420 with CNW — New York Clamps Down on Marijuana Black Market as Licensed Firms Struggle

New York authorities are intensifying their efforts to combat the proliferation of unlicensed shops selling marijuana across the state in response to the ongoing struggle to establish a thriving legal marketplace for the substance. With the legalization of cannabis in 2021, an influx of unauthorized vendors peddling cannabis, vape products, edibles and more has posed a significant challenge to the state’s legal cannabis industry, with New York City bearing the brunt. Presently, only 23 legal cannabis dispensaries are operational statewide, and nine are located in NYC.

A recent study conducted by the Independent Budget Office of NYC revealed that approximately 1,500 unregulated retailers within the city may be holding marijuana products worth $484 million. If these products were to be sold through legal channels, it could generate a substantial $19.4 million in revenue for NYC.

In response, the state has escalated its efforts to crack down on unregulated shops by increasing the frequency of inspections, imposing fines and even ordering closures when necessary. These measures extend beyond the stores themselves, with landlords now facing penalties of up to $10,000 if they knowingly lease commercial properties to unlicensed sellers.

The crackdown on these illicit operations is not just a legal matter; it also has significant economic implications. Unlicensed sales deprive the state of much-needed revenue, as the state imposes a 13% retail tax on all cannabis products, with additional taxes based on the potency levels of THC.

Beyond the financial considerations, unlicensed shops also present substantial health risks. A 2022 study commissioned by the New York Medical Marijuana Industry Association, which examined products from 20 illicit stores in NYC, discovered that around 40% of these products contained harmful contaminants such as salmonella, lead and E. coli.

The state’s Marijuana Control Board recently announced plans to open up license applications to the general public as well as to multistate medical companies and manufacturers. Previously, licenses were restricted to individuals with prior cannabis-related convictions under the Conditional Adult Use Retail Dispensary (CAURD) program. This move is expected to expand the number of legal cannabis shops throughout the state, further shaping the future of New York’s cannabis industry.

While illicit sales have been fueled partly by delays in the opening of legal dispensaries, experts anticipate a decline in such sales in the years ahead. New Frontier Data, a marijuana research company, projects that illicit sales, which were estimated to reach $7 billion annually in 2023, will decrease to approximately $3 billion by 2030 in New York.

The black market isn’t only a concern in New York. Major marijuana companies such as Tilray Brands Inc. (NASDAQ: TLRY) (TSX: TLRY) also have to contend with illicit marijuana sellers in the jurisdictions where they operate, and authorities are constantly trying to weed out black market actors so that only licensed operators can sell their products.

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CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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420 with CNW — California Senate OKs Marijuana Cafes Bill

The California senate has passed a marijuana cafe bill that would give dispensaries permission to provide noncannabis drinks and foods to customers who have approval from local authorities. State senators passed Assemblymember Matt Haney’s Bill AB 374 in a 33 to 3 vote before sending it back to the assembly for a concurrence vote thanks to slight amendments made in a Senate committee.

If the assembly votes in favor of the amended cannabis cafe bill, it could head to California Governor Gavin Newsom’s desk for his signature.

The marijuana consumption cafe bill would grant local governments the authority to allow cannabis consumption lounges within their jurisdictions to sell noncannabis-infused soft drinks and foods. It would also prohibit the sale of alcoholic beverages and the consumption of tobacco at these facilities. Furthermore, the measure would also allow “live music and other performances” and the sale of tickets to these performance events in cannabis consumption lounges.

Microbusinesses and retailers where marijuana consumption is allowed would only be permitted to sell freshly prepared drinks and foods to customers. However, only retailers would be allowed to offer prepacked food.

These regulations are in line with policies adopted by the California Department of Cannabis Control (DCC) in late 2022.

Assemblymembers also revised the bill to make it clear that hemp-based drinks and foods did not qualify as noncannabis products that could be sold at cannabis consumption lounges. The measure was also revised to include stipulations requiring that cannabis products and noncannabis products be stored and displayed in separate locations.

Although some businesses in California have found ways to circumvent laws banning on-site consumption establishments from providing food to guests, these establishments currently operate in a grey area.

Cannabis consumption sites have been controversial since they were first introduced. Most states with legal cannabis programs have banned public consumption and require that users only consume cannabis in their private residences. This means that tourists who travel to states with recreational cannabis programs often have no way to legally consume the cannabis they buy from licensed dispensaries, potentially depriving states of billions of dollars in cannabis tourism revenue.

Most of the consumption lounges in California were located in Oakland and San Francisco by the end of last year. However, municipalities in Central Valley and Southern California are giving consumption lounges the green light. With new lounges opening in Coalinga, Central Valley, Desert Hot Springs and Palm Springs in Riverside County along with Port Hueneme in Ventura County and National City in San Diego County, the number of consumption lounges in California is expected to grow by two to three times over the next couple of years.

As different jurisdictions move to create enabling laws for marijuana consumption lounges, entities such as Tilray Brands Inc. (NASDAQ: TLRY) (TSX: TLRY) are likely to see higher demand for their products as consumers have public locations within which they can consume the marijuana products they buy.

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420 with CNW — NY Recreational Cannabis Rollout Hits Another Snag as Judge Halts Business Licensing

The rollout of recreational cannabis in New York has faced yet another hurdle as a judge from the state’s Supreme Court has put a halt on all applications for business licenses to establish adult-use marijuana dispensaries. The judge cited inconsistent and unclear information from regulating officials. This recent setback adds to the challenges that have characterized the launch of legalized marijuana in New York.

The issue revolves around a program called the Conditional Adult Use Retail Dispensary (CAURD), managed by the Office of Cannabis Management (OCM). When the state legalized marijuana in March 2021, lawmakers and cannabis regulators initially announced that a portion of retail licenses would be reserved for small nonprofit organizations and individuals who had been adversely affected by the war on drugs.

This exclusion left out several potential marijuana businesses, including those with existing medical cannabis licenses, often owned by larger multistate operators. Some of these operators took legal action against the state earlier this year. Additionally, a group of service-disabled military veterans filed a lawsuit against the state, arguing that the CAURD program violates their rights and is unconstitutional because they were not eligible for permits.

As a response to this lawsuit, Judge Kevin Bryant, presiding over the State Supreme Court, issued an injunction on Aug. 7, 2023, which temporarily suspended all CAURD applications. This injunction was subsequently upheld on Aug. 18. While the OCM has granted licenses to a few hundred emerging CAURD businesses, records from the agency indicate that only 23 legal marijuana retail stores are operational in the state. Interestingly, more than 1,500 unlicensed cannabis retailers are currently operating exclusively in New York City.

Last week, a glimmer of hope emerged for certain applicants when the state released a list of 30 CAURD applicants that had made significant progress in the application process and were thus exempt from Judge Bryant’s order. However, in a subsequent ruling last week, Bryant noted that information from the OCM indicated that not all 30 applicants had fulfilled the necessary licensing prerequisites. As a result, he directed OCM to provide an updated list of potential injunction-exempt applicants under oath, planning a comprehensive, individualized order.

This series of events has taken many by surprise and left both applicants and observers feeling perplexed. Osbert Orduña, CEO of the Cannabis Place, which is in the process of applying for a CAURD license to operate in Queens, expressed disappointment in the recent developments. He emphasized that this setback has negative repercussions for small businesses, potential employees and cannabis consumers in New York — all affected by a lawsuit initiated by a small group of individuals.

These regulatory hiccups can be massively disruptive, and even established companies such as Tilray Brands Inc. (NASDAQ: TLRY) (TSX: TLRY) may possibly reconsider staying in a market that doesn’t have a reliable regulatory regime guiding operators, creating uncertainty about the stability of the rules under which they operate.

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CannabisNewsBreaks – Lucy Scientific Discovery Inc. (NASDAQ: LSDI) Acquires High Times Intellectual Property, Featured in Financial News Media Article

Lucy Scientific Discovery (NASDAQ: LSDI) today announced the acquisition of the intellectual property (“IP”) of High Times, an iconic brand in the cannabis industry. In addition to the Hightimes.com domain, the transaction also includes the trademarks for the Cannabis Cup and 420.com brands and their respective domain names. In exchange, High Times will receive a 19.9% stake in Lucy’s outstanding stock as well as performance-based payments.

“Lucy expects this acquisition to drive high margin revenue quickly and sustainably across the cannabis sector around the world. This is a great opportunity to grow the market presence of the nearly 50-year-old High Times brand globally through licensing and online distribution,” Lucy Scientific Discovery Executive Chairman and CEO Richard Nanula stated in the news release. “We are confident that this opportunity can add significant value for our shareholders.”

In addition, Lucy Scientific Discovery (NASDAQ: LSDI) was featured in a Financial News Media article together with other companies active in the burgeoning global cannabis market, including SNDL Inc. (NASDAQ: SNDL), Canopy Growth Corporation (NASDAQ: CGC) (TSX: WEED), Aurora Cannabis Inc. (NASDAQ: ACB) (TSX: ACB), and Tilray Brands, Inc. (NASDAQ: TLRY) (TSX: TLRY). The piece discusses opportunities in the market driven by increased legalization of cannabis and rising acceptance of its use for medical purposes. Statista projects that revenue in the global cannabis market is projected to reach US$51.27 billion in 2023, at an annual growth rate (“CAGR” 2023-2028) of 14.95%, resulting in a market volume of US$102.90 billion by 2028.

To view the full press release/article, visit https://cnw.fm/IdURM and https://cnw.fm/FjOGd

About Lucy Scientific Discovery Inc.

Lucy Scientific Discovery is a Nasdaq-listed company with holdings and operations in a variety of psychotropic businesses. The company holds a Controlled Drugs and Substances Dealer’s License granted by Health Canada’s Office of Controlled Substances. Lucy Scientific Discovery Inc. and its wholly-owned subsidiary, LSDI Manufacturing Inc., operate under Part J of the Food and Drug Regulations promulgated under the Food and Drugs Act (Canada). This specialized license authorizes LSDI to develop, sell, deliver, and manufacture pharmaceutical-grade active pharmaceutical ingredients (“APIs”) used in controlled substances and their raw material precursors. With a focus on pioneering innovative therapies for patients in need, Lucy Scientific Discovery Inc. is dedicated to advancing the understanding and applications of psychotropic medicines, improving mental health outcomes, and enhancing well-being for individuals worldwide. For more information, visit the company’s website at www.LucyScientific.com.

NOTE TO INVESTORS: The latest news and updates relating to LSDI are available in the company’s newsroom at https://cnw.fm/LSDI

About CannabisNewsWire

CannabisNewsWire (“CNW”) is a specialized communications platform with a focus on cannabis news and the cannabis sector. It is one of 60+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, CNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, CNW brings its clients unparalleled recognition and brand awareness. CNW is where breaking news, insightful content and actionable information converge.

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