New York's cannabis dispensary program: A fresh take on reparations?

Lenore Elfand, co-owner of Empire Cannabis Clubs — the self-proclaimed first cannabis dispensary in New York City — knows firsthand the damage that the war on drugs inflicted on whole families for decades. Elfand’s brother and father, who are two of her partners in the business, spent a combined 12 years behind bars for growing marijuana at a time when it was illegal.

“It didn't just affect all the men in my life — I raised my brother's children until they aged out,” Elfand told Yahoo News. “So it affected everyone, [including] me, my mother, the kids. This social injustice doesn't just affect the people that go to prison. It's a family issue.”

Marijuana was legalized last spring in New York, and as yet, no applications are being accepted for recreational cannabis dispensaries. But Empire has operated as a not-for-profit membership club in Manhattan since last September, which allows the business to circumvent current laws that permit the use and possession of marijuana but not its sale.

“It's a business model that is based on the legislation,” Steve Zissou, Empire’s attorney, said.

Now, with the announcement this month that New York will give priority to those convicted of marijuana-related offenses or their relatives when licensing its first 100 legal cannabis dispensaries, Elfand is cautiously optimistic that her family will be near the front of the line.

“There's a lot of work to be done, and hopefully we can come together with some lawmakers and make it happen," she said. "Because New York City alone is going to be the biggest market in the world.”

New York state is trying to promote social and economic equity in its projected billion-dollar industry, according to Chris Alexander, the executive director of the state’s Office of Cannabis Management.

Despite roughly equal drug use rates, Black and Latino Americans are four times more likely than white offenders to be arrested for marijuana in New York, according to data compiled by the New York Times. Black people also remain more likely to be arrested than white people for marijuana possession in every state, including those where marijuana is legal, data from the American Civil Liberties Union shows.

Pot is now legal in 18 states and Washington, D.C., and Alexander hopes that New York can avoid the missteps in other states, where the profit from legal weed has mainly accrued to wealthy white people, or large corporations have been able to swoop in and take control of the market.

Some states, like California, have created social equity programs for legal marijuana, but they have often blocked out or further harmed the communities they were initially put in place to serve. A Los Angeles Times review found that less than 8% of cannabis licenses went to equity applicants in the state’s largest jurisdictions — while many potential applicants went broke trying to adhere to the required regulations.

“There is no blueprint, but to have a different outcome we have to do things differently,” Alexander told Yahoo News. “We have a real opportunity to make some change.”

It won’t be so easy for just anyone to open a recreational dispensary. Requirements include establishing New York residency, providing proof of prior ownership of any legal business for at least two years, and an expectation that licensees will pay a producer/dispensary license fee that costs in excess of $200,000 biannually, as laid out in New York Senate Bill S854A.

Cannabis is expected to bring in an estimated $436 million in tax revenue to New York, according to the Marihuana Regulation and Taxation Act (MRTA). In January, New York Gov. Kathy Hochul announced a $200 million fund to aid new businesses, with most of the money likely to go toward purchasing and renovating storefronts across the state.

For Alexander, it seems only fair to ensure that those who have once been criminalized for cannabis get the opportunity to benefit from the newly legalized, and profitable, industry.

“The folks who've been the most impacted should go first,” he said. “And it makes sense to build the foundation of New York's market with folks who have real business experience. These are folks who have been battle-tested. They've demonstrated that they know how to run a business in the financial capital of the world. They are the perfect applicant to start and build our industry.”

Ernesto Castillo and Joel “Tellie” Collado are two applicants who would seem qualified. As co-owners of El Puré, a marijuana delivery service based in upper Manhattan that’s served all five boroughs for nearly 20 years, they see New York’s latest law as an opportunity to take their business from behind closed doors into plain sight. After at least nine stints in jail between the two of them for previous marijuana convictions, Castillo and Collado told the New York Daily News that they feel they finally have a chance to become legal businessmen.

“Our elders looked at us as drug dealers,” Collado said to the newspaper. “Now, they are proud of us. We were corner kids that were written off. Now, we are Harvard kids without a Harvard degree, for real, and now, we’re playing by the rules.”

Criminal justice reform advocates are praising New York’s approach and urging other states to follow its lead.

“Marijuana criminalization is a textbook case for how structural racism and white supremacy are deeply embedded across laws and policies in our state,” the New York Civil Liberties Union's Toni Smith-Thompson, a senior field organizer, and Yusuf Abdul-Qadir, a senior racial justice policy strategist, wrote on the organization’s website last year. “Our state has been a national leader in mass incarceration. Now we can be a leader in repairing those harms.”

“New York here is taking a really bold and innovative step that hopefully will be able to be a model for the country,” Melissa Moore, the civil systems reform director for the Drug Policy Alliance, a nonprofit that lobbies for alternatives to drug criminalization, told Yahoo News.

“You can't look at decades upon decades of devastating policy in the harm that was done to individuals and communities and say that a handful of licenses is going to cover that devastation,” she added. “We can do as much as possible within the vehicle of this bill to make sure that we're not just moving forward business as usual.”

The MRTA also will expunge the records of those previously convicted of marijuana possession and ensure that at least 40% of the tax revenue is reinvested in communities that suffered disproportionate harm from the so-called war on drugs.

But some of the finer details of the law, which includes prohibiting vertical integration — in which businesses would own every aspect of the supply chain, from growing to selling — give some marijuana entrepreneurs like Empire pause, because already existing medical cannabis businesses would be allowed to keep their current vertical integration.

“Our concern is the lack of simplicity when it comes to allowing this to flourish amongst the people that it hurt the most,” Julio Brinez, the fourth co-founder of Empire, said. Brinez, a Bronx, N.Y., native, says he’s seen all aspects of the war on drugs and finally wants to see the “regular person” win.

Zissou, Empire’s attorney, sees the continuation of vertical integration licensing for medical cannabis companies as the biggest hurdle for future recreational dispensary owners. If the current medical companies are able to control their own market, Zissou believes they will be able to dictate lower prices and control of the cannabis product, eventually creating a monopoly in the industry.

“What is likely to happen in New York is that the billionaires are going to take over this industry, which is where the real fight is,” he said.

But not all business owners are lamenting that billionaires will potentially push them out of the market in a few months. Smaller entrepreneurs, some with brick-and-mortar businesses and others without, are finding ways to flourish in this decriminalized, pre-recreational-dispensary New York era.

Small shops on Native American land in upstate New York have seen a dramatic rise in sales since they started selling marijuana. Native Americans call it an expression of sovereignty, according to NBC New York, something long overdue after centuries of being overlooked and ignored.

“We have been stepped on for so long, and to have something like this happen, it’s almost liberating,” said William Roger Jock, a partner in Good Leaf Dispensary on the Akwesasne territory, near the Canadian border.

Downstate, in the Big Apple, weed entrepreneurs with small folding tables decked out with various displays of edibles and marijuana flowers are starting to set up shop without fear of being arrested. While police have largely turned a blind eye to smaller sellers, New York considers recreational marijuana stores already to be unlicensed and illegal.

“We ain’t worried about nothing,” one outdoor merchant in Washington Square Park, in Manhattan’s Greenwich Village, told Forbes. “Weed is legal, and as long as you have a street vendor’s license, you’re good.”

“I saw firsthand what New York's laws did to people,” Zissou, a former New York City prosecutor and now a criminal defense attorney, said. “So if, with my last breath, I can try to make that better, I’ll die smiling.”