• Alexander Bencore

Opt-Out Rates are Low in New York, but Killing Cally

My story today is from one of the best news sources in the industry, Ganjapreneur.


9% of New York Towns Opt-Out of Cannabis Operations


THE SCOOP

Our here in California, we’ve heard a LOT of noise about the potential for the New York cannabis industry. Those New Yorkers got nothing but lip (mostly said at Lakers games, but still), treating cannabis like it’s just another industry like advertising or finance or football is blasphemy … we’re California (!), home of the greatest weed in the world, and center of the cannabis universe… right?

In data outlined by Finger Lakes 1 News: "Only 9% of New York towns and villages have opted out of allowing adult-use cannabis operations, according to Associations of Towns of New York (ATNY) ... The 9% opt-out rates include 84 towns and 46 villages throughout the state."


THE DEEP DIVE


Meanwhile, back in California... Oops?


The opt-out figures in New York, which only legalized cannabis this year via the legislative process, are in stark contrast to the opt-out rate in California, which — despite being the world’s largest regulated cannabis marketplace — stands at 68%, according to a Politico report from September.


That report notes that the low acceptance numbers are a big cause of the state’s flourishing underground cannabis market.


  • In fact, Politico says that California's illicit market is TWICE THE SIZE of the legal market.

  • MJ Biz Daily says "There are 745 dispensaries in California right now," ... (not including licensed delivery services or microbusinesses). "On a per-capita basis, there should be between 4,000 and 5,000."


The Fresno Bee reports that "Californians Legalized Pot, But These 10 Big Cities Still Don’t Have Retail Dispensaries"


Out of the 482 cities in California, only 174 of them allow some form of licensed cannabis business, says Hirsh Jain of Ananda Strategy. “


Here are the 10 major cities that DO NOT; they account for more than 2.8 million people without immediate access to cannabis retail, outside of delivery.


The 10 are:

1. Fresno

2. Bakersfield

3. Anaheim

4. Irvine

5. Fremont

6. Santa Clarita

7. Fontana

8. Oxnard

9. Huntington Beach

10. Glendale


THE LOOP BACK


New York seems to have learned [some of] the hard lessons that are keeping the illicit market viable in the largest cannabis state in the US:

  • The highest cannabis taxes in the country

  • Complicated and expensive licensing

  • The massively counterproductive opt-out component of Prop 64, and

  • The mini-military invasion of Operation Hammerstrike.

But before you East Coasters start saying you’re doing it soooo much better, in New Jersey 63% of towns block cannabis businesses, and are setting themselves up for failure.

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