Week in Review: NY gov wants adult use, PA/NJ boost medical marijuana business opportunities & Ohio regulators get a bailout

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

New York’s governor wants the state to legalize recreational cannabis ASAP, Pennsylvania and New Jersey take steps to boost medical marijuana business opportunities, and Ohio MMJ regulators get a $2.1 million bailout.

Here’s a closer look at some notable developments in the marijuana industry this week.

NY and the ‘adult-use revolution’ 

New York Gov. Andrew Cuomo hopes to legalize adult-use marijuana in early 2019, a development that would position the Empire State to become one of the nation’s largest recreational markets.

Legalization would put New York on track to be a part of the “adult-use revolution in the eastern United States,” said Jeremy Unruh, director of public and regulatory affairs for PharmaCann, an Illinois-based multistate cannabis company with MMJ operations in New York.

Unruh cited Massachusetts’ adult-use program, New Jersey’s move – albeit stalled for now – to legalize rec, and Pennsylvania Gov. Tom Wolf’s comment on Twitter that the state should “take a serious and honest look at recreational marijuana.”

In New York, Unruh noted, various stakeholders – legislators, union heads, members of minority communities and industry representatives – are discussing how to create a viable, business-friendly industry that balances strict consumer protection laws and prioritizes social equity.

In other words, don’t expect to immediately see a regulatory framework for an adult-use program in New York.

“The governor has been extremely thoughtful about how this program ought to look, and he has solicited input from various interests and encouraged stakeholders to talk to each other,” Unruh said.

“As painful as progress by open-source collaboration sometimes is, it always comes with the best results.”

Based on the state’s heavily regulated MMJ program, Unruh expects to see a similar framework for adult use – think strict consumer protection, third-party testing and packaging and labeling regulations.

Social equity also will be a driving force of the legislation, he said.

“Diversity and inclusion are a primary driver of (the state’s interest in an adult-use program),” Unruh said.

More patients, more permits, more industry

Pennsylvania and New Jersey took steps to open more MMJ dispensaries, the latest sign that the East Coast cannabis market, in particular, is gathering momentum.

While Pennsylvania’s new permits are simply regulators fulfilling what that state’s original 2016 MMJ law intended, New Jersey’s move is a distinct expansion of a system that has been in place since 2010.

Both developments underscore how the cannabis industry is ballooning as patients and doctors continue to realize the medical benefits of marijuana.

That, in turn, is unleashing explosive business opportunities, especially on the East Coast, which traditionally has favored limited MMJ business permits for private enterprise versus state programs with no license caps, as in Colorado and Oregon.

“If you look at the East Coast market, the patient populations are moving at a very fast clip in a number of different markets, much quicker than anybody would have imagined when (many of these state programs) took off,” said Michael Bronstein, co-founder of the American Trade Association for Cannabis and Hemp.

He pointed to Pennsylvania, New Jersey and Florida, yet another state that appears primed to open its doors to more entrepreneurs.

The same has happened in Connecticut and Rhode Island, where demand for MMJ has led state officials to expand the industry’s licensing footprint. Another expansion happened recently in Nevada, where market demand for recreational MJ arguably persuaded the state to nearly double the number of retail cannabis permits.

All that expansion, Bronstein said, is a direct function of more education about MMJ as well as access to the plant.

“I went to a forum last week at a Pennsylvania medical school … and it was doctors talking about using MMJ with their patients. There are research projects that are opening up more,” he said.

In short, the future is “absolutely bright.”

“This is not some far-off, distant thing,” Bronstein said. “In some of these states, a few years ago we barely had functioning medical programs. Two years from now, we’ll probably have functioning adult-use sales in some of these states, in some of the biggest markets in the country.”

Ohio lawsuit bailout

At times, Ohio’s MMJ program has seemed like one step forward, two steps back.

And now comes word that Ohio’s MMJ regulators needed a $2.1 million bailout to cover legal fees related to lawsuits filed by losing applicants for MMJ grower licenses.

Nevertheless, one industry insider believes the lawsuits probably won’t drain the program financially and prevent it from launching.

Thomas Rosenberger, executive director of the National Cannabis Industry Association of Ohio, reckons the problem is more a timing issue.

Regulators expected the market to be up and running in September, with the 12 Level 1 cultivators and 56 dispensaries having paid their government fees and generating money to fund the program.

But only three dispensaries have paid their fees and are ready to open, Rosenberger said. Additionally, only about half the state’s cultivators are operating.

“We are behind in that respect and only about half of that revenue has come in,” he added. “The regulators don’t have that revenue to pay the bills.

“Once the program gets a little farther along and those fees start getting paid, that’s going to be enough to cover those expenses.”

Moreover, the program just awarded its first testing lab a certificate of operation, clearing the last hurdle before MMJ sales can begin. In short, medical cannabis has been grown, harvested and is ready for testing. Dispensaries are ready to open. Let the sales begin.

Bart Schaneman can be reached at barts@mjbizdaily.com

John Schroyer can be reached at johns@mjbizdaily.com

Joey Peña can be reached at joeyp@mjbizdaily.com