Jacob Redmond
Well-Known Member
Medical marijuana is poised to be an economic flop in New York, according to a Syracuse University business professor who invests in the legal marijuana industry.
John Torrens, a professor of entrepreneurial practice in SU's Whitman School, calls New York's medical marijuana law "the worst in the nation in terms of its business friendliness and accessibility for patients." New York won't benefit from the "green rush" seen in other states, he said.
"This is a huge entrepreneurial activity the state has squandered," Torrens said.
Torrens is a managing member of a private fund that has invested in legal cannabis businesses in California and Colorado. He's closely studied New York's budding medical marijuana program and talked with 10 of the 43 applicants seeking licenses to grow and distribute medical marijuana in New York state.
He refused to identify the applicants he spoke with or disclose any details about them. His fund, whose members are relatives and friends, decided not to invest in New York because of misgivings about the state's law.
New York is expected to award licenses this month to five applicants, who will grow medical marijuana and begin distributing it early next year.
In an interview with syracuse.com, Torrens ticked off five reasons why he believes New York's medical marijuana program is destined for failure.
New York is overregulating medical marijuana.
The law only permits patients with 10 conditions to access the drug: cancer, HIV/AIDS, Lou Gehrig's disease, Parkinson's disease, multiple sclerosis, spinal cord damage, epilepsy, inflammatory bowel disorder, neuropathies and Huntington's disease.
Torrens estimates about 125,000 people statewide will qualify for medical marijuana. If each one were to spend $300 to $400 a month that would not generate enough revenue for licensees who will have to spend millions to comply with the regulations, according to Torrens. "It's going to take these companies so long to break even I can't imagine it's a good investment for anybody," he said.
Politics may undermine the licensing process.
Torrens fears licenses may be awarded based on politics, not merit. Some companies applying for licenses are astute, while others have a lot of money but no idea what they are doing, he said. Torrens said some of the applicants he met gave the impression they would get licenses because of their political connections.
"I hope New York keeps it a meritocratous process, but we all know Albany is a swamp," Torrens said. "It's ripe for cooked politicians to put their fingers all over this." If that happens, applicants who are passed over may sue the state, he said.
"Seed to sale" model is flawed.
Under New York's law, each licensee will be responsible for handling everything from growing and processing marijuana to selling it. Torrens says this is the equivalent of making beer companies grow their own hops, brew and package their beer and sell it through their own retail outlets. "Cannabis is a commodity," Torrens said. "To have these dispensaries be required to grow a commodity they could get cheaper someplace else makes no sense."
Patients may have to drive too far.
Under the law, each licensee can open four dispensaries. That means there will be 20 dispensaries statewide. It is unlikely licensees will want to open dispensaries in sparsely populated areas of the state like St. Lawrence County, Torrens said. "It's unfortunate for the patients," Torrens said. "A good percentage of patients are going to have to drive too darn far for it."
Homegrown ancillary business opportunities will be limited.
There are already companies that make and supply greenhouse systems, lighting and other goods and services required by marijuana companies.
"These players are serving other markets now and they will be first to get in the door in New York," Torrens said. "There will be opportunities, but it will be a fraction of what it could have been. New York left a huge opportunity on the table to really foster creativity, innovation and entrepreneurship around this new industry, but they blew it."
News Moderator: Jacob Redmond 420 MAGAZINE ®
Full Article: NY is blowing new medical pot business, expert says | syracuse.com
Author: James T. Mulder
Contact: jmulder@syracuse.com
Photo Credit: The Associated Press
Website: Syracuse NY Local News, Breaking News, Sports & Weather - syracuse.com
John Torrens, a professor of entrepreneurial practice in SU's Whitman School, calls New York's medical marijuana law "the worst in the nation in terms of its business friendliness and accessibility for patients." New York won't benefit from the "green rush" seen in other states, he said.
"This is a huge entrepreneurial activity the state has squandered," Torrens said.
Torrens is a managing member of a private fund that has invested in legal cannabis businesses in California and Colorado. He's closely studied New York's budding medical marijuana program and talked with 10 of the 43 applicants seeking licenses to grow and distribute medical marijuana in New York state.
He refused to identify the applicants he spoke with or disclose any details about them. His fund, whose members are relatives and friends, decided not to invest in New York because of misgivings about the state's law.
New York is expected to award licenses this month to five applicants, who will grow medical marijuana and begin distributing it early next year.
In an interview with syracuse.com, Torrens ticked off five reasons why he believes New York's medical marijuana program is destined for failure.
New York is overregulating medical marijuana.
The law only permits patients with 10 conditions to access the drug: cancer, HIV/AIDS, Lou Gehrig's disease, Parkinson's disease, multiple sclerosis, spinal cord damage, epilepsy, inflammatory bowel disorder, neuropathies and Huntington's disease.
Torrens estimates about 125,000 people statewide will qualify for medical marijuana. If each one were to spend $300 to $400 a month that would not generate enough revenue for licensees who will have to spend millions to comply with the regulations, according to Torrens. "It's going to take these companies so long to break even I can't imagine it's a good investment for anybody," he said.
Politics may undermine the licensing process.
Torrens fears licenses may be awarded based on politics, not merit. Some companies applying for licenses are astute, while others have a lot of money but no idea what they are doing, he said. Torrens said some of the applicants he met gave the impression they would get licenses because of their political connections.
"I hope New York keeps it a meritocratous process, but we all know Albany is a swamp," Torrens said. "It's ripe for cooked politicians to put their fingers all over this." If that happens, applicants who are passed over may sue the state, he said.
"Seed to sale" model is flawed.
Under New York's law, each licensee will be responsible for handling everything from growing and processing marijuana to selling it. Torrens says this is the equivalent of making beer companies grow their own hops, brew and package their beer and sell it through their own retail outlets. "Cannabis is a commodity," Torrens said. "To have these dispensaries be required to grow a commodity they could get cheaper someplace else makes no sense."
Patients may have to drive too far.
Under the law, each licensee can open four dispensaries. That means there will be 20 dispensaries statewide. It is unlikely licensees will want to open dispensaries in sparsely populated areas of the state like St. Lawrence County, Torrens said. "It's unfortunate for the patients," Torrens said. "A good percentage of patients are going to have to drive too darn far for it."
Homegrown ancillary business opportunities will be limited.
There are already companies that make and supply greenhouse systems, lighting and other goods and services required by marijuana companies.
"These players are serving other markets now and they will be first to get in the door in New York," Torrens said. "There will be opportunities, but it will be a fraction of what it could have been. New York left a huge opportunity on the table to really foster creativity, innovation and entrepreneurship around this new industry, but they blew it."
News Moderator: Jacob Redmond 420 MAGAZINE ®
Full Article: NY is blowing new medical pot business, expert says | syracuse.com
Author: James T. Mulder
Contact: jmulder@syracuse.com
Photo Credit: The Associated Press
Website: Syracuse NY Local News, Breaking News, Sports & Weather - syracuse.com
