Odd Lots - Pot Lots Part 3: Righting the Wrongs of the Past

Episode Date: April 20, 2023

Marijuana has been legalized in a number of places in the US now, but what New York is trying to do with its legal weed market is somewhat unique. Not only is the state trying to use legalized weed to raise tax revenue and create a new industry with lots of new jobs, it’s also trying to use its legalized cannabis market to rectify some of the wrongs of the past. In the third and final episode of this special Odd Lots series, we speak to those who have been affected by historic attitudes and policies towards drugs, and some of the state officials who are now trying to right these past injustices. See omnystudio.com/listener for privacy information.

Thanks for listening to Odd Lots. Follow the show on Amazon Music for more future episodes or just ask, Alexa, play the Odd Lots podcast on Amazon Music. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com slash audio. That's vanguard.com slash audio. All investing is subject to risk vanguard marketing corporation distributor.

Hey, young America, we need to talk about something called grass. Not that grass. I'm talking about marijuana. It's stimulating, mind expanding, safer to use that alcohol. It's the in-thing, the hula-hoop of the jet generation, and as much a part of growing up as smoking corn soak behind the back fence. Such are the myths concerning marijuana. Myths that lull thousands of young people into experimenting with a noxious weed.

The facts are otherwise. Marijuana is an intoxicating, mind-muddling drug. Every case history tells the same story, a story that's a tragic pattern of men and women's lives. Cause, marijuana. This harmless-looking cigarette is cloaked in many innocent disguises. But light the match, inhale the smoke, and it becomes an invitation to your own murder. This killer and the man who sells it has no respect for anybody. That's how the U.S. has largely campaigned against marijuana from the regular television ads to PSAs straight from the American Medical Association and even movies.

That last clip you heard is from the 1949 movie She Should Have Said No, also known as Wild Weed. It's one of those movies that's filled with messages about how bad drugs and especially marijuana really are. Watching morality tales like she should have said no, they're not very subtle in their messaging. No, they're not. A lot of the messaging around weed has been about how bad it is for your health, your youth, your overall life direction. And that has perpetuated the notion that those who deal in the industry are basically criminals and terrible people. And it's kind of crazy to contrast those movies with what's happening now. So what's it like running a weed truck?

Well, you know, it's pretty fun. You got some free samples from it, that's for sure. We've had a couple customers come up and they're like, can I smoke this? Like, is this okay to do? And it's like they're not used to it and they think it's still, you know, this forbidden thing. But then we have customers who are like, oh, yeah, this is great to see that it's finally starting to open up. That's a bud tender, get it? At a local weed truck in New York,

and those have become as ubiquitous on Manhattan streets as hot dog carts or ice cream vendors. And she says attitudes towards pot have changed a lot. You still have people who can't believe that this is legal, but she says she sees all types of people coming to buy weed nowadays, even parents with their adult children. Welcome back to potlots. We've talked about the illicit market in New York and the business of legal weed,

and in this episode we're going to be speaking about one of the things that makes New York unique. Because not only is the state trying to use legalized weed to raise tax revenue and create a new industry with lots of jobs, it's also trying to use the program to rectify some of the wrongs of the past. Two historical policies were particularly damaging to black and brown communities across the state. The first is the Rockefeller drug laws. And Governor Rockefeller at the time, you know, there was a big panic across the country about drugs and drug use. and, you know, those drug laws really created these insanely harmful mandatory minimum sentences

for minor possession and the sale of illicit drugs. And the second thing was stop and frisk. That's Damien Fagan. He probably has one of the most interesting government jobs in the world right now. He's chief equity officer at New York's Office of Cannabis Management. So he thinks about this idea of social justice a lot, as well as the legacy of previous drug policies. Former New York Governor Nelson Rockefeller toughened up punishment for drug offense

in the 1970s in response to a crime wave in the city, and Stop and Frisk, which allowed New York police officers to temporarily detain people and check them for contraband, was practiced for many years, including under Mike Bloomberg's tenure as mayor. Bloomberg is, of course, the founder and majority owner of Bloomberg LP. And so the combination of the Rockefeller drug laws and Stop and Frisk led to people spending years in prison for minor cannabis possession. And predominantly, you know, with the implementation of Stop and Frisk, you know, we have all the numbers now.

1.2 million individual arrests over 40 years. Almost close to 60% of those arrested were black in a state that is 15% black. This is the kind of injustice that New York's legalized weed program is trying to address. So when it comes to handing out weed licenses, priority is given to people with prior pot-related convictions or their relatives as well as nonprofits. Some of the taxes from legal weed sales are also being used for a re-relivenging. reinvestment fund that's supposed to be used to support communities that have been most affected by the war on drugs. The biggest social equity goal laid out in the cannabis law is 50% licenses going to social equity applicants. The second biggest component of it is this community reinvestment fund.

And so this is probably, for me, the most impactful part of the cannabis law. 40% of all the tax revenue generated in perpetuity in the state of New York from cannabis sales will get reinvested into communities disproportionately impacted by the enforcement, disproportionate enforcement of cannabis. And so that looks like $300 million a year for, you know, decades every year being given out in grants for reentry services, nonprofits, park projects, schools in those communities, in places like East Brooklyn, South Bronx, East Buffalo. And that is where the impact is really going to be felt long term. That's going to create generational opportunity for a lot of these communities. And so those are the two pillars, the 50% licenses and the reinvestment. And so these were tools that were really weaponized

against already marginalized communities for decades. And, you know, when things like that happen in America and we look back and we're like, wow, I can't believe we did that. Oh, well, let's move forward. Like, we couldn't do that this time. Those people who were arrested, those people who, you know, had to see their kids through glass because they were smoking a plant outside of NITHA housing, you know, they're still here. They're still, their kids are here, their families are here. They're mad. And so it's often very easy and convenient for Americans to sort of just like, oh, it's really bad that we did that, but can't do anything better now. But we absolutely can. This cannabis law isn't actually going to fix a lot of the structural issues and all the consequences of those policies.

But it can definitely make life better for a lot of these communities. And it definitely can create a more exciting industry with a lot more participation from everyday New Yorkers. For New York, it means walking a fine line between nurturing this new legal industry and making. making sure it can succeed, and also avoiding going back to the injustices of the past by cracking down too harshly on the illicit sellers now. Damien betting that some of this will happen naturally, that as the legal weed business matures, consumers will migrate towards the regulated shops and product. If you build the legal weed bodega, they will come. We're never going back to a place where people go behind bars for selling a plant. We're just, we're not doing that as a state.

It's already re-traumatizing people, the minimal of enforcement tactics we're doing right now. But what we are going to do is we're going to look at the scale of the challenge of the illicit market very differently. So what we've seen in other states is that as you increase the legal footprint of your legal market and you give consumers safe tested, affordable legal product on their corners, the illicit market fades into the background. At a certain point, these guys are going to look like they're selling bathtub bourbon outside of a liquor store. And consumers are just not going to go for it. They're not going to go for a store that can't tell them where they got the product from and it's in a grocery bag. when there's a place right next door that's selling safe tested product from a family farm that you know upstate. And so that's on us in a lot of ways to step up the rollout of these legal options because New Yorkers are going to smoke weed.

And if they don't have a legal place to buy it, these stores will proliferate. So we have to meet that demand where it's at. A lot of people think that this is an enforcement challenge, but it's actually just a timing challenge. Eventually, these stores will just supply and demand will remove them for us. And then the second thing is consumer education. I don't think people understand how expensive it is for the city of New York or Schenectady to send five police officers to a shop, to bag and tag all the product in there, to write it up, to issue a summons. Setting competition from the illicit market aside, there are other impediments for people who want to open a legal weed business. And by extension, impediments for New York social justice ambition when it comes to weed.

We touched on this a bit in our first episode, but getting a license and setting up a brick and mortar business isn't cheap. And it might be especially difficult for the people that New York is trying to give priority to. The cost of entering this space is central to the lack of demographic diversity in ownership in the industry. And so when I look at the demographics of ownership across the state, across the country, I'm seeing the racial wealth gap. I'm not seeing a competitive market where the best got to the top. It's really who had access to private capital at the time of legalization in their state respect to state. And so when we, the designers of the cannabis law in New York, we're looking at other markets, one market jumped out to them as more accessible and more stable and more consumer-friendly

than any other state, and that's Washington State. Washington State has a two-tier market. So they separated retailers from producers, essentially banning vertical integration in the cannabis space. Much of the reasons for doing stuff like this is the same reasons you wouldn't want Jack Daniels opening up a liquor store right after prohibition. You're never going to get better whiskeys. You're just going to get Jack Daniels because they control everything in the supply chain and eventually would consolidate the market.

And so by creating that two-tier structure, you're creating access points for small business. So now instead of having to do the grow, processing, manufacturing, distribution, and retail in a $20 million business, you can just do the distribution facility for half a million dollars. You can get a retail store and Schenectady for half a million dollars. You could start a farm for $100,000. there's access points for small business operators in a two-tier market that they wouldn't normally have access to in a vertically integrated industry.

But for Damien, if New York can get it right, if it can use the legal weed industry to try to begin to address some of the social inequities of the past, then that makes sense. Not just from a social justice perspective, but also from a business one. He says New York wants to create a vibrant and stable marijuana industry, one where there are lots of small-scale independent operators rather than a few dominant players. Think of a vibrant craft beer scene rather than a few big corporate beer brands. And he's looking to Washington State as a blueprint of how New York can achieve this. What we want the New York market to look like, I think that when people were drafting the MRTA

and drafting our cannabis regulations and looking at Washington State, we were also looking at the economic data from what is now a legal market that's eight years old in Washington. So when Washington first legalized, they had 1,300 farmers growing cannabis across the state. They had grew about 500 retail stores. Eight years after legalization, they have 1,150 farmers. So that's a stable marketplace. After almost a decade, they've barely consolidated their production footprint. Those farmers are still making good money. Another big data point that we looked at in Washington State is skews, you know,

how many products are on the shelves on average in each dispensary. And in Washington State, there's on average, 1,700 different products in each dispensary. We compared that to, say, Florida, where, you know, they have a medical cannabis market, that very much for all intents of purposes, acts like a recreational market. They have on average 70 products per store. And that is a consequence of vertical integration versus a two-tier market.

And so that's what we're really looking for to judge our success is diversity of consumer experiences, diversity of products, diversity of participation on the brand side and on the production side in terms of business ownership. Ultimately, we want large operators, medium-sized operators, and thousands of small businesses to be competing,

interdependently on one another in a very dynamic supply chain. We see this as a huge opportunity for New York to put its cultural stamp on cannabis. But this is all still very new, and Damien stresses that the work is ongoing. If President Biden were to decide to reschedule marijuana as a class one drug, New York state's entire calculus for how this is meant to work could change, and so could its business plans. What you've seen so far, what you will see in the coming years from our office and from Albany generally about cannabis is this the most flexible you'll ever see government. And that is because,

you know, one, because it's a brand new industry and we have to be able to respond to the dramatically changing landscape of legal cannabis. You know, President Biden could reschedule next week and it would completely change the calculus of a lot of our programming. You know, we could see interstate commerce before federal legalization. And that would also completely change the dynamics of how businesses in New York operate. And so we have to be prepared to respond to all these changing dynamics. There's also no blueprint for how to do this right. And I really want to stress that is that, you know, majority of other states who have launched illegal cannabis industries, they're not great industries. But even if New York is successful in all these ambitious

goals, we're talking about decades of harm that were done to minorities and marginalized communities. So I met people up there who had been arrested five, six, seven times over the course of 10 years, you know, almost every time they stepped out of their house, there was a cop there waiting for them to pat them down because they smelled cannabis and arrest them. And so people looking me dead in the eye and saying, like, you know, if you gave me a license, a million dollars, it would not make up for like the years I miss with my kid. What you're doing isn't enough. And so I've had a lot of those interactions with not, you know, and these aren't young people.

These are 50, 60-year-old men who are who have been struggling to get back on track ever since some of those arrests. I think about them a lot of my work because it just makes you want to go harder. This is Koss Marte. When Damien talks about people who have been repeatedly arrested for plot, with police, for instance, waiting outside their houses to catch them, this is kind of who he's talking about. Koss was arrested multiple times for drug dealing and even went to prison for many years. I grew up in a neighborhood that I was being stopped multiple times per day sometimes.

It was a normalcy where I could just be walking to school and have a bag of weed on me. And I'm being placed on the wall, now being searched, now being incarcerated, now going through the system. I've been arrested nine times total. and it became something that I felt normalized, but also traumatized in a sense, because I had to find better ways to hide my weed. If I were grown up probably in scars there in Westchester, I would not worry where I would carry my weed at.

You know, sometimes I had to hide it in my underwear or, you know, stash it in different spots because I felt like, all right, there's a cop there. I gotta be careful, you know? Or I gotta walk a certain way, or I can't even smoke in the streets. Even today, when I walk down and I see a NYPD officer, I feel like I'm doing something wrong because I was targeted so many times.

I mean, I got stopped by cops over 200 times. I served a total six years in prison for dealing drugs, for dealing marijuana. It was troubling because I feel traumatized. This has not only affected myself, but also the family members that I had to experience this by visit me in Rikers Island multiple times. My son who grew up talking to me through a payphone while I was incarcerated, it's just a crazy system. When Koss got out of prison, the former drug kingpin transformed his entrepreneurial experience and his newfound appreciation for working out into a gym business called Con Body. Then he watched as New York made announcement after announcement about its legal weed plans.

I went into prison for running a multi-million-drued drug business. We had a delivery service generating about $5 million of revenue. I was profiting about $2 million myself between my partner and I back then. And I was sentenced to seven years in prison. And what we did, we had a delivery service. We had dispatchers. We had runners. We had even texters individuals that we had to hire so we could do personal text messages

because we didn't have these touchscreen phones like today where we could send a text message right away. We had to literally hold on the number two to spend, it's a spell the letter A, you know, and that took three seconds at a time. But that's why I went to prison. I believe we're in a great state right now. There's no other state that has given an opportunity at first dibs for formerly and crushed individuals to be the first ones to market. We've seen this time and time again where we see other states make the decision very complicated for people that have been justice impacted to get involved with selling cannabis. And New York State is doing the reverse. They're allowing individuals that have been convicted, also have previously ran a business,

be first in line and be first in line for a while. They're not letting anybody else get in the industry for a year after we get in it. So, I mean, I think it's a great opportunity for us to jump on board. I was very excited to get on board early. I've been talking about criminal justice reform, marijuana reform for a very long time. I had a particular friend that was asking me to work and run one of his dispensaries in the state of Massachusetts, but they were not allowing me to work there because of my criminal record and conviction for cannabis. And so it was like a catch-22. I'm an expert in the field, you know, from my past experience, why can I do this? And they changed that in Massachusetts today. Now they have a social equity program over there. But back then, I'm talking about five years ago,

started first rolling this out, it was just deterring. And I started speaking on panels behind it. And I saw, like, I wanted to get into this industry and advocate for people that have been justice impacted to be in there first. I thought it was really unfair for these big corporate, usually white men to run the industry when they had no experience in it. And they're just looking to make a dollar. And this was a platform where we could be a voice for the formerly incarcerated, to be a voice for individuals that been affected, whether it was being arrested or having a family member convicted for this and having them deal with the, I would say, collateral consequences.

Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real, lots of firms throw a couple flashy funds your way and call it a day. But on Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients.

We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com slash audio. That's vanguard.com slash audio. All investing is subject to risk vanguard marketing corporation distributor. Thinking about buying the right home, but not sure when.

What if you had the right design, the right lot, and finishes at the right price? Not someday, but right now. Register at democrat homes.com and get everything you want right now. So years after serving that seven-year prison sentence for dealing, Kasa is still in the drug business. He's still a dealer. The difference is, now it's legal and he has a business called Conbud, and a team behind him.

Meet the Conbud co-founders, Alfredo Anguera and Junior Martinez, and together they've applied for and received a New York City license. My name is Alfredo Anguera. I am an attorney. My background predominantly was an economic development, also assisted inmates on Rikers Island,

doing their pro-stay litigation motions, did a variety of things, which ultimately led into me doing real estate and business. Currently, we own a couple of restaurants in the Bronx, and now one of the founding partners, of con butt and hopefully we'll be opening up a dispensary very soon. My name is Junior Martinez. I come from the hospitality industry, multiple restaurants throughout New York City,

Bronx, Manhattan, real estate background, and born and raised in Harlem. When New York rolled out and legalized marijuana and started rolling out the guidelines, initially it spoke right to us. And once they started dishing out guidelines on their, giving first option over to formerly convicted individuals of marijuana, cause Alfredo and I were sitting in the room, and immediately we said, you know, let's go for this. Let's join forces and apply for one of these licenses. And hopefully we could get it because our qualifications were exactly what the guidelines were written for. And so they teamed up with cause.

Cannabis is a billion dollar industry. Stop, period. Right? We all know this. So to get the opportunity as a business to get in on the ground floor on a billion dollar industry is huge. That's the changing of generational wealth for individuals who were impacted the most, for the individuals and the families who suffered the most from the war on drugs. So getting the opportunity to get in on the ground floor on that is game changing for everyone. New York State, the current state of the cannabis market in New York State has been a little bit topsy-turvy, and that's because they're going. at it fast. They have a social justice mission. They understand what that mission is to them, but to execute that in the time frame that they want to execute it, there are a couple of loose ends, but they have a strong framework. We asked them what the transition between a legal

dealing and legal weed selling is actually like. Because on the one hand, you can imagine guys like Coss have lots of experience with their product, but on the other hand, you have to imagine that some of the bureaucratic red tape and things like paying taxes are brand new. And plus, of course, they're still competing with the illicit sellers that we talked about on episode one. There's a lot of transferable skills that I'm using from the streets to the league of game. I think the biggest differentiation is taxes. Now I'm paying government taxes. But, I mean, I had to learn what the product was.

I had to be educated on what is going to be doing to the consumer. I had to market it. I had to brand it. I had to do PNLs in a different type of way. I mean, today I obviously know how to read a balance sheet and a PNL. and how investment works. And in the streets, you know, it was a totally different way of investing. You know, maybe you get a friend who gives you some money and you pay them back after time.

It's a handshake deal. It's different when you're dealing on the corporate side, when you have legal paperwork to follow. I mean, there's a lot of differences between both of them, but a lot of similarities and a lot of things that I could carry over from what I learned in the streets to the legal market. I have to pay insurance for my workers. I have to make sure I have my work in comp. I have my labor overhead. I have my inventory overhead. I have my taxes on a business level. It is an unfair and unbalanced scale. Aside from the business aspect, as Scots had spoken to, it is a health issue, right? You don't know what you're getting. I'm from the Bronx, born and raised. My business partner is from Harlem. My other business partners from LES, and we're both Afro-Latino. That's how I identify. We, We all identify as Afro-Latino, which for those who may not know is black and Latin. So we're from the hood. And, you know, I grew up with nutcrackers, people selling alcohol out of a cooler on Dyckman.

And I never took one because that was made in your bathtub. I really think that, one, those of us that have sold weed before illegally, it'll be very hypocritical of us to really knock it down. On the other side, if the state is coming in and giving you an opportunity, to make money legitimate and giving you the resources there to transition from a legacy black market into a legitimate business, then it's very foolish of you to not take that route and be able to convert quickly and rapidly into a legal market where you could potentially build a multi-million, multi-billion dollar company. And that's the route. that we have chosen.

In general, though, the Conbud team is excited for the opportunity and for what the future potentially holds. We actually spoke with them just after President Joe Biden announced a pardon of federal convictions for simple marijuana possession offenses in late 2022. It's a big deal for people like costs. Criminal records for marijuana possession have led to needless barriers to employment, to housing, educational opportunities. And that's before you address the racial disparities around who suffers.

the consequences. While white and black and brown people use marijuana at similar rates, black and brown people are arrested, prosecuted, and convicted at disproportionately higher rates. So today, I'm taking three steps to end this failed approach. First, I'm announcing a pardon for all prior federal offenses for the civil possession of marijuana. President Biden's pardon affects more than 6,500 people who were convicted for cannabis-related crimes between 1992 and 2021. I mean, what Biden has done, I think it's an incredible start. Still a lot of work to be done.

He basically said he's going to release and part in all the individuals that have minor offenses. No one in federal prison has minor offenses. If you went to the feds, you probably got caught with a lot of stuff. You know, so first and foremost, I don't think anybody with any amount of marijuana should be sitting in federal prison. Moving it from Schedule 1 would be a huge. huge impact. I mean, if they could change that, it could change a lot of stuff. We could talk about

like Safe Banking Act where we'll be allowed to make transactions with regular bank. We had to sit with multiple banks and they're charging us a crazy amount just to hold our money if we open up the dispensary because it's federally legal. So it'll be a huge move if we can make that happen on the Biden side, I feel like it's an incredible opportunity no matter what. I feel like New York State is giving out some sort of reparation for the wrongs that they've done to people that have lived in these neighborhoods and people of color who've been targeted for years. And on Broadway, in downtown New York, there's a glimpse of the future. There's a line of people snaking outside.

of housing works, a charity dedicated to helping people affected by HIV and homelessness, you might be asking yourself what the connection here is with weed, and the answer is destigmatizing drug use. It became the first legal recreational cannabis store to open its doors in December 2022 after getting a license from the state. It's been consistent. Business, I can't speak exactly to the amount of money that we've generated, but rest assured, we have, we're about 150% to our plan. We're killing. our goals daily and monthly, and I'm really shocked by how much revenue we've generated over the past two months. It's really impressive, and I'm happy that we're doing this for our cause.

Sasha Nugent is a retail manager and Budmaster at Housing Works Cannabis Company. The dispensary is located just blocks away from Washington Square Park in Manhattan, where the illicit market is thriving, and sellers like Charlie from episode one are selling product that's unregulated. And although business is going well for Housing Works, Sasha says, there are still challenges. Number one, I don't know if people know as far as New York regulations go, we can't do indoor grow. And I think that many customers are looking for that indoor grown cannabis from like a market

like Los Angeles or California, rather. New York is all outdoor grown. So that's kind of like eating at some of our profit. We have people who are diehard cannabis consumers that they love the cannabis from California and it doesn't compare allegedly to the New York market. So that's kind of a challenge that we have. Also, like the price points, we don't have it in our power to drop the price as low as the gray market area does. But we can guarantee that you're getting quality flour that's been tested for mold and pesticides.

And you don't have to worry about it being tainted by with anything else. So there's an upside with us having those regulations in place. But the downside is that we don't have as vast as a menu as the gray market areas do. Not only has this dispensary seen competition from the legacy illicit market, but meeting their own customer demand has been difficult. There has been a struggle to meet demand, and that is due to there being, I think, only six labs that are open in New York State that are doing the testing. And so that becomes tricky when you have really large purchase orders to fulfill and the tests aren't coming back on time. So that is something that we ran into several times, actually. And also another factor like the weather, for example, we placed a purchase order for more edibles and more vaid pens.

And because they're upstate New York, there's a huge Northeaster, winter storm advisory. So that kind of creates an issue with us getting our product on time and keeping product in stock. Sasha says she's experienced challenges with banking. Many of the weed trucks like the one we were at earlier in this episode use creative workarounds to be able to charge customers using payment systems like stating cookies or Chinese takeout on the receipt, because cannabis is still a Schedule I substance, many banks just don't want to touch it. It was difficult finding a bank that would process our transactions. Also, we did run into an issue with our payroll provider that we work with throughout

housing works, not accepting our payroll because of cannabis. So we had to find somebody who would support. That was actually very tricky to navigate. That's another thing that, you know, if it's federally legal, we wouldn't have to deal with. I mean, that would be incredible because then we would be able to expand our menu, expand our partnerships with vendors and cultivators. Aside from generating a lot of revenue, it would just be an overall positive thing, I think. It may be that New Yorkers have to sacrifice California-grown weed in the name of both social justice and tax revenue.

But for many, that may be a reasonable price to pay in return for a safe and regulated market. So, Joe, we have reached the end of Paula. I'm really glad we did that. I found out to be a very fascinating conversation. It's, you know, it's one of those things where I think people can imagine. It's like, yeah, we're going to open this new industry. There's lots of demand for it. It's going to be worth billions. It's going to be worth a lot of money. It's going to create jobs. It's going to create tax revenue. We're going to have an opportunity to redress the wrongs of the past. And it's, I guess my big takeaway is that's way easier said than done. Absolutely. I also think there's an interesting tension here between some of these social equity ambitions that New York has stated and actually letting some of those smaller scale dealers out in the open. This is something that the weed seller we spoke to in Washington Square Park actually brought up this idea that, hey, like if you're talking about true social justice, letting this guy who was in jail who used to be in shelters sell openly on the street and basically make a living, That's one way of doing it. Yeah. And then the other hand is if they're going to, I guess the way I'm thinking about it is they clearly want the sort of the new legal licensed dealers to succeed. And I think it's really important for the state and for the ambitions that they do succeed because, I mean, think about how perverse it would be to imagine you have people who have come out of marginalized communities.

Many have spent time in prison. Then they go through this long process of trying to get a. license, trying to get a place, significant legal costs, et cetera, it's pretty important for the state to just put them in an opportunity to succeed so that they're not further falling back or not further, like, you know, massive personal cost they're facing. My other big takeaway, probably the biggest takeaway from talking to everyone here, is that this is still all developing out in the open and tomorrow we could wake up and maybe there is that big change on a federal level, which immediately changes everything.

To my mind, like, that's still the huge sort of like market structure game changer. And I think back to some of the things we talked about with Craig Wiggins and some of the investors like, we're nowhere close to having a Coca-Cola of cannabis for better or worse because every state is basically has to be within state and there's no national brands and all kinds of issues that arise with payments, cross-state imports and exports. You know, there's still the whole challenge of the fact that the unlicensed shops have access to California product that the license don't, all kinds of like very interesting, tricky market structure issues and the lack of federal legalization still just seems like this huge problem,

even if in a scenario in which all 50 states eventually legalized it. Absolutely. Well, on that note, shall we leave it there? Let's leave it there. Potlots is a special limited run mini series presented to you by Odd Lots Lots. I'm your host, Tracy Allaway. You can follow me on Twitter at Tracy Allaway. And I'm your other host, Jill Wisenthall, follow me on Twitter at The Stallword. And for more Bloomberg coverage of the legal marijuana industry, you should check out the dose. Tiffany Carey's weekly newsletter about the business of cannabis and psychedelics. Subscribe at Bloomberg.com. Potlots is written and reported by me, Tracy Alloway, Carmen Rodriguez, and Joe Wisenthall.

And it was produced by Carmen. She is found on Twitter at Carmen Armin. Our associate producers are Dashel Bennett. You can follow him at Dashbot and Moses Adnan. The awesome intro in soundscaping was engineered by Blake Maples. Special thanks to Sage Bauman, our head of podcasts, Jilda DeCarly, Jacqueline Kessler, Carly Snyder, and Molly Nugent. Thanks for listening. The news doesn't stop on the weekends.

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