A frank conversation with an anonymous marijuana retail license winner in New York

Earlier this week, I received a call from one of New York’s first-round cannabis retail license winners.

This person had just participated in the Office of Cannabis Management’s presentation on Saturday to all Conditional Adult-Use Retail Dispensary (CAURD) licensees called “Rules of the road – preparing to operate a retail cannabis dispensary.”

After the presentation, they wished to share some concerns without going on the record out of fear their words could jeopardize their relationship with the OCM. NY Cannabis Insider – and most legitimate news organizations – tend to only use anonymous sources in extreme circumstances, such as when there is a threat of physical or financial harm to the subject.

In this case, the threat of financial harm is real, and we’ve agreed to grant anonymity. What follows is a summary of our conversation in their voice. It has been lightly edited for clarity.

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The fund is what I find to be the most appalling thing. It seemed, when we applied for CAURD, that the fund would be like a grant that would later be forgiven to help us start this business so we wouldn’t have to put up money of our own. CAURD recipients – most of them – don’t have a million dollars to start off their own dispensary.

So, ok. If we get an approved site, we could borrow the money from them at 10% interest, and we have to use their designers and their contractors and they’ll renovate it for us and make it turnkey for us with the most modern lighting, etc., which sounds really expensive from the get-go. Then they would charge us 10% interest and that loan is not forgiven. They would essentially own our business. Plus, the lessee would be the fund and we would be the sub-lessee. Let’s say we defaulted on our payments – would they kick us out of our dispensary? We don’t know. Those terms were not made clear.

Related: With DASNY dropping the ball, NYS just changed course on its cannabis retail rollout

They didn’t tell us whether the locations they picked were approved by the county and municipality we’d be in. And for the option to pick our own locations, they just said to let them know where it is and then, if it fulfills all their guidelines, they’ll approve it and all we have to do is send a note to the municipality where we’ll be operating.

Well, no – that’s not how it works.

We already had a delivery location out of (a major city) and I called that city and they said, “no, no, no – you can’t operate a cannabis business out of there. You can only be in a light industrial zone. You can’t just be anywhere in the city.”

So we’re having a hard time even finding a location. And our business has funds. We don’t want any of New York State’s 10% interest funds, where we have to use all their contractors and expensive interior designers, when we could do it ourselves.

I’m a trained professional. I’ve run a multi-million dollar company. But most people who received CAURD licenses may not be so savvy. I’m just saying that offering them something at 10% interest where they’ll be $1 million in debt before they even start operating is not equitable or just in any way. Equitable would’ve been, “Here’s a grant, and if something happens and you can’t pay this back, it’ll be forgiven.”

It just seems insane. We want nothing to do with them. We want to operate our own independent place. But now, I don’t know – if we choose to not take the fund money, will they deny our application for our own space? We’ll see.

Related: Smoke and mirrors: Inside the murky $200M effort to kickstart NY’s marijuana industry

There has been a complete lack of responsiveness from the OCM. I’ve asked them a ton of questions. They haven’t written me a single email in response. They send generic emails that don’t say anything I didn’t know before. It’s just a lack of guidance on all fronts.

The other thing: there is a billboard on every highway in our city for Massachusetts dispensaries. We can’t put up billboards, we can’t put a pot leaf on our logo … with all of these restrictions, how can we possibly compete? Every single thing in the rules discriminates against our product from the get-go. How are we supposed to compete with the illegal market? It doesn’t make any sense.

Plus taxes. The distributor has to pay taxes on the level of THC that’s in the product. So, the cheapest we can get an eighth for is $25, and then we have to 2x or 3x that, plus add tax. How can we possibly compete with Massachusetts when they’re selling an eighth at $35? We might have to charge $80 for an eighth before we make any profit at all. This is being treated in a way that’s so discriminatory towards the product and I don’t understand how we can even compete with the legacy market or our neighbors in Vermont and Massachusetts.

I’ve already gone through the legal system and the War on Drugs in NY, and have been arrested and seen our assets seized and our livelihoods threatened. Now they’re putting us in a position where we’re like college students and we incur $500,000 in debt before we even finish graduation.

I’m just appalled by the state calling something socially just and equitable when just giving us a license is not socially equitable or just. Giving us a license and having us operate at an advantage would be socially just.

A lot of it seems to me like a trap. Like they’re trying to trap us into something that’s quasi-legal. Also, the OCM has given us no guidance on how to open up a bank account. Most banks want $1,000 a month in fees for banking with them. Some of them say they want half a point of 1% on all sales plus a $500 a month fee.

And once we start operating, we can’t just take cash and take it to the bank and deposit it. We have to hire armored guards to pick up our cash and go deposit it into our account. What other retail business does that? Every step of the way it seems insane to me.

Still, we’re just going to follow through because we’ve already invested thousands of dollars, not just for application fee but for our attorney, for our website, etc. But every step of the way it feels like we’re jumping over unnecessary hurdles.

They make it seem like roses but it feels like we’re just stepping into some shit.

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