Article by Frederika Easley, Director of Strategic Initiatives, The People’s Ecosystem
New York’s medical cannabis MSOs want in on the adult-use market. The MRTA stipulates they pay an entrance fee. Regulators have yet to settle on the amount of the fee, however the MSOs are balking at the previously floated cost of $20 million.
Given the fluid state of things and in recognition of their leverage, the MSOs are lobbying for an amount that takes into account industry realities and the ability for payments to be gradual.
None of this surprises me. We operate in a capitalist society, where everyone is trying to make a deal.
Do MSOs Deserve Preferential Treatment in New York?
The MSOs believe that the investment they made, by being the first to step into New York’s regulated cannabis space, should afford them some preferential treatment.
Now to be clear, their access to vertical licensure is pretty much exclusive except for the microbusiness license. Not to mention they’ve had over five years to plant their flags, establishing brand recognition and a loyal consumer base.
But all of this is not without cost.
Creating a vertical, seed-to-sale business was not simply an option it was mandated in New York’s medical cannabis laws. In fact, the original five, Bloomfield Industries (acquired by MedMen), Columbia Care, Etain, PharmaCann and Vireo Health, were required to do so within five months, which if you’ve tried to start any business you know that time flies quickly and to expedite progress additional funds are necessary.
And so this idea that the MSOs deserve early access is understandable. I may not agree, specifically from a justice and equity standpoint, but I get it.
Accountability is Everything in This Industry
But then we find stories like this lawsuit against MedMen for refusing to pay rent. MedMen owes close to a million dollars in rental fees on properties that they signed lease agreements for in New York and Chicago and have neglected to make good on.
If MedMen is not following the rules of basic lease agreements, have they also skirted other rules and regulations?- Frederika Easley
MedMen’s position is that because cannabis is still federally illegal they can not judicially be held accountable.
This floored me! I thought well damn the audacity and privilege. Finding real estate for cannabis entrepreneurs is difficult and costly enough. Add to it the additional hurdles Black, LatinX, Indigenous people and women in general are facing. The residual impact of MedMen’s position is dangerous and can be costly.
If MedMen is not following the rules of basic lease agreements, have they also skirted other rules and regulations?
Are MSOs Following the Rules or Not?
Before we tackle timelines and price tags around MSOs accessing New York’s adult-use market, why don’t we first question compliance? Because maybe certain stakeholders should not be allowed to advance based on merit.
Have all of the medical state operators maintained full compliance? Are they currently and have they been since the inception of license receival?
To put it plainly, are they all fully vertical, as required by New York’s medical cannabis laws? Are they all current with tax payments?
If they have received any citations based on physical location compliance checks, have they rectified those issues?
These are important questions that require much-needed conversation and most importantly: action.
To whom much is given much is required and even if you have the money to play, the question is do you deserve it!
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