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New York’s legal cannabis market tries to avoid a bad comedown

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Like any ambitious college graduate, Alex Norman sought his fortune on Wall Street. He then became a drug dealer. Now Norman hopes to bring his experience and insight to New York’s newly legalized cannabis market.

He is one of hundreds who have applied for a license to operate a retail cannabis dispensary. Under a special plan, New York has set aside 150 much-needed licenses for people like Norman, who has had previous cannabis-related legal convictions. To qualify, you must also demonstrate experience running a profitable and legitimate business.

The idea is to share legal benefits cannabis industry With those who bore the brunt of the government’s war on drugs. “We want to meet the persecuted, and I want to say now that you can step into the legal market,” said Trivette, spokesperson for the state’s cannabis regulator. Knowles explained.

As Norman puts it, this is a “curious” development for someone like him, who has spent years working in the shadows of crime, and now finds himself seeking partnerships with the government. rice field. “At this point, I have nothing to hide. Being arrested for cannabis is like a badge of honor.”

New York was the 15th state in the United States to legalize recreational cannabis possession. After getting off to a good start, this year is shaping up to be its pivotal year. emerging marketThe first legal sale of recreational cannabis took place at a newly licensed Manhattan dispensary on December 29th. Elected officials, community leaders and hundreds of jubilant onlookers gathered to witness what might have been the city’s most famous drug deal.

Alex Norman: “Getting arrested for cannabis is like a badge of honor” © Pascal Perich/FT

More pharmacies open throughout the year, selling cannabis vape pens, food, old-fashioned blunts, and more. The state’s existing illicit market is estimated at $5 billion in annual sales. By legalizing it, New York hopes to cut the cost of cannabis-related incarceration while garnering more than $677 million in annual tax revenue.

But just as the cannabis market is plummeting elsewhere, New York is starting to do business. In California and Michigan, for example, overproduction has devastated farmers, with wholesale prices dropping more than 50% from just a few years ago. Due to high taxes in some states, many consumers continue to shop in illegal markets.

“Right now, cannabis is in a recession, if not a recession,” said Jeffrey Hoffman, a cannabis attorney, activist and avid user, expressing concern about New York’s prospects. If you want to succeed, you have to make the legacy market your partner, not your competitor,” he advised.

Axel Bernabe, chief of staff and senior policy officer for the New York State Cannabis Administration, believes the state is learning from the experiences of others and that the legal market will thrive.

“If you give people enough outlets, quality-tested products, and convenience at comparable prices, they can make the transition,” predicted Bernabe, a former antitrust attorney.

People line up to buy cannabis products at the opening of the first legal recreational marijuana dispensary in New York City's East Village on December 29.
People line up to buy cannabis products at the opening of the first legal recreational marijuana dispensary in New York City’s East Village on December 29 © Eduardo Munoz/Reuters

New York is trying to cultivate a strong cannabis market that supports small businesses and local businesses while avoiding a repeat of what happened when it introduced the national lottery in 1980. Work from their longtime Harlem base. “It really created a vacuum there,” Bernabe said.

To keep prices down, states will slow the pace at which licenses for growing, processing and retailing cannabis are introduced. New York has also restricted owners to a single license in hopes of thwarting consolidations that have been rolled out elsewhere.

However, success may also depend on the complex task of getting traditional dealers such as Norman into the legal market.

As Bernabe admitted, drug dealers generally do not trust governments. “They all fear that by admitting they were in a transaction, they would be liable for tax liability,” he said, citing provisions of US tax law.

And, as Hoffman points out, it’s not easy to get a deal with a dealer. “How do you reach out to the legacy market and say send your representative?”

Still, New York State has attempted to initiate discussions through defense attorneys and community groups.It has also created mentoring programs to help dealers run legitimate businesses.

Given his experience, Norman seems like a likely candidate. The son of Cuban immigrants, a corrections officer and hairdresser, grew up in working-class Queens and graduated from Rutgers University in 1995 with degrees in political science and Latin American studies.

“I was going to be a lawyer,” he recalled. Instead, a friend who works on Wall Street got him a job at an over-the-counter brokerage firm (essentially a “boiler room”). He was making hundreds of cold calls a day in hopes of persuading people to buy penny stocks. He passed the Series 7 broker exam and joined Merrill Lynch about 18 months later, working privately with his group of clients.

“Even the day after Thanksgiving, we were wearing suits and ties,” said Norman, recalling the formality of the former office. “We value Wall Street above other industries. You produce. You move on. That’s it.”

In 2003, after the first Internet crash, he left Merrill with plans to use his retirement money to pay for business school. But avid cannabis smokers have taken the time to put together their own marijuana delivery services. It became too advantageous to give up too soon. (“Always on time,” says Norman, revealing the secret to his success).

He started growing his own crops in his basement in Brooklyn. He suspects his neighbors stink into handing him over after his second crop is finished. Norman admitted in 2005 that he was in possession of 10 pounds of marijuana and was put on probation for three years. (Others who apply for a New York special license have spent decades in prison for participating in much larger drug operations).

Since then, Norman, now 50, has developed his own cannabis lifestyle brand. Budegawhile closely monitoring legal markets in states such as California and Colorado.

What does he think New York will be like? Norman predicts that many consumers will remain on the black market. Still, legit pharmacies need to attract customers and enjoy a window of prosperity before the market becomes saturated.

“They will last about three to four years. [the dispensaries] — and gentrifiers who don’t have local hookups…these stores will be profitable. ”

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