In September 2014, New York became the most recent state to pass legislation legalizing the use of medical marijuana. Signed by Gov. Andrew Cuomo, the Compassionate Care Act allows doctors to prescribe the use of cannabis to patients with predetermined ailments in order to qualify. The cannabis is only available to permit holders in a non-smokable form via edibles, oils and vaporizers. New York is the 23rd state, along with the District of Columbia, to address the legal access to marijuana for medicinal use, though its restrictions are more severe than several of its predecessors.
“There is no doubt that medical marijuana can help people,” Cuomo said. “We are here to help people. And if there is a medical advancement, then we want to make sure that we’re bringing it to New Yorkers.”
Along with medical legalization has come a tirade of restrictions, regulations and legal penalties for those looking to defraud the system. New York has 18 months, from the date of the bill’s signing, to create a system which meets the requirements of the approved legislation. This means that while medical marijuana has been legalized, it may be a long while before New Yorkers see it come to fruition.
Growers and distributors are waiting for their chance to enter New York’s market, where thousands of people are expected to seek medical marijuana permits from New York’s Department of Health (DOH). As part of the legislation, which takes a “seed to sale” approach, every plant will be carefully tracked and monitored to keep the industry under strict regulation. Entrepreneurs and investors have flocked to meet with lawmakers in order to finance the developing industry. This includes a multitude of businesses beyond the expected growth and distribution of the physical substance, which extends to suppliers of LED grow lamps, irrigation systems, and other profitable goods which stem from the decision.
The rush is on to secure one of the five licenses available from the state for growers. This means that small-business owners who lack the resources that some of the bigger industry players have, may not have the means to qualify. In order to be considered for a license, a company must prove they have the $2 million to back its enterprise.
Only 20 licenses will be available for distributors, under strict regulation to ensure the available marijuana is for medical use only to eligible, permitted users. This may be a serious problem given the 55,000 square miles that make up the state, and with an expected half a million New Yorkers eligible for a marijuana prescription, questions have been raised about the availability.
“We don’t love the way the New York policy works, but over time the legislation can change,” said Derek Peterson, the CEO of Terra Tech (OTCQB: TRTC), a company based in New Jersey which currently operates a five-acre hydroponic growing facility. “Even if you can’t make a significant profit now, you can invest in it for the future.”
If New York is successful in setting up a reputable medical marijuana industry, supporters are hopeful that the next step will be statewide retail legalization. The growth potential of the industry is expected to be tremendous, with the creation of job opportunities and the generation of tax revenue for the state of New York. While small businesses may not have the best opportunity to enter the current New York market, many supporters are hopeful that this is just the first step in a new, booming industry.