Happy weekend, everyone.
We’re just getting into the thick of the new year, and all the promises and challenges it presents to New York’s legal cannabis industry. Let’s take a look at the stories we at NY Cannabis Insider covered.
We ran a Q&A with Aaron Van Camp, owner of Dank 716 – Buffalo’s first legal adult-use dispensary. During its first six months in business, the store has grossed nearly $5 million in sales and cultivated a larger-than-expected customer base.
But while business at Dank 716 has been good, Van Camp recognizes some problems in New York’s legal weed industry that could harm the statewide market. There are issues with product quality, regulations – ranging from potency-based taxes to requirements for many cultivators to grow outdoors – and business acumen among marijuana entrepreneurs, to name just a few.
Tax attorney Paula Collins contributed a guest column, in which she writes about a little-known strategy (using Internal Revenue Code 471) that the state’s cultivators, processors and manufacturers can take advantage of to reduce their tax burden.
“In New York, IRC 471 might be one of the few examples in which it pays to be a cultivator, as opposed to a retail dispensary operator,” Collins wrote.
In another guest column Collins wrote, she explains the concept of Employee Stock Ownership Plans (ESOPs), and whether licensed cannabis companies in New York should consider establishing one.
“I hate to be a buzzkill, but setting up an ESOP is a long, complicated process that starts by interacting with the IRS and 26 US Code Section 401,” Collins wrote. “Yes – it is a lot more involved than setting up your Quickbooks for you.”
We took a look at a federal lawsuit filed against New York cannabis regulators by Variscite, a company that previously sued the state in a case that led to a partial injunction on the Conditional Adult-Use Retail Dispensary program. The state settled with Variscite in early December, promising the company an adult-use retail license.
NY Cannabis Insider spoke to three marijuana-focused attorneys about how viable they find the new case, which Variscite filed on Dec. 18. While the plaintiff in the case has been previously successful in pausing cannabis licensing in New York via court injunction, several weed industry attorneys are nervous, but less alarmed about this lawsuit than previous court cases.
Lastly, we posted attorney Jeffrey Hoffman’s latest Ask Me Anything segment, in which he answered questions about the new federal Variscite lawsuit, turmoil among regulators and other topics.
Have a great weekend everyone, we’ll be back with plenty more next week.