Too much government has caused major losses
By Andrew Harris
I don’t want to be the czar of cannabis in New York State, I don’t even think they should have a czar or even the existing Office of Cannabis Management. Despite the hard work by the people in that office, and those who support them, the sheer magnitude of the cannabis market is crushing them.
That has happened in every state where cannabis is legal, to varying degrees. Voters legalize, the state sets up a marketplace via a bureaucracy created to ensure tax revenue as the priority. In general, the lower the tax rate, the more successful the marketplace has functioned. New York, started with a 13% excise tax, and also added on a potency tax, almost a punishment for producing top quality product.
They keep getting it backward.
The priority should have been to establish a thriving market, not to tax and heavily regulate a previously non-existent market. Like most new operations, as they realize healthy growth, they are able to pay more tax. Additionally, these farmers and retailers are small businesses too!! They are the economic engine of our state and national economy, and as an agricultural enterprise, they create JOBS !!
Traditional agriculture in New York is heavily subidized by taxpayers. The cannabis industry, at its inception, is heavily taxed. The playing field is not equal for this new agricultural industry.
In a big picture look at NYS cannabis, the state put the “cart before the horse,” and forced a newborn industry to absorb stifling tax rates and regulation from day one. This runs contrary to capitalism 101 and how our state treats other “new” industries like solar and wind energy, for example. They offer those industries the ability to avoid massive taxes, until they have had time to become profitable. This is standard economic policy for almost all major economic growth in NYS. But not cannabis ?
The results have been predictable. Farmers bankrupt, crops rotting in the field, and a black/grey market that is literally out of control.
With a marketplace in that condition, regulators have announced that 1500 new legal dispensaries are poised to open in the state. How can bankrupt farmers capitalize on that sudden demand in 2024?
They can’t, but the national and international corporate cannabis industry can, creating a huge market advantage over family farms. So much for equity.
Enough complaining, my suggestion is simple. Merge the existing Office of Cannabis Management with the State Liquor Authority. Create the NYS Office of Alcohol, Cannabis, and Psychadelics(because that is coming soon ole’ timer.) Work within an existing government structure that has been in place for decades, which from first hand experience, is pretty effective.
The public concerns are similar and if we can regulate a substance like alcohol in New York State with success, then we can handle a much more benign cannabis. We can allow it to be legally sold at a healthy profit, taxed at a reasonable rate, and integrated into our larger economy. We can create a Renaissance in local agriculture, local farms, and take advantage of our climate. Don’t forget Upstate New York has been considered the “Eastern Emerald Triangle” for decades because our climate is ideal for growing hemp and cannabis of high quality.
To continue down the current path is just another version of “Reefer Madness,” allowing hysteria to cloud our judgement and distract us from common sense policy. We have a great example of how good policy can create new markets, and transform markets in this state.
The secret recipe for success is right under our noses.
The New York State Cannabis industry should be modeled after the New York State Wine industry.
Related reading from 2018 and a quick Google search indicates this isn’t a new idea: https://www.playboy.com/read/a-sommelier-s-guide-to-pairing-weed-with-wine