's it

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Speaker 1: for this edition of the Bloomberg Law Show. Remember you

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00:28:16,920 --> 00:28:19,400
Speaker 1: can always get the latest legal news on our Bloomberg

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00:28:19,480 --> 00:28:23,080
Speaker 1: Law Podcast. You can find them on Apple Podcasts, Spotify,

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00:28:23,280 --> 00:28:28,280
Speaker 1: and at www dot Bloomberg dot com, Slash podcast Slash Law.

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Speaker 1: I'm June Grosso and you're listening to Bloomberg