Legislature proposes spending millions to help legal cannabis industry

New York’s cannabis farmers are pleased with the state Legislature’s one-house budget proposals, which are calling for millions of dollars to be spent on the state’s cannabis industry.

The state Senate and Assembly both included $100,000 for the Cannabis Farmers Alliance in their one-house budgets. The Assembly also allocated a further $5 million to establish an adult-use cannabis and cultivator and microbusiness revolving loan fund and $100,000 for the Cannabis Association of New York. The state Senate allocated $5 million to fund track-and-trace software for cultivators and another $2 million for the Cornell ILR Cannabis Workforce Initiative, while also recommending that a significant amount of future hires at the state Office of Cannabis Management be routed to enforcement. 

Last year, the Cannabis Social Equity Coalition pushed for a $100 million revolving loan fund to help with start-up costs and job training efforts, but that effort didn’t bear fruit in the final budget. Cannabis Farmer Alliance President Joseph Calderone told City & State that growers have taken a more pragmatic approach this year after realizing the realities of the state Legislature, especially since lawmakers must manage a bevy of other complicated issues during budget negotiations. 

“We're going up against housing. We're going up against public schools. We're going up against Medicaid, which runs in the tens of billions and collectively in the hundreds of billions,” Calderone said. “So we represent maybe a half percent of some of those entire budgets, and that's what's realistic because the legislators have a lot on their plate.”

While the whole industry was thrown into turmoil by the bungled rollout of the legal industry, complete with illegal storefronts, a lack of retail licenses and regular lawsuits, Calderone said that cannabis farmers make up the most part of the legal cannabis industry. He said that many have still not financially recovered from being both unable to distribute much of their product (due to the relative lack of legal retail dispensaries) and on the hook for paying the steep potency tax.

Now, they face the additional issue of “cannabis inversion” as illegal cannabis products are trafficked into New York and passed off as legal. It may make little difference to a consumer, but the influx of illegal products negates the benefit of the new retail licenses that OCM has rushed to put out in recent months, while suppressing profits for cannabis cultivators. 

The track-and-trace software, which the state Senate allocated $5 million for, could solve this issue by making it easier for regulators, businesses and consumers to distinguish between fake and authentic state-grown products. Better yet for farmers, the track-and-trace program would be funded by the state, not by growers. If the program makes it into the final state budget and is quickly rolled out by OCM, Calderone said it could help protect farmers’ livelihoods and shield the state from increasing federal scrutiny into the cannabis industry.

“I would not want this state to draw attention to itself from a Justice Department in D.C. that will probably be hostile to New York state,” he did. “And given a good enough reason, they might open some type of investigation into this program.”