The New York Office of Cannabis Management held a Control Board Meeting today that was broadcast online. Two months ago, we provided an update regarding the state’s strong growth in adult-use sales, and this extremely bullish story has become even more bullish. Sales growth is very strong, and the state is on track to do $1 billion in 2024:

John Kagia, Director of Policy, who was sharing the slides with the Board, pointed out that the November strength was overstated due to there being 5 weeks in November after 4 in September and October. He suggested that the $919 million year-to-date would be boosted in December to over $1 billion. The weekly sales have expanded from $12.9 million to $29.0 in six months. Two months ago, it was $22.4 million per week.

Growth is being driven by more stores and fewer unlicensed stores. In our newsletter in July, when we called the New York cannabis market booming, there were 144 open stores. Now there are now 261. This is a huge increase, but it is still a small number of dispensaries given the large population of the state.

Non-flower sales have expanded over the past two months from 52% of sales to 55%, and the medical cannabis companies, most of which are publicly-held, are the source of 23% of the flower sales.

I am very bullish on New York, but they can do a better job on getting the data out. Many states issue monthly updates and include the data on their websites. New York can do better on this front. Still, this big state has come a long way. Investors should be paying attention.

Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

The New York Office of Cannabis Management held a Control Board Meeting today that was broadcast online. Earlier this month, it published an annual report for FY2024, which ended in June, and it shared some data that suggested that September sales fell. In August, sales set a record of $97.4 million, and the annual report shared data for September. The chart suggested that sales were $63.5 million (Figure 1 on Page 9), but it included a footnote that said that the data was as of mid-September. Today’s meeting showed that the full month of September was $84.7 million:

While sales in September did decline by 12% from August, the decline was due to the odd way that the state accounts for sales. John Kagia, Director of Policy, explained during the meeting that September had four weeks, while August had five. He shared several slides, one of which suggested that weekly sales are surging:

The surge since May ties into a stronger effort to close unlicensed dispensaries. Weekly sales have surged 75% since May 25th. We picked up on this three months ago in the NCV weekly newsletter, where we pointed out that New York cannabis was booming.

Three months ago, we reported that there were 144 adult-use stores in the state, and now there are 210. The store growth has been strong both in the NYC and Long Island area, where 94 stores are now open (4 on Long Island), and upstate NY, where there are now 116 open.

In Q3, total adult-use sales reached $250 million and rose 54% sequentially and 357% from a year earlier. The New York market is growing, but it has a lot more room to grow. It is the fourth largest state by population, with about half of the population of California. That state is not exactly booming, but its Q3 total sales were estimated by BDSA to be $1.26 billion, about 5X the level of New York sales. New York is growing strongly, while California sales shrank 1% from a year earlier.

New York continues to offer its consumers a better market, and there are plenty of public companies that are serving it. The public companies dominated the small medical cannabis market, but several are starting to build up their efforts in adult-use. Curaleaf and Green Thumb Industries each operate 3 adult-use stores, while Acreage, Cannabist, Cresco Labs, iAnthus and Vireo don’t operate any yet. MedMen, which is bankrupt no longer operates in the state. Riv Capital owns Etain, and it has 3 adult-use stores now. Pharmacann, which has an investment from Cronos Group, operates 1 too (Verilife).

The Board meeting had other data, including total market share on the production side of 12% for the 9 registered organizations serving the medical program that are currently producing for adult-use. Flower makes up 37% of total sales, while prerolls account for 11%. Non-flower products represent 52%.

I am very bullish on New York, but they can do a better job on getting the data out. Many states issue monthly updates and include the data on their websites. New York can do better on this front. Still, this big state has come a long way. Investors should be paying attention.

Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

You’re reading this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news. We no longer send these by email as we did in the past, but we post this and all of the newsletters on our website here.

Friends,

A year ago, I wrote that the cannabis sector was still in a bear market. Since then, the New Cannabis Ventures Global Cannabis Stock Index has increased slightly, rising 1.2% since 10/6. This is less than what cash earned, and it is a lot less than the rally in the S&P 500. Here is what the action has looked like over the past year:

Our caution was right initially, as the index plunged in October. After that early weakness, our outlook picked up, though we remained cautious. It all depended upon rescheduling in our view, and that was not a done deal. In late April, the market peaked at 11.72. This was when the DEA confirmed that it was going to move to reschedule cannabis, which would wipe out the 280E taxation.

On that spike, we pointed out in early May that it was not a good idea to bet big on cannabis stocks yet. Our bullishness in Q4 and our caution in Q2 have played out well. So, what is a cannabis investor supposed to do now?

We have been a lot more bullish on cannabis stocks, but rescheduling is not yet a done deal. The DEA announced in late August that there will be a hearing on December 2nd. The market crumble that took place made little sense, and it has been stabilizing since then.

As I look to 2025, I continue to believe that the elimination of 280E taxation, if it happens as is expected, should be a catalyst for MSOs, but there are other issues weighing on the market. For instance, we will have  new President. It seems clear that Harris is for reform that could improve the industry, and Trump has been speaking favorably. Of course, the control of the House of Representatives and the Senate could change. I don’t view the federal government as likely to have a big impact on cannabis beyond any changes to the Farm Act of 2018.

Cannabis remains a state-by-state market, and I continue to believe that New York will grow very strongly. Perhaps California will resume its growth too. A state that I worry about is Florida, as voters may not provide the 60% yes votes to legalize for adult-use, which would be horrible, as the state’s medical program is seeing patient growth slow and dispensary growth pick up. Not surprisingly, prices have been going down in Florida. I believe that investors (and some analysts) have an overly optimistic view on the outcome for the stocks if it passes.

Issues at the state level are quite important, but another thing that has been weighing on MSOs has been executive turnover. Among the nine Tier 1 and Tier 2 names, Ascend Wellness, AYR Wellness and Curaleaf have made CEO changes recently.

I continue to believe that cannabis investors should seek opportunities across the market and not exclusively in the sub-sector of MSOs. My model portfolio at 420 Investor has an overweight in MSOs (34% weighting), so I am bullish, but I am also very bullish on some ancillary stocks (28% weighting, which is under the index exposure). I believe that the MSOs will see their businesses improve if 280E gets eliminated, and this should result in more purchases of goods and services that ancillary companies provide. I don’t believe that Canadian LPs will benefit at all from rescheduling, but I do like some of them too (37% weighting in two names).

Above I pointed out that the market is marginally higher than it was a year ago, but perhaps the calendar isn’t the right thing to use. Today is the Jewish New Year (Happy Rosh Hashanah!), and measuring from the 11.11 close in the Global Cannabis Stock Index on 9/15/23, the end of the last Jewish year (5784), the index has dropped 23%.  Let’s all hope that the DEA goes forward with rescheduling soon!

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is what we published this past week:

Exclusives

Cannabis Stocks Move Higher in September

To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.

Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer the Canadian Cannabis LP Index, the American Cannabis Operator Index and the Ancillary Cannabis Index.

View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks.

Stay on top of some of the most important communications from public companies by viewing upcoming cannabis investor earnings conference calls.

Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.

Sincerely,

Alan

Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

You’re reading this week’s edition of the New Cannabis Ventures weekly newsletter, which we have been publishing since October 2015. The newsletter includes unique insight to help our readers stay ahead of the curve as well as links to the week’s most important news. We no longer send these by email as we did in the past, but we post this and all of the newsletters on our website here.

Friends,

This week, we shared the BDSA update on several American cannabis markets for June, including the addition of two states, but we did not include a market that the firm covers, New York. The investment community was very excited about the prospects for companies benefitting from adult-use legalization in the state that was approved in March of 2021. The medical program was launched in 2016, and it has been a big disappointment.

The transition to adult-use has been very tough. I was in NYC in April of 2023 and wanted to go to an adult-use store but did not enter it. There were and still are plenty of unlicensed stores, and the line to get into the adult-use store in Manhattan was too long. For many reasons, New York, which is a big cannabis market, hasn’t yet been a big legal cannabis market in its early years.

The New York Cannabis Control Board hosted a livestream meeting on July 10th, and it shared some slides that indicated how adult-use sales have been going. The minutes of the board meeting aren’t yet published, but the board should post them soon. Unfortunately, the cannabis sales data is not shared on its website, but the presentation included it. New York cannabis sales have been soaring! In June, the state set a record:

On the call, a member of the team pointed out that June was perhaps helped a bit by the month being a five-week month rather than a four-week month, but the surge was phenomenal, up 53% from May and from almost nothing a year earlier. Q2 was reported at $160 million, which was up from just $23 million a year earlier and from $101 million in Q1.

The number of adult-use stores has increased to 144, with about half in NYC and Long Island. New York has over 3X the population of Colorado, but it has only 14% of Colorado’s number of dispensaries. Not only are the number of stores increasing, but enforcement actions against unlicensed retailers have been  stepped up.

Investors should pay attention to this strong growth, as New York is a big state with lots of room for improvement and for growth. It’s not yet clear which stocks might benefit, but there is a lot of opportunity. The medical cannabis program in New York has 40 licenses issued to 10 registered organizations, and this group is dominated by publicly traded companies. Sales, though, are slow in the medical market, and four of these stores are temporarily closed. When I look at the adult-use store list, I see 5 of these with stores. One has two stores, but none of the six stores are in NYC. The medical cannabis registered organizations could open more stores for adult-use, and they also benefit from their cultivation and processing.

Beyond the potential for companies operating in New York, this big improvement could result in more improvements by different states like California. If more enforcement actions and increased licensing works for some states in terms of lowering the sale of illicit cannabis and raising taxes, this could become a trend.

This week’s newsletter is sponsored by PricewaterhouseCoopers Inc.

For more information, please click here.

New Cannabis Ventures publishes curated articles as well as exclusive news. Here is some of the most important content from this week:

Exclusives

Florida Medical Patient Growth Sets Another All-Time Low

Slow Cannabis Sales Growth in Illinois in June

To get real-time updates download our free mobile app for Android or Apple devices, like our Facebook page, or follow Alan on Twitter. Share and discover industry news with like-minded people on the largest cannabis investor and entrepreneur group on LinkedIn.

Use the suite of professionally managed NCV Cannabis Stock Indices to monitor the performance of publicly-traded cannabis companies within the day or over longer time-frames. In addition to the comprehensive Global Cannabis Stock Index, we offer the Canadian Cannabis LP Index, the American Cannabis Operator Index and the Ancillary Cannabis Index.

View the Public Cannabis Company Revenue & Income Tracker, which ranks the top revenue producing cannabis stocks.

Stay on top of some of the most important communications from public companies by viewing upcoming cannabis investor earnings conference calls.

Discover upcoming new listings with the curated Cannabis Stock IPOs and New Issues Tracker.

Sincerely,

Alan

Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

In an announcement last week, Governor Kathy Hochul announced that the state of New York reached a significant milestone: the grand opening of the state’s 100th Conditional Adult-Use Retail Dispensary (CAURD) brick-and-mortar store. 

Big Gas is located in the village of New Paltz, located near Poughkeepsie. The Office of Cannabis Management (OCM) and a handful of state leaders joined Big Gas owners, Kareem Haynesworth and Zymia Lewis for the grand opening of the store for public sales. “Big Gas is proud to be the first licensed cannabis dispensary in the City of New Paltz,” Big Gas Owners Zymia Lewis and Kareem Haynsworth said. “We are here with the support of the New York State Cannabis Investment Fund, who led us to this great location. This is beyond our wildest dreams.”

“We are pleased to be a host community in NYS’s Conditional Adult Use Retail Dispensary program,” said Village of New Paltz Mayor Tim Roger. “This initiative has allowed the state to 1) invest in a private fund to support individuals impacted by the inequitable enforcement of cannabis law and 2) protect public safety with NYS-sourced, regulated, and tested cannabis.”

Hochul applauded this historic milestone for New York’s cannabis industry.

“New York State continues to make progress on standing up a safe and legal cannabis industry for business owners, farmers and residents across the state,” Governor Hochul said. “Today marks a historic milestone in establishing a thriving and equitable industry in our state with the 100th brick-and-mortar store opening.”

New York officials licensed 110 adult-use cannabis retailers including storefronts and temporary delivery-only (TDO) locations across the state, with more anticipated to open soon. It’s a mix of CAURD licensees with storefronts, CAURD licensees providing delivery services, and adult-use dispensaries co-located with existing medical dispensaries. 

New York industry is taking off, reflected by the rapidly growing number of retailers and sales, with total sales exceeding $237 million, $77 million of which was generated in the first two and a half months of 2024. It’s all the signs of a thriving market. The rollout of New York’s cannabis program, however, was hammered by delays caused by lawsuits and the prevalence of illegal cannabis retailers. One such delay was a lawsuit led by Leafly that challenged New York’s ban on third party advertisers for cannabis businesses.

New York places emphasis on social equity measures to ensure that the state’s industry includes communities impacted the most by the criminalization of cannabis.

Despite setbacks, state leaders have been optimistic. Within its first year of operation, New York achieved and surpassed the Social and Economic Equity (SEE) goal laid out in the adult-use law with 60% of licenses given to social and economic equity applicants. Forty percent of social equity licenses are minority-owned businesses and 40% are women-owned businesses, respectively.

The governor’s announcement stated that this also almost doubled the percentage of majority minority-owned cannabis retailers nationwide. As of April 2024, 37% of New York’s adult-use retailers are majority minority-owned as only 19% are majority minority-owned nationwide. 

In addition, 11% of New York’s adult-use retailers were majority Black-owned, while nationally, that number is at just 2%. Approximately 50% of New York’s open dispensaries are minority- and/or women-owned businesses.

Office of Cannabis Management Executive Director Chris Alexander said, “We are incredibly proud of our licensees across New York State who have worked diligently to cross this threshold. Today’s celebration at Big Gas belongs not only to the team who opened their doors to business to eager customers today, but to every single licensee who is building this market from seed to sale. It echoes our commitment to catalyzing growth, fostering diversity, and championing equity within the cannabis sector. This milestone embodies our tireless endeavors to reshape the industry landscape and underscores our resolve to push the boundaries of progress. Supported by the New York Cannabis Social Equity Investment Fund, we take pride in our progress and pledge to persist in our pursuit of inclusivity and advancement of New York’s Cannabis Market.”

“We take great pride in being able to support individuals who have been affected by unjust enforcement of cannabis laws and help them thrive in this emerging industry,” said Social Equity Impact Ventures LLC General Principal of the Fund’s General Partner Lavetta Willis. “Access levels the playing field. We are thrilled for Zymia Lewis and Kareem Haynesworth and wish them great success. We express our heartfelt gratitude to Governor Hochul for leading the way and paving the path to a socially equitable sector that promotes inclusivity and equal opportunities for all.”

Hundreds more retail operations dot the state as licensed businesses compete with the black market.

New York is continuing its slow roll toward expanding the number of cannabis businesses operating throughout the state. On April 12, the New York State Cannabis Control Board (CCB) approved 101 more adult-use cannabis licenses, and now the total number of licenses approved in 2024 so far sits at 403.

Gov. Kathy Hochul continues to be vocal about celebrating these milestones. “With the Cannabis Control Board’s issuance of 101 adult-use cannabis licenses, New York’s legal cannabis industry continues to make significant progress with over 400 licenses issued in 2024,” said Hochul. “Strengthening New York’s equitable cannabis industry and ensuring the hard-working small business owners operating in the legal market have the licenses to open are the best way to protect the integrity of sales in New York.”

The CCB recently approved a resolution that allowed for a diverse, ranging from varying microbusinesses, cultivators, processors, distributors, and retail dispensaries. “This resolution opens pathways for entrepreneurs and businesses to participate in the budding adult-use cannabis market, fostering economic growth and innovation,” the CCB wrote in a press release. This license round includes 25 cultivators, 25 dispensaries, 22 microbusinesses, 11 distributors, 10 provisional dispensaries, and eight processors.

Another resolution was passed, which gives the Office of Cannabis Management (OCM) the ability to issue provisional licenses, which the CCB hopes will speed up the licensing process. “This measure aims to provide provisional license holders with opportunities to begin operations swiftly while adhering to regulatory requirements, fostering a dynamic and competitive marketplace,” the CCB explained.

Now, provisional licenses can be approved by the CCB in regularly scheduled meetings, as well as the OCM, allowing license holders to lock down their retail locations until its time to receive final approval from the CCB. Provisional licenses are granted if the applicant provides all the necessary materials that they would need to apply for a full retail license, with the exception of not yet having a physical store location.

CCB board chair Tremaine Wright praised the passage of the new resolutions, which will help build up the cannabis industry in New York. “These resolutions represent a significant milestone in our efforts to establish a robust and responsible adult-use cannabis market,” Wright said. “By issuing this new batch of licenses, enhancing enforcement protocols, and introducing provisional licensing, we are creating a framework that prioritizes equity, transparency, and public safety.”

OCM executive director Chris Alexander called the move a “crucial step forward” for the 101 new licensees “who have the grit, skill, and ability to make sure our equitable market has the power to deliver the quality cannabis products New Yorkers expect to purchase when they walk into a legal dispensary.”

Earlier this month, a New York State Supreme Court ruling struck down the state’s current ban on third party advertisements. Initially, the ruling invalidated all of New York’s adult-use regulations but was amended to apply only to the state’s rules on marketing.

The lawsuit was led by Leafly Holdings, Stage One Dispensary, and a New York-based consumer. “It’s impossible to overstate the importance of providing consumers with choices, and educational information when making purchasing decisions,” Leafly said in a statement. “It is critically important that licensed retailers have equal access to important advertising and marketing tools to help them succeed in a competitive landscape.”

Individuals such as Sen. Jeremy Cooney (current chair of the Senate cannabis subcommittee) were not as happy about the outcome. “Today’s State Supreme Court decision was another setback in a series of blows New York’s adult-use cannabis market has faced since legalization, three years ago,” said Cooney. “While some changes to marketing regulations are needed, the decision by the Court to throw out all agency regulations will ultimately slow progress at a time when we need to more aggressively combat illicit shops to grow a stronger, more-equitable legal market.”

In late March, the CCB also addressed the needs of struggling cannabis farmers by waiving cultivator license fees for the next two years. Hochul called farmers the “backbone” of the state, and explained the need to support those family farms. “I have made it clear that New York State needs to issue more dispensary licenses and kickstart cannabis sales in New York, and this two-year promise to Adult-Use Conditional Cultivators will make sure these farmers can reap the benefits of this growing industry,” Hochul said.

Previously, cultivators needed to pay a fee when they applied to transition to a non-conditional license (including cultivation and microbusinesses). The fee can be as low as $4,500, and as high as $40,000, depending on the license tier size and canopy size of their grow.

New York’s adult-use cannabis industry was signed into law in March 2021 by former Gov. Andrew Cuomo. While Hochul took office in August 2021, adult-use cannabis sales did not begin until December 2022. In January 2024, Hochul commented on how the rollout of the adult-use cannabis industry was a “disaster,” and in need of review. As of March 18, Hochul announced that her administration would be assessing the current state of industry regulations.

A New York state lawmaker is proposing legislation that would give regulators the authority to revoke the liquor, lottery and tobacco retailer licenses from stores that sell weed without a license. If passed, the legislation would go into effect immediately, giving officials new tools to combat the illicit pot shops that have proliferated since the state legalized adult-use cannabis in 2021.

Democratic Assemblyman John Zaccaro Jr., a Democratic legislator from the Bronx, is the lead sponsor of the legislation in the New York State Assembly. The measure (A09520) has already attracted 70 co-sponsors in the chamber after being introduced late last month. A companion bill in the Senate (S08847), sponsored by Democratic Senator Jamaal T. Bailey, has 10 co-sponsors.

The legislation “Provides for the revocation of licenses to sell cigarettes, tobacco products, alcohol and lottery tickets for the possession or sale of illicit cannabis in violation of the cannabis law,” according to the text of the measure. Businesses caught selling cannabis without a license would be subject to losing their licenses for one year on the first offense. A second offense within three years would subject the businesses to license revocation for three years and a third violation would result in the loss of cigarette, liquor and lottery retailer licenses for five years.

Thousands of Unlicensed Pot Shops in New York City

The legislation was introduced as the state, particularly New York City, continues to deal with thousands of retailers selling cannabis without a license. The office of New York Mayor Eric Adams recently reported that approximately 2,500 unlicensed weed retailers were operating in the city. Meanwhile, a slow rollout of licensed cannabis retailers has seen only about 40 regulated pot shops open in the city since the first began serving customers in the closing days of 2022.

Zaccaro said that the unlicensed shops are “choking” the regulated cannabis market as it struggles to get on its feet. Most of the retailers selling weed without a license are smoke shops and bodegas, businesses that would be severely impacted by the loss of the revenue streams provided by cigarettes, alcohol and lottery tickets.

“We need to be able to go back to our districts and be able to let our constituents and people know that we took this issue seriously,” Zaccaro told the New York Daily News on Wednesday The lawmaker added that he hopes the legislation will pass quickly, either as a stand-alone bill or as part ongoing negotiations for the state budget, which have already exceeded a deadline of April 1.

State and city regulators have already made several attempts to combat the proliferation of unlicensed weed shops with little lasting success. In the New York City Council, local lawmakers are supporting a plan to shut down unlicensed pot shops under a decades-old nuisance abatement law that allows the city to close some businesses, such as brothels. Despite having 26 sponsors on the 51-seat council, however, the plan has not had a hearing.

While Zaccaro’s bill to revoke cigarette, liquor and lottery licenses from shops that sell marijuana without a license gives state and local officials new tools to combat the illicit operators, putting them to use is another matter. Cannabis attorney Fatima Afia said that state regulators at the state Office of Cannabis Management (OCM) will have to commit significant resources to enforcement for the legislation to be effective.

“I imagine that it would require a lot of resources, a lot of time, a lot of energy — basically all the things that OCM has clearly not had for purposes of enforcement up until now,”  Afia said, adding that the slow rollout of regulated cannabis retailers is exacerbating the problem.

“The biggest supporter of the illicit shops is the fact that we don’t have enough licensed entities out there to compete with them,” said Afia.

Zaccaro’s bill has been referred to the Assembly Economic Development Committee, while the Senate version is under consideration by the chamber’s Budget and Revenue Committee.

A New York court ruled in favor of Leafly Holdings and other plaintiffs that the state’s ban on third-party cannabis marketing is unconstitutional, striking down advertising rules, after the ruling initially invalidated all of the state’s adult-use regulations.

Last September, a lawsuit filed by the plaintiffs Leafly Holdings, adult-use retailer Stage One Dispensary, and a customer who uses Leafly to inform her decisions about cannabis purchases challenged New York’s ban on third-party advertisers. Specifically, the plaintiffs sued over rules that banned third-party marketing for cannabis companies—think apps and platforms like Weedmaps and Leafly. Leafly documents over 5,000 cannabis strains and shows their terpene profiles, lineage, and effects among other data that can make choosing a strain safer.

The Office of Cannabis Management (OCM) regulations on non-plant-touching third-party platforms, as is, would essentially block Leafly from doing business in New York. In the lawsuit, Leafly cited several allegedly problematic rules including one that bans retailers from paying for “marketing or promotion through a third-party platform, marketplace, or aggregator that lists cannabis products for sale”; and another that bans licensees from contracting with a “person or entity performing any function or activity directly involving the licensed activities authorized for the license type.” 

State Supreme Court Justice Kevin R. Bryant ruled in favor of the plaintiffs Thursday, declaring that the New York cannabis industry’s rules are arbitrary, capricious, and therefore unconstitutional. Bryant’s April 4 decision invalidates OCM cannabis regulations parts 118-121, 123-125, and 131, saying that the OCM failed to show evidence to justify how the rules were developed.

“We are reviewing the decision and exploring all possible legal options,” a representative of the OCM told High Times Friday morning.

Leafly Holdings, Inc., et. al v. New York State Office of Cannabis Management, et. al reads, “For the foregoing reasons, the petition is granted, and the following sections are hereby declared null and void as arbitrary and capricious; The Third-Party Marketing Ban, Parts 9 N.Y.C.R.R. §§123.10(g)(21) and 124.5(a); the Pricing Ban, 9 N.Y.C.R.R. §124.1(b)(5)(ii) the Third-Party Order Ban, 9 N.Y.C.R.R. §123.10(g)(23); the Third-Party All-Licensee Listing Mandate, 9 N.Y.C.R.R. §124.l(b)(2); and the Third-Party Distributor Listing Mandate, 9 N.Y.C.R.R. §124.l(c)(l)-(2),” Honorable Kevin R. Bryant, J.S.C. Ruled. The original sweeping order appeared to invalidate all of New York’s adult-use rules, however the ruling was quickly clarified to apply only to marketing rules by the end of the day.

Leafly was more than pleased with the news. “It’s impossible to overstate the importance of providing consumers with choices, and educational information when making purchasing decisions,” the company said in a statement. “It is critically important that licensed retailers have equal access to important advertising and marketing tools to help them succeed in a competitive landscape.” Leafly didn’t immediately respond to High Times for comment.

Did the Ruling Invalidate New York’s Cannabis Regulations?

For a few hours on Thursday, the ruling invalidated or appeared to invalidate the whole of New York’s cannabis regulations as it was originally written. Syracuse.com reports that Judge Bryant’s “jaw-dropping decision” applied to the regulations broadly, and it “strikes down all New York recreational cannabis rules.” Chris Roberts for MJBizDaily wrote that the decision could send New York’s into “chaos” as it was unclear if cannabis businesses could be operated without any rules in place, or what else might happen.

Some people were happy to see the rules get tossed. Why? Lawsuits and bureaucratic problems have left New York’s adult-use cannabis market in bedlam. Only about two dozen legal dispensaries are open, as oversupply from farmers stacks up and black market shops step in to fill the void. Even Gov. Kathy Hochul called it a “disaster” so some didn’t exactly shed a tear when it appeared the rules were invalid.

State Sen. Jeremy Cooney, chair of the Senate’s cannabis subcommittee, was among those who quickly slammed the ruling, before the ruling was amended.

“Today’s State Supreme Court decision was another setback in a series of blows New York’s adult-use cannabis market has faced since legalization, three years ago,” he wrote in a statement. “While some changes to marketing regulations are needed, the decision by the Court to throw out all agency regulations will ultimately slow progress at a time when we need to more aggressively combat illicit shops to grow a stronger, more-equitable legal market.”

Fox News reports that the court “dramatically scaled back his order from the previous day that had invalidated most of the state’s cannabis regulations in a case challenging rules for advertising marijuana.”

Now that the court has clarified that the ruling only applies to marketing and advertising rules, it demonstrates how Leafly’s win will open up the doors to third-party companies looking to expand into New York’s market.

Cleo being from Staten Island, which happens to be my hometown, made the assignment even more intriguing. Pair that with the fact that she’s Ice Spice‘s “baddie friend” who’s been by her side in most of the snippets and videos that have stacked up millions of views, this was undoubtedly someone who I had to meet. 

Initially, the first step was to talk to her team. I needed to know what this woman really smokes. Initially, her team led me to believe Cleo was smoking Sprinklez. This is a trend I’m seeing a lot in New York with the youth—they’re leaning towards premium flower with added terpenes. So, I did my due diligence and found her some new flavors of Sprinklez through the homies over at Pressure Paint. I let her team know that I was fully equipped with the bud of choice, and we made plans to get stoned and talk some shit.

Eventually, the game plan turned into a fashion week smoke out. It’s that time of the year in NYC, I’m linking up with Cleotrapa, and we’re going to get baked and hit up some events. Upon arrival at our meetup spot, I hopped in the car, presented her with my acquisition, and she went on to tell me how I was misinformed about her strain preference. Checkmate? I think not! I ended up coming extra prepared and traded her for some buds I had from a beautiful batch of Galactic Runtz courtesy of Wood Wide out of Mendocino and some delicious LA Pop Rocks locally grown by the homies Brooklyn Boys Cannabis Co. She was happy with the gifts, we ended up twisting up some fatties, and inevitably got the car so cloudy that we could barely see anything. Her song “Rockstar” had just dropped, racking up thousands of views in real time, which was why it ultimately became our soundtrack as she proceeded to make social media magic on our way to the event in the passenger seat.

Moments later, we arrive at Belaire‘s NYC headquarters. Cleo has been invited by one of my super-knowledgeable stoner friends, Trinidad James, to get an exclusive look at his Hommewrk line. With just a few clicks on Google you’ll quickly find that Trinidad James is a Grammy-award winner and behind the scenes contributor to some of our favorite artists’ projects. While it wasn’t exactly a smoker’s crowd, Trinidad and I compared rosin pods while he gave Cleo a full tour of his new line, along with some inspirational words. We nearly ended our night there, but I wanted to contribute to this evening’s vibes and give Cleotrapa the entire scope of cannabis in NYC.

Last but not least, I took her over to the beautiful new dispensary in NYC’s Upper East Side, The Herbal Care (THC). THC is one of NYC’s premier legal spaces for cannabis. Overall, it was a lovely affair. Cleo’s energy was infectious as she legally dispensed bud to some of her adoring fans at the counter. At one point, I looked over and noticed THC’s owner, Markel Bababekov, shouting, “Let’s give it up one time for Cleotrapa!” as the legendary photographer, Johnny Nunez, snapped away and the crowd went wild. She officially became a celebrity guest budtender, and pulled it off like an absolute natural.

Furthermore, with fashion week and budtending case study a success, I decided to do my typical move and have my in-person interview back at the Astor Club. Cleotrapa and I already smoked outside, in cars, and she even got a taste of the legal business. So, it’s only right that I show her my favorite under-the-radar club with some of the best cannabis in the country. Taking advantage of one of the best menus I’ve ever experienced, we rolled joints of Maine Trees Blue Lobster, Archive‘s Moonbow, and some delicious Permanent Marker from Marijuantauk Gardens. With a proper sesh in motion, I was finally able to get some questions off to her. 

What can you tell us about the first time you ever smoked cannabis?

[LAUGHS] I was in 7th grade. I went to IS 49, and my school was right across the street. I see my friend with a couple of kids and she was like, “Come walk with us to the store.” So, I was like, “Cool.” I figured we would just walk to school together. Then, they walk into this building, go into the staircase and stop. This boy pulls out some weed he was crushing in loose-leaf paper. He rolled up. We smoked, and I thought I was so high. I don’t even think we smoked that much. We walked across the street to school and I’m telling everybody I’m high. I’m thinking I’m the coolest just laughing OD in class. That was so funny.

Okay, so since you started young, how was the first time you got in trouble? 

My mom….She never knew I smoked. I had gotten some weed from somebody and I rolled it up in a regular loose-leaf paper. I did not know what I was doing. I did not know how to roll, and I think this was still middle school. I was really doing it for pictures, just making it look like I’m smoking it. I mean I wanted to smoke, but I didn’t roll it right. It’s a damn regular loose-leaf paper! I uploaded the pictures to Facebook, and my mom saw it. I lied and said there was no weed in there, it’s just an effects filter I used and showed it to her. I told her I edited the photo to have a blurred, smokey effect. And she was kinda believing it, but then she was like, “Why do you want people to believe that you are smoking?” So, I still got my ass beat for trying to look like I was smoking! 

At what point did you become an everyday stoner?

When I learned how to roll. Actually, before I learned how to roll, I would still get mad high with my friends. I would be with my friend all the time in her room getting mad high. She knew how to roll, her cousin knew how to roll, so we would just buy weed and get high. Since I didn’t know how to roll and she did, I would only smoke with her. I would make sure I was with her all the damn time. I was sleeping over there partially just to get high because I could not do anything like that at my crib. So, we was smoking it down. And she would try to teach me how to roll, but that was so fucking hard for me.

Did you finally get the hang of it?

Not until I got a boyfriend, who was like, “If you’re gonna smoke, you gotta roll.” I’m like, “Damn what the fuck? Alright, fine.” He really forced me to start rolling. I started rolling with Backwoods, and that’s what I learned with. Now I think Backwoods are disgusting—I only smoke papers.

These days, when is your favorite time to get high? 

I love to get super high and hit the studio. I love to get high and start writing to music. 

So, your track “Rockstar” is doing great numbers and it is an independent release. With music being a serious venture for you, how have you been able to make yourself stand out?

I’ve never stopped making videos. It’s something that I can’t stop, because if I have some shit to say, I want to say it in a video. I’m gonna be way more animated and you’re gonna know how I feel. I like to talk shit and just say it in a video. I’ve been doing them since 2018. And even before that, I’ll look at my Facebook and realize I’ve been talking shit the entire time!

You’re on a TV show and your music is buzzing, what else are you working on?

My clothing. So, before music or before anything, I wanted to go to school for fashion. I wanted to be a fashion designer, and it’s just so funny how the world works when you have a platform. My mom didn’t want me to do fashion design. She told me that fashion designers had it hard and it took a long time for them to make money. So, what I realized it came down to was me having my own personal brand. When you have your own personal brand, you could do what the fuck you want to do. So, with my clothing line, I know that I can do it and make a lot of money. My mom was really doubting me. She knew where she was coming from, but I know where I need to take this. I’m glad that I’m doing everything I want to do. I pushed myself, I stayed consistent.

Check out Cleotrapa’s new self-designed merch here: https://cleotrapa.com/ along with her new freestyle “Muggy Mcquire” here: 

The band’s debut release, known for hits like “Machinehead” and “Glycerine,” solidified Bush’s 90s legacy. They continued with chart-topping releases, including 1996’s follow-up Razorblade Suitcase, and maintained momentum through the 2000s. Their latest album, The Art of Survival, released in 2022. 

The combined endeavors created a lasting impact in the ears and minds of listeners, amassing 24 million records sold and over a billion streams across various platforms. With Gen-Z leading a 90s revival in recent years, the band has earned scores more fans while reminding older listeners that unlike some 90s acts, Bush isn’t a nostalgia act. 

That’s great and all, but why are we talking about this in a weed publication?

Great question! It all boils down to authenticity. Gavin Rossdale’s eager engagement with New York’s weed culture, exploring both licensed and unlicensed scenes, stands out in the saturated world of celebrity weed narratives that few others have been willing to embark on. In doing so, he created a lasting experience for himself and hopefully readers. 

The Licensed Dispensary Experience

We introduced Rossdale to New York’s licensed cannabis scene with a stop at The Travel Agency in Union Square, a sleek, all-white interior dispensary with discreet marketing, thanks to state laws. Despite its unassuming street presence, marked only by a small sign above eye level, a joint-styled art installation in the window lets passersby know what’s inside.

Rossdale mentioned previously visiting one of the city’s untold number of unlicensed shops in the city. He discussed how the shop gave off a lack of trust and fostered shopper uncertainty about product quality and trust. 

“You’re just basically buying it old school from some dude on the corner,” he remarked. Rossdale felt similarly uncertain about licensed shop products, likely due to his unfamiliarity with many of the brands sold in the store and an inability to smell flower. 

However, he took a keen interest in learning. Photographer Jhalil D. Wright and I peppered Rossdale with facts about the market, products, and particular brands. Typically, this type of info dump leads many to tune out or lose interest. To the singer’s credit, he soaked up the information, showing an eagerness to learn about topics like market trust, sprayed terps, and drying and curing methods.

While shopping, the Bush frontman discussed his preference for smoking flower and largely avoiding pre-rolls. After browsing for a few minutes, Rossdale bought an eighth of Mimosa from Etain despite the restrictions on examining product before buying. He also scooped up edibles from Eaton Botanticals, infused olive oil from Chef for Higher, and Flintts Mints.

The experience was fine enough, or at least as much as a shop can deliver under New York law. But, like many legacy consumers, Rossdale seemed to be seeking something more hands-on. To get that, we visited the underground hotspot Astor Club. 

On the ride over, Rossdale discussed his preferences for weed over alcohol, stating that drinking and hangovers do not benefit singers while on tour. No matter the substance, Rossdale likes to remember that it should amplify the moment or intention, not bring someone down. He’s shared this with his three sons under-18. 

He emphasized the importance of telling them the truth. “Use it to amplify the moment instead of pull you down,” he explained. “My main thing is just to be a guy, to be helpful, not a hypocrite,” he said, noting that pot makes him feel creative. To maintain the effects to his ideal level, Rossdale tends to consume every few days. 

The Legacy Experience

At Astor Club, Rossdale found the cannabis experience he was looking for. No shade to The Travel Agency or any other licensed spot. It’s not their fault. The current state and federal regulations don’t allow dispensaries to compete with the flower or features found at underground meccas. On the other hand, Astor Club has cultivated a reputation for sourcing the top bud from elite producers across the country—all while creating an environment synonymous with the culture. 

After rolling up a J of Cookie Dough from Khashtree Mason, Rossdale was convinced. “It’s like Cristal Champagne,” he said, offering ample praise for the bud and the lounge. The Bush founder was so fond of the strain that he almost stuck to it exclusively. Staff ended up reminding him of their extensive menu, all top tier options in their own right. Eventually, a few different strains were selected and smoked.  

After smoking another J, Rossdale discussed his career and personal life in-depth. Feeling that living with intention, learning, and striving to improve are all important, he said, “You have to put everything into it.” As evidenced by Bush’s new harder rock and detuned sound, Rossdale said he loves finding new sounds and ways to play music, as evidenced by the detuned sound on the band’s 2022 album The Art of Survival. 

A greatest hits album, Loaded, was released in October 2023. Originally hesitant to put out a hits compilation and be seen as a fading act, Rossdale is now eager to see the band’s top works compiled together. 

“It’s been really fun to look back and see what those songs have done for other people,” Rossdale said, sharing a similar feeling when playing live. “When I play those big crowds, it’s really fun, because there’s all these memories emanating like shooting stars out of all the audiences.” The band embarks on a summer tour starting June 1. 

Despite the ongoing passion for music and performing, Rossdale does see retirement happening at some point. A self-proclaimed fan of restaurants and food, he recently put his passion on screen hosting his own celebrity cooking show, Rockstar Kitchen Chronicles, featuring guests such as Tom Jones and Jack McBrayer. 

Despite a love for food, music, the plant, and more, Rossdale envisions dogs as his ideal next career. “I would like to run a huge ranch for rescue dogs and animals,” he said. 

Enamored with the menu of choices, Rossdale, Jhalil and I departed Astor Club with a few more selections, including more Cookie Dough and Moon Doh from Archive. 

An Authentic Celebrity Experience

Credit to Rossdale and his public relations team. All too often, PR will pitch Zoom interviews and carefully curated celebrity press ops that blanket numerous outlets and reporters, often regurgitating the same talking points no matter the outlet. 

After years of writing up celeb features that didn’t do much for the plant or reader, I have chosen to steer clear of most star-studded coverage, especially those making the media rounds hawking their new seeds, strain, brand, etc. Rossdale was no doubt in press mode, promoting his new tour and latest single. But unlike far too many celebrities, he didn’t have a stake in the weed game. He just wanted to pick up, smoke, and talk shop. 

This simple, authentic concept is one few outside of hip hop have even flirted with on the record. And that’s a damn shame. The standard media approach does little for readers and, as sales seem to indicate, it does little to help most brands boost sales or awareness. Rather than Zoom-ing or calling it to discuss a fondness for weed, Rossdale showed up, discussed his own experiences, and demonstrated an authentic desire to learn more. In doing so, he got to see both sides of New York City’s weed community, and got hella high in the process. And, unless I fucked up in my role as the storyteller here, the Rossdale approach makes for a better story every time.