How Much Will It Cost To Get Into The New York Medical Marijuana Industry?
There is a trend in the emerging medical marijuana industry. The newer the state is to the medical marijuana world, the more expensive it is to crack into that state’s medical marijuana industry. The prime example right now is New York. New York passed a very restrictive medical marijuana bill, and set a very small cap on how many medical marijuana licenses would be granted. There will only be five dispensary licenses for the entire state. That has led some to speculate that the price tag for one of those licenses will be enormous. Per the New York Times:
The competition to acquire the five available licenses will be fierce and expensive. Application costs alone could run to several hundred thousand dollars; start-up costs could top $20 million. “I would suggest that anyone who wants to be serious be prepared to spend at least a million dollars” on an application, said Evan Nison, 24, a lobbyist and consultant for cannabis companies and a founder of the New York Cannabis Alliance, which advocates changing the state’s marijuana laws. Richard N. Gottfried, a Democratic state assemblyman from Manhattan who led the long fight to legalize medical marijuana, cited an unwritten formula of government regulation. “When you make a statute very restrictive — and the governor did that in the last hours — you raise the stakes and create a need for more lawyers and consultants,” he said.
Out-of-state firms able to show they have run successful cannabis operations elsewhere will have an edge in the licensing process. But any hope for quick profits will be limited by the small number of conditions for which New York is allowing the drug’s use.
Still, the arrival of medical marijuana opens the door to a potentially huge market, said Derek Peterson, 40, a former senior vice president at Morgan Stanley Smith Barney. Mr. Peterson now heads Terra Tech, a publicly traded company that already operates a five-acre hydroponic growing facility in New Jersey turning out basil, kale and other produce while awaiting the opening of more local dispensaries, which Gov. Chris Christie opposes.
When a state passes a bill as restrictive as New York’s, and limits the amount of people that can be involved in the industry, the end product is bad, and patients are left to suffer as a result. That’s how it has played out in New Jersey where supply shortages are normal, and the meds are subpar. Unless New York changes their program to allow more people into the industry, it will follow in New Jersey’s footsteps. Licenses shouldn’t go to the highest bidder, but because more often than not, the highest bidder has no clue how to grow or sell medical marijuana.