Apr 20, 2017
A Slice of the High: Will New York City Really Sit Out the Coming Pot Boom?
On a recent weeknight, a line of people stretched out of the back entrance of a nondescript office building in lower Manhattan and onto its after-hours loading dock. We were waiting, quietly, in single file, for the elevator to take us up to High NY, an advocacy and networking event for people trying to get rich selling weed.
Recreational marijuana is now legal in eight states and the District of Columbia. Meeting the needs of the 60 million Americans living in those states, and any additional ones living in states that may legalize in the near future, is projected to be a $20 billion, totally legal business by 2021, though the reliability of estimates like that are an open question. Insiders like to cite another figure: pot is already a $45 billion industry combining legal and illegal sales, but only around $5 billion of it is fully legal. Usually, when someone cites those figures to you, they leave a pregnant pause at the end inviting you to consider how to get a piece of that remaining $40 billion.
Like any treasure hunt, the weed industry has wide appeal. At High NY, you can find a whole range of investors, entrepreneurs, hucksters, old stoners, and young MBA types, all looking to capitalize on the expansion of the marijuana industry. There was also one guy with an extremely tall Mohawk.
The main complication is that, in New York, weed is still theoretically illegal. Possessing less than 25 grams is supposed to net you $100 fine—the equivalent of a parking ticket. Still, police often find ways to arrest you for pot possession. Governor Cuomo has proposed a complex framework for decriminalizing it throughout the state, and some state legislators have their own legalization bills in Albany, though their success is far from guaranteed. But given New York’s reputation for progressiveness and acquisitiveness, hope at the meeting sprung eternal: Would New York really sit out the coming pot boom? This 4/20, I wanted to take the pulse of the industry here.
High NY drew several hundred people to what they very carefully pointed out was a “non-consumption” event. Instead, the air was think with gossip and rumors. Had I heard that agribusiness giant Monsanto is working on GMO weed? I had not heard that, because it is not true. What about Massachusetts, scheduled to have fully legalized recreational marijuana by 2018? Will pot bus tours be running from midtown to Boston by this time next year? I met a man in his 40s who told me over cans of beer and paper plates of chicken wings that he’d started a successful company producing high-end car-top containers for skis, but now spends his time day-trading marijuana stocks. When I asked him if there are really enough public companies for that, he assured me that there are, “mostly out of Canada.” He was there for research.
Not everyone was this chatty. When I ask another man what brought him out, he eyed me suspiciously for a long moment before saying that he has a “horticultural background.” Then he went back to his food, leaving me to fill in the blanks.
As of now, the most promising legal way for New Yorkers to participate in the industry is through medical marijuana, legalized here in 2014, and greatly expanded in 2016. One of medical marijuana’s unintended consequences is that it is making groups of mildly countercultural people in their 40s a lot more like nursing home patients in their 80s: suddenly, the only topic of conversation is your chronic medical conditions. I heard someone bragging that he had a neurological disorder, and then heard awed gasps from his companion. Later that night, a nurse practitioner, who would be presenting as part of the formal speaking program, reminded everyone that as of that day, the very real but notoriously-easy-to-fake condition of chronic pain qualifies you for a medical marijuana prescription. This got an enthusiastic cheer from the crowd. Her company, Hampton Medi Spa, promises to conduct an evaluation of your fitness for medical marijuana for $200 via videoconference.
This kind of winking, look-the-other-way approach to marijuana is of course old-school by now. California voters first legalized medical marijuana all the way back in 1996, and jokes about being lucky enough to have a condition like glaucoma that earned you a pot prescription were already a little hackneyed by the first season of Weeds, in 2005. As of this writing, 28 states and the District of Columbia have legalized medical marijuana.
Total legalization and commercialization of marijuana are the real focus of today’s marijuana lobbyists. Reasonable people mostly scoffed when current Attorney General Jeff Sessions told the National Association of Attorneys General Winter Meeting, “I’m not sure we’re going to be a better, healthier nation if we have marijuana being sold at every corner grocery store.” It seemed symptomatic of a creaky, out-of-touch worldview.
In fact, that isn’t too far off from the actual goals of many businesspeople and lobbyists. Of course, everything to do with pot is regulated to within an inch of its life, and with a very serious eye to public safety. But isn’t beer sold at every grocery store? Colorado legalized recreational marijuana in 2012, and by 2016 was generating $1.3 billion in sales, and netting the state $200 million in taxes, according to a recent report from the state’s Department of Revenue. Describing the sleek professional world that’s grown up around weed in states where it’s legal, High NY’s Media Director Tim Mattson says simply that it is being “very Starbuck-ized.”
One side effect of this is a series of blandly corporate rhetorical flourishes that have been added to its culture. For one, almost everyone in the marijuana business euphemistically refers to it as “the industry.” We talk about the growth of the industry, the potential market for the industry, and regulations within the industry, but almost never about “selling pot” or “smoking pot” or even really the appeal of pot. This is another one: “marijuana” and “cannabis” are the only acceptable professional terms for a plant with a huge number of aliases; even terms extremely common in larger society, like “pot” or “weed”, are mostly banished within the industry. Mattson had another unique one: He never said that states “legalized” weed, but rather that they “came online.”
There’s also a booming bourgeois aficionado culture around knowledge of different strains of marijuana, similar to the culture around coffee, beer, or wine. Just this week, Lizzie Widdicombe has an in-depth New Yorker profile of Laurie Wolf, “the Martha Stewart of edibles.” I once had an industry insider lament to me that Willie Nelson, stuck in a previous generation’s marijuana consumption habits, shamelessly admitted not knowing the difference between indica and sativa while in the process of promoting his own brand of marijuana. This, to the insider, was a huge faux pas. “That’s insane,” the insider said. “And no one from his team even thinks that’s a big deal.”
Still, with recreational marijuana currently illegal in New York, any weed business is in dangerous territory. This is the reason that investors in New York are mostly working with businesses that are headquartered in states where it’s already legal, or “trying to invest in the side of the market that is not fully dipped into the growing side,” said Mattson, preferring to focus on peripherals, like vape pens.
Back at High NY, the speaking program was extremely varied. Michael Latulippe, a medical marijuana advocate from Massachusetts, gives a simple and heartfelt presentation about the therapeutic value of the drug. Oliver Summers, a Los Angeles-based dispensary owner, described the revelations that led him to open his business.
“You mean we can open a shop and close at 8, and no one can call us at 2 AM looking for an eighth of weed?” he said, to nervous laughter. “I mean, we all started with our courier bags.”
He was followed by two men who definitely did not start with courier bags: Brandon Wyatt and Todd J. Hughes, who billed themselves as being part of the first nationwide cannabis law firm (Hughes also works for NASA). The pair gave a wide-ranging presentation covering various marijuana-related projects they’ve overseen, including a music festival called Dopefest and the Weed for Warriors Project, before closing with actionable tips for people looking to start what they referred to as a “cannabusiness.”
In this last section, the pair invited people from the crowd to come to the front of the room and explain their business ideas to the audience. It began cordially enough, but Wyatt and Hughes followed up with each person, asking them a series of complex technical questions designed to trip them up and (one presumes) show the need to hire them as consultants. They repeatedly and aggressively asked the first two volunteers if they had incorporated as an LLC, and when the third audience member on stage said that she hadn’t, unprompted, they contemptuously asked her if an LLC is even right for her business. Not long after, she pointedly stood up and walked back to her seat.
That woman was Savannah Bundy, a young Brooklyn entrepreneur looking to start a line of topical relief creams containing cannabis. She was less than thrilled with her treatment.
“My friend was like, why are they being so mean to you?” she told me a few days later. “I’m not sure why! The nice one sent me a link to an article the next day. I came away from that a little confused. But it seemed like there were people in the room who were interested and wanted to talk.”
Bundy got interested in the marijuana business in 2015, while living in California, where she began making infused lotions to help her father, who was going through chemotherapy.
“I came back to New York, and I was thinking, well what can I do now that I know how to use different carrier oils?” she said. “I happened to be in a copy shop, making some copies, and I noticed a guy who was printing out a PowerPoint slide show about the industry. How to start businesses in the industry, blasé blasé. And I said, what do you know about topicals?” He invited her to a different weed networking event, Toasty Tuesday, held by the Cannabis Society. And she’s been working on her business seriously ever since.
At the meeting, Bundy had been one of the only people to acknowledge that starting a pot business means buying pot, which is illegal for the moment. When I ask her how worried she is, she thinks for a moment.
“I’d say scale on 1 – 10, probably a strong 4. Lower than 5, knock on wood.” If she were delivering weed, she said, she’d be at a 10. “But walking around with jars of skin cream [seems safer].”
As with many pot-related activities, the High NY meeting started to meander the longer it lasted. During Wyatt and Hughes long presentation, I joined the majority of the crowd in slipping out the back. On my way to the elevator, I was offered some candies containing Cannabidiol (CBD), a non-psychotropic cannabis derivative that’s legal to sell even where pot is illegal. Specifically, they were regular strength caramel apple pie-flavored CBD candies from Cannabinoid Creations. They came in a re-sealable plastic sleeve like you might get with an especially classy nut mix. Across the back in bold letters is their slogan: “We’re CBDifferent.” It was made in Royal Oak, Michigan, not New York.
Collages by Laura Resheske
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