Clearing the Smoke: Legalization in NYC is Off to a Rocky Start
*Article from Lexington Line Spring/Summer 2024 issue, page 17
Check out the full issue here
Jeremy Rivera served two years in Gouverneur Correctional Facility in Upstate New York for cannabis possession in 2016. A few years after release, he applied for a CAURD license to legally sell cannabis.
The Marihuana Regulation & Taxation Act (MRTA) was signed into effect in March 2021, making cannabis effectively legal in the state of New York.
The first set of licenses were Conditional Adult Use Retail Dispensary (CAURD) licenses. These are reserved for those who have been convicted of a non-violent cannabis crime in the state of New York.
Although optimism was high, New York cannabis followed the same pattern as most other states. The Office of Cannabis Commission (OCM) was sued by four veterans saying the CAURD license was unfair. This halted all cannabis licensing, causing immense financial strain.
“Weed sucks, from a larger business perspective,” Rivera says. “Having to do a lot for so little.”
As the legal cannabis market begins to open across the U.S. and New York state, it is important not to leave out those who have faced legal repercussions and are still facing time for non-violent cannabis crimes.
While entrepreneurs can make legal money on the same product, so a question remains: how do we create fair opportunities for— and offer reparations to— those punished for something that is now widely accepted?
The “legacy market” is composed of people who have grown, processed, and sold cannabis before legalization. Many legacy individuals have faced time for cannabis crimes. A CAURD license’s purpose is “establishing businesses owned by justice-involved individuals at the bedrock of New York’s adult-use cannabis market.” This license type allows legacy individuals, including those whose prior convictions have served as barriers to traditional employment, to transition to the legal market.
There are currently 80 legal dispensaries in the state of New York, but according to the New York City Council, about 8,000 unlicensed dispensaries— the CAURD process proved to generate bureaucratic hurdles that sidelined the legal dispensaries while unlicensed dispensaries flourished.
One such hurdle appeared in 2023, when a group of disabled military veterans sued the New York Office of Cannabis Management’s Conditional Adult-Use Retail Dispensaries for prioritizing those with cannabis conviction over other disproportionately affected groups.
Due to this, in August of 2023, a judge imposed an injunction blocking any new retail licenses from being used or any new dispensaries from opening.
This hurt the CAURD license recipients and applicants who are fully-funded entrepreneurs like Rivera, who is the primary license holder for Terp Bros. in Astoria, Queens.
Rivera applied for a CAURD license in August 2022 and was awarded it in April 2023. Terp Bros was projected to open in August 2023; due to the lawsuit, it was halted until October 2023. This was more than a year after he applied— a period when new unlicensed dispensaries seemed to open at the drop of a hat.
This three-month lull was particularly damaging to small businesses like Terp Bros., who are forced to compete with large Multi-State Operators (MSO) like Curaleaf Holdings, Acreage Holdings, and Green Thumb Industries. For MSO’s these losses barely make a dent.
Unlike MSOs, small businesses like Rivera’s focus on community building through events and other kinds of outreach, something more germane to the cultural role cannabis has played for centuries.
It’s this aspect that has Rivera sure, despite the obstacles, that he’s in the right business.
“I couldn’t imagine doing anything different,” he says. “I try to be a warrior for ethics while creating a model for small businesses so that they can be successful.”