Underground 'legacy' cannabis operators want in on formal market
A coalition from the illicit marketplace are pushing state officials to take their experience seriously — not just cast them as the victims of heavy-handed drug enforcement practices
Bonno
May 25, 2022
— Cannabis industry stakeholders who sold pot in New York before it was legal are skeptical they will be fully included in the new, regulated market, in spite of insistence from top officials that the state intends to pull them into the fold.
In response, a group of these "legacy" operators have formed a coalition in hopes of having state officials take the underground industry seriously — not just casting them as the victims of heavy-handed drug enforcement practices.
The group, which has about 25 members, says legacy entrepreneurs have deep connections in the marketplace and that their experience, supply chains and personal connections with customers should bolster their inclusion in the regulated industry.
"This is a close quarters market. That's just how it's always been, so when the government sticks their finger in it, they gotta recognize that first," said Umi, a former hip hop artist and legacy operator who joined the coalition its leaders are calling the Unified Legacy Operators Council (UNLOC). "I'm not hearing enough about the culture that's behind the actual plant."
The New York operator drew a comparison with the legacy of hip hop. While the genre created by Black Americans was once pushed to the margins, with kids even getting arrested for playing it too loud, once the music became popular "the entire culture got co-opted," Umi said.
"As we start to develop conversations and 'rules,' you know, I feel like damn, here's the story of hip hop all over again. We're losing access and control over what we got started," he said.
Umi and rapper M-1, a fellow operator and coalition member, laid out their case from a space that nodded to the connection they were drawing between Black culture, music and cannabis: a basement of bold paintings, gray couches and ashtrays, Alex Haley's Malcolm X joining Questlove on a nearby bookshelf and a Gil Evans horn section drifting down the stairs.
"You know, the basis (of the budding regulated industry) is top-down, we need to turn that around. Community control," M-1 said. "There's no way that the same capitalist exploitation that has happened in America can be good for cannabis."
Regulations for the state's full cannabis industry have yet to be released, though consumption of the drug was legalized last spring. While much of the roll out has yet to happen, the two legacy operators expressed skepticism that New York officials would do things the way they envision.
They cited actions like the cease-and-desist letters that state regulators sent to some cannabis distributors in February, which said operators who did not stop selling or gifting cannabis could face problems in the licensing process.
Both M-1 and Umi also cited the failure of legal industries in other states to embrace legacy operators as a reason to doubt the Empire State's plan.
Their fears, based on states that have already developed legal industries, were echoed by other members of the coalition, who used abbreviated names on the group's announcement for their protection: "Mike A" and "Dave C."
New York's regulators, however, have repeatedly made the case that the state is taking its time to do things differently.
"The Office of Cannabis Management is working hard to make the legal cannabis industry as accessible as possible to all New Yorkers, including those who have participated in the legacy market," spokesman Aaron Ghitelman said when asked about specific plans for integrating existing operators into the new industry. "Since our office's launch, we've met with various stakeholders, including those who have participated in the legacy market."
The office drafted an initial set of regulations that would see 100-plus conditional dispensary licenses go to individuals who had been previously convicted of marijuana offenses and who are successful business owners; those dispensaries would be supplied exclusively by a group of New York hemp farmers who have themselves been getting conditional licenses to grow and process the drug.
The state's Dormitory Authority is looking for design-build companies to locate and pre-fabricate storefronts that the eventual license recipients would operate. The plan is to help the license holders be set up for success on day one.
But the prefab nature of the conditional license plan is the kind of decision that is making the coalition members nervous: they think the program will be less appealing for legacy entrepreneurs because those individuals will have so little control.
"As a proprietor that understands the business, it puts you in a very precarious situation," Umi said. "First of all, regulating where are you going to situate your brick and mortar; and then they are going to put you in debt." He also worried that it was still unclear whether the early New York crop will meet the standards the state's smokers are used to.
Steve DeAngelo, a California cannabis entrepreneur and activist who was one of the people pulling together the new coalition, has said that the conditional license category is unlikely to apply to most current legacy operators regardless.
"Some of them are previously incarcerated, but by and large, they don't have the kind of legal businesses that are required," DeAngelo said.
While the coalition's current membership is New York City-centric, legacy operators' fear of exclusion extends to the Capital Region.
In a recent Albany-based informational event that the Office of Cannabis Management hoped would inform New Yorkers about the new industry, a loud chorus of local growers, sellers and business hopefuls expressed similar concerns, saying they were worried Black and legacy operators would get overlooked "as always."
The office has since continued hosting workshops in a series they are calling "Get Ready, Get Set;" but so far, all additional events have been held online.
