 We reported last week that Cresco Labs, who has been in process of aquiring Columbia Care, announced that they are selling certain Cresco and Columbia Care assets in New York, Illinois, and Massachusetts to Combs Enterprises, which is owned and controlled by music figure, Sean Combs, otherwise known as “Diddy” and previously, “Puff” or “Puff Daddy.”
The assets include facilities that will enable Combs Enterprises to grow, manufacture, distribute, and sell their branded products in the states where they are located, which again were New York, Illinois, and Massachusetts. However, New York’s State Office of Cannabis Management has just released their proposed regulations list for the state, and they are causing headaches for Multi State Operators. With Combs Enterprises asset purchases making him a multi state operator, his new aquisition may not be so great. These are, again, just "proposed," but they're likely to stay the same. The part of the new regulations that MSOs are really focusing on is Section 123.17 (d). It basically says that if you want to operate a licensed cannabis retail business in New York State, you cannot hold a direct or indirect interest in any licensed cannabis business outside of New York state. This applies to owners, operators, investors, landlords, financiers, or management service provider for any licensed cannabis cultivator, processor, distributor, retail store, delivery service, or laboratory that is outside of New York State. This rule probably even applies to those who own stock or interest in a fund which happens to invest in cannabis businesses. So, if you want a license to operate a retail cannabis business in New York State, you will not be a Multi-State Operator. You’ll be limited to New York only. And that also applies to Sean Combs new asset purchase. Since he aquired asssets from Cresco Labs and Columbia Care that are located in Illinois, Massachusetts, and New York, he will not be able to operate retail cannabis locations in New York State. On the other hand, Combs could still operate in New York’s medical marijuana market. There are also many Multi-State Operators who will also now have to drop any plans for joining the New York state retail cannabis market. ThoseMSO’s who are already in the state as a medical marijuana provider can continue in the medical market, they just can’t expand to adult use retail sales. Or, the multistate operators could reclassify themselves as distributors within the state. This way, as distributors, they can have their branded products for sale in retail stores owned by other vendors. Likewise, existing brand names from other states can partner with distributors to create New York grown products, with their brand name on it, for selling in New York retail stores. Some love this new proposed regulation and feel it could keep New York’s medical marijuana industry flourishing, pointing out that often when a state opens up to retail sales, the medical market dies down, whereas this rule could have the Multi-State Operators working to keep that avenue open and strong. Others have said that they feel this new regulation is ‘terribly designed’ and will leave new retail store license holders with a lack of investors with cannabis experience. Their thought is that perhaps the regulation could be modified to apply only to New York licenses for cultivation and manufacturing businesses. As mentioned earlier, at this time, these regulations are just proposals, and not yet finalized. Comments are closed.
|
RSS Feed