New York: Who Needs A License?

Photo: Shutterstock

Stores that offer recreational marijuana might not be entirely legal yet, but entrepreneurs are ready to start righting the wrongs of the war on drugs

The most hyped weed spot in upper Manhattan right now is a hitched trailer parked on the side of a busy intersection. Approach its dual windows during daylight hours and, under an LED banner, you’ll find two friendly brokers of THC tidings ready to dish out bags of pot or edibles for the correct amount of cash. A whiteboard behind them does not list prices, per se, but “Suggested Donations,” starting at $20. The packages offered in return are thank you “gifts.”

“We don’t sell anything,” says one register operator at Uncle Budd’s weed truck, speaking under a condition of anonymity. “Every donation is going back into the community.”

Uncle Budd’s, he says, organizes charitable events, like Thanksgiving turkey giveaways. Another goal is to educate people in the neighborhood about the health benefits of marijuana consumption. But the most vital community service that the Black-owned business provides, according to the cashier, is the employment of local residents. There are two Uncle Budd’s trucks so far, and more on the way. Their owner is hiring 10 people every two weeks, the worker says, with a priority on individuals like himself who have been arrested for drug-dealing offenses in the past.

“Now that it’s turning legal, we’re trying to do it the correct way,” he says on behalf of the growing company.

But the state’s new governing bodies in charge of cannabis rules and regulations say the exchanges at Uncle Budd’s, as well as other outlets across New York that are challenging the definition of “sale” with various transactional twists, are not the “correct way” to distribute marijuana. They certainly aren’t lawful — yet.

“Illegal cannabis sales include the concept of ‘gifting,’ where consumers are purportedly buying a tangential service or commodity and getting their cannabis as a gift,” writes Freeman Klopott, spokesperson for the New York State Office of Cannabis Management, in an email to Rolling Stone. “There is no ‘grey area’ in the law on this issue.”

Though it took a while for appointments to round the state’s Cannabis Control Board (CCB) into form — delays were due in part to former governor Andrew Cuomo’s sexual harassment scandal — its members held public meetings for the first time in October. Gifting was brought up in its second gathering. A member of the board said that, while transferring marijuana between adults aged 21 or older without an exchange of money or services is allowed, when those elements are introduced, providing cannabis in the context of such a transaction is not at all lawful.

It’ll take time before the state hands out licenses to regulated distributors, as the legal landscape continues to be cartographed. Until then, pot can only be purchased legally at medical marijuana dispensaries by consumers holding appropriate clearance cards. But there are reasons for the lack of crackdowns, at least for now, on illicit pot providers.

When Cuomo announced the pending legalization of regulated marijuana sales for adult recreational use in March, possession of the substance in small amounts, like those distributed by most providers, was decriminalized. Furthermore, the sustainability of businesses like Uncle Budd’s means that more people of color have stakes in New York’s weed industry — a major point of concern ever since legislators began exploring legalization, with prior criminalization adversely affecting those communities.

“Part of the whole point of legalization was to halt some of, if not all of the racial disparities in cannabis arrests,” says Alyson Martin, co-founder of Cannabis Wire, a digital publication covering the global cannabis industry. Therefore, the state, she adds, does not want to start incarcerating people en masse for cannabis-related crimes.

“It is a business opportunity,” Martin says of the unlicensed pot peddling going on in New York, which, to be clear, is not limited to people of color. “People can make money in the time before the rules [for licensure] come out, it’s just not legal.”

Craig Delsack, a city-based cannabis business attorney, wonders about the quality of the cannabis currently on the market. He says they could be pushing hemp, the non-psychoactive strain of the cannabis plant that was legalized on a federal level when then-president Donald Trump signed the Farm Bill into law two years ago. For the flower to qualify as mind-altering marijuana, its THC levels must be above 0.3 percent.

While Martin understands some entrepreneurs may be “excited to get things up and running,” she affirms that “unregulated operators and a regulated marketplace aren’t really a great marriage.” She says it’s “buyer beware” when it comes to safety at these unlicensed outlets, because “nobody knows if they’re buying something with residual spider mites in it,” for one example of potential danger.

Delsack says, as far as legislators are concerned, “safety equals profits,” hence the regulations.

The vendors this reporter spoke to swear they’ve got good shit.

“We get it straight from the growers,” says the Uncle Budd’s cashier of its weed. “We know what we’re getting.”

The owners of Gifted BK, a gallery in Brooklyn that sells digital art and gives out pre-rolls and vials of weed in appreciation, communicate similar messaging.

“All of the product is highly tested,” says Umi, one half of the hip hop duo Dead Prez, who co-own Gifted BK. “It’s product that I stand by.”

Umi and M-1, his partner in music, art, and cannabis, say there are weed testing kits available on the premises. Umi also eagerly engages in quality control of the Gifted BK weed — which comes from trusted sources, including friends, family, and farmers — by consuming it himself.

At Gifted, a customer pays for digital artwork donated by the artist and placed in the public domain. Via QR code, the artwork is beamed to the client’s phone; the weed is tossed across a counter. Dollar figures tied to individual products are brazenly published on the gallery’s website.

“We’re trying to put our foot on the platform in a real revolutionary manner, and do it in a respectable way,” says Umi. The art at Gifted BK is in place to spur conversation, Umi says, which will “help the community see the brilliance behind the plant.”

He believes that New York State is “trying to twist the definition of what gifting is,” now that “they’ve seen some people make that popular.” Umi and M-1 also consider themselves pharmacists of a sort, who provide their community with medicine. Like the operators of Uncle Budd’s, they too will seek licensure when the state opens up the application process. (Licensure for any entrepreneur could prove challenging for myriad reasons, including potentially high costs.)

“That’s why we want to stand so firm with the law,” Umi says. “It’s important that we dance right within the lines. We try to push the lines ahead, so we may take risks, but at the end of the day, legislation has said that cannabis is decriminalized.… We’re hoping they stay true to that.”

When asked whether shadow boxing with marijuana sales laws is a prudent means of achieving eventual licensure, in the ways these outlets are, Delsack says, “absolutely, emphatically no.” He calls the idea a “false premise.”

Considering the applications for licensure in other states where weed sales are already legal and regulated, Delsack says applicants in New York will likely be asked about their experience in the industry, growing or retailing marijuana through legitimate means. “They want to see whether or not you can succeed with a track record,” Delsack says, referring to regulators. “I can’t write on my application, ‘Yeah, boy, do I know how to grow weed; I’ve been growing weed in my basement for the past 10 years and selling it to my neighbors.’ You’re not going to get a license.”

The Uncle Budd’s cashier says the owner has partnerships with marijuana farmers in California and Nevada, two states where the product is regulated and tested. This may help with consumer sales, but could put Uncle Budd’s in hot water for other reasons. The shipment of cannabis across state lines is illegal on a federal level.

Umi says, hypothetically, there could be “a situation” where someone brings a small shipment of, say, 28 grams, across state lines, and then Gifted BK would offer it to another party in the gallery as a gift. He says that would all be legal, but there are other workarounds businesses like his can employ: Strains that originated in one state can be cultivated in grow houses elsewhere, but still marketed as out-of-state products. (A writer for Business Insider hinted this ploy was afoot at yet another weed shop in Manhattan, Empire Cannabis Clubs, which offers 30 different strains, as part of a service to its paid club members.)

These businesses are at least putting up a front that, as they may break the law, they are operating in good faith — on behalf of the consumer, as well as the communities that have welcomed them into the neighborhood. One way or the other, with all the confusion surrounding the state of cannabis legality in New York, it’s important for people on both sides of a prospective transaction to be as informed as possible.

“A very big piece of this puzzle that’s missing, although regulators are working on it, is public education,” says Martin. “There needs to be a very robust public education campaign, to educate consumers about what’s tested, what’s not tested, what’s legal right now, what’s not legal right now.”

Delsack wonders if New York’s new mayor might beat regulators to the punch.

“Eric Adams, if he’s the law-and-order mayor, this might be part of his agenda.”