In May 2018, New York City Comptroller Scott M. Stringer released a report saying the state’s adult-use market could create a market worth $3.1 billion. Despite regulatory setbacks, optimism remains high.
On May 8th, LeafLink, one of the most notable wholesale management platforms in the space, hosted a panel at its New York City headquarters. The event was in collaboration with venture capital fund Lerer Hippeau.
Lerer Hippeau Managing Partner Eric Hippeau moderated the panel, which included LeafLink co-founder and CEO Ryan Smith. Others taking part included Vangst CEO and founder Karson Humiston, Green Market Reports founder Debra Borchardt and Vireo Health CEO Ari Hoffnung.
Several areas of the industry were touched upon during the panel. Both New York and the federal system were discussed. Some of the topics discussed included the saturation of brands and how companies can make an impact. Regulations came up several times as well. Meanwhile, equal measures to provide fair access to communities affected most by the War on Drugs and women were regularly mentioned.
The panelists all spoke with The Marijuana Times prior to the event beginning. Hippeau said that, at this time, investing in New York cannabis depends. He explained how Lerer Hippeau currently invests in the state. “We invest in the cannabis infrastructure. We don’t invest in products or brands. That’s a decision that we’ve made in this case until the ban is lifted from the federal government.”
Investing in New York is one thing, but setting up shop is another. Ryan Smith seems to regularly field the question of why have a headquarters in New York City at this time. He responded, “We are a B-to-B wholesale marketplace, really a tech company. When we’re thinking about where the industry is going and you want to open up offices in places where, fast forward five, 10 years, where would a tech company have those offices with the biggest talent pools and the most people to pull from.”
Humiston spoke about the talent pool in New York as well. She addressed how the status of a state’s medical market can indicate jobs in the space, positions that were not available prior to the industry creating them. She cited Stringer’s report, which estimated that adult use could generate 84,000 new jobs in the state. “That’s 84,000 jobs that have just never been there before and now this industry is creating. It’s great.” Humiston noted cultivation, extraction and manufacturing as the largest sectors for opportunity.
For Borchardt and Hoffnung, they have seen the city evolve with cannabis for some time. Borchardt’s experience dealt with Wall Street reporting before making the jump with her own cannabis-specific financial news site.
Despite the progress on Wall Street, she noted that she still faces hurdles covering publicly traded cannabis companies. “In my past as a financial reporter, I would just go to the floor of the stock exchange or Nasdaq and interview companies and do reports and it was no big deal. But now that I have a website that just solely focuses on cannabis financial news, they won’t let me do that.”
Hoffnung’s company, a client of LeafLink’s, has seen the evolution of the state’s medical market since 2014. Vireo now stands poised to transition the company’s physician-led, medical-focused business into an adult-use option as well.
He also noted the significance of LeafLink being in this office. As an avid fan of learning about the history of buildings, he noted how the building housing LeafLink’s headquarters was erected in 1931, just six years prior to the passing of the Marihuana Tax Act of 1937.
Hoffnung also had a positive look at New York’s prospect for adult-use legalization. “We’re going to get there. We’re going to catch up,” he said. “New York is going to make its own mark on the cannabis industry, in the U.S., and globally. And that’s really because we have so much human capital here.”
The status of New York and New Jersey’s adult-use legalization hopes was discussed extensively, as expected. Overall, the consensus appears to be that the two states – and others in the surrounding area – are waiting to see which state will be the next domino to fall. There were some playful debates between the panel and some guests over whether New York or New Jersey would be the first to pass legislation.
Overall, the evening gave off the feeling that New York will legalize adult-use laws in time. The measure could pass by the end of the legislative session, or it may need to wait until next year. A sense of urgency was not felt in the room, but its importance was not lost on anyone in attendance.
Despite the state not passing legislation yet, New York appears to be heading in that direction. As such, Smith summarized the state of cannabis in the state and beyond. “Just the whole public social perception seems to be changing. We’re still behind on the on the east coast, of course, but the west coast precedent is coming.”