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Cannabis industry set to face challenging start in New York

Image source: Inc.

Cannabis: The cannabis industry in New York has yet to flourish, but social justice critics say the launch is unlikely to succeed.

A group campaigning for the first licensed marijuana sellers says they are set up to fail.

The news

The Cannabis Social Equity Coalition has revealed that the pioneering sellers must purchase products of “questionable quality and safety” from New York hemp growers.

They also argue that sellers are untrained for the market and risk a mountain of debt.

Under the New York Seed Sales Act, products sold by licensed dispensaries must come from local hemp farmers.

However, the group warned that the “biomass” type of marijuana grown by farmers is unsuitable for smoking.

Cannabis Social Equity Coalition’s Reginald Fluellen said:

“This type of cannabis is considered low grade, best suited for processing into oils, vapes, topicals, and edible cannabis products.”

“It is not suitable as a smokable flower for sale at dispensaries.”

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Product claims

Despite the claims, the state Office of Cannabis Management denies claims that it endorses lousy weed.

“Let’s stick to the facts, and they’re clear,” said Damian Fagon, the OCM’s chief equity officer.

“New York’s first adult-use dispensaries will be selling products grown by New York family farmers that have been tested for a wide array of potentially harmful elements.”

Fagon’s statement referred to the following elements:

  • Heavy metals
  • E-coli
  • Aspergillus
  • Other contaminants aligned with practices in other states

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Training dispute

The Cannabis Social Equity Coalition also says dispensary owners haven’t received the training and incubation support necessary to run the highly regulated businesses.

As a result, companies will likely struggle with high debt levels and “high-interest rates on debt repayment” from day one.

However, the OMC says the claims were a buzzkill.

“These dispensary owners will receive support from the Social Equity Cannabis Investment Fund, breaking down barriers to capital in the complex industry,” said Fagon.

“They’re able to jumpstart the legal market with delivery rates, growing their capital before they open a storefront.”

Damian Fagon also reassured that the owners previously ran successful businesses.

“Jumping to conclusions about the products they will sell and their ability to be successful will only be damaging to them and our effort to establish the most equitable cannabis market in the nation,” he added.

During the public comment process on cannabis regulation, Fagon took a dig at the Cannabis Social Equity Coalition as MIA, saying:

“We look forward to their input on the regulations for most of the remaining market that were advanced by the Cannabis Control Board last month since we didn’t receive comment from them on the regulations for this dispensary program.”


Despite the reassurance, there is no doubt that the program will deal with plenty of challenges.

A recent survey found that there are probably thousands of illegal marijuana businesses.

Most likely, they are operating in bodegas, tobacco shops and other outlets in New York City.

Additionally, many pop-up shops are likely to sell dangerously contaminated weed.

Many of the black market weed sellers pay little or no taxes.

Meanwhile, the 36 state-owned retail operators that received state licenses in November will face a hefty tax.

The tax will make it more challenging for legal operators to compete on price with illegal operators throughout New York.


New York cannabis launch turning into bad trip, social justice critics claim

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