I was recently in New York and saw the future.
Two visions of the future, in fact.
One involved the New York Yankees who, at least on the day I saw them, sure looked like a World Series team as they blew past the Boston Red Sox.
The other involved all the cannabis stores I saw.
New York, like Virginia, has now legalized the personal possession of marijuana. And New York, like Virginia, has not yet established the rules for a retail cannabis market. But New York, unlike Virginia, already has stores openly selling the devil’s lettuce.
How can this be? Well, apparently the answer is “it’s New York.” Especially “it’s New York City.” Forbes, that august voice of business journalism, reports that “dozens of shops have blossomed around the city since the state passed legalization.” By dozens, at least 52 – because that’s how many cease-and-desist letters the state’s Office of Cannabis Management sent to unlicensed shops in early July. This is apparently on top of an earlier batch of cease-and-desist letters the office sent out in February. And clearly, the stores are still there. Forbes goes into great detail about some of the creative ways some businesses are getting around the law – such as giving away pot for free with the purchase of some other item – but the bottom line seems to be that while the office in Albany can send out letters, police in New York City just aren’t very concerned about weed stores – they’ve got bigger problems. You’re not supposed to be smoking marijuana in public, either, but I saw several people doing just that, and smelled evidence of a lot more. In Herald Square, the aroma of cannabis overwhelmed the smells from the nearby foot cart. I don’t know if the mask I wore was effective against COVID, but it sure wasn’t effective against cannabis.
Now, that’s New York, and maybe not every lesson there is applicable to us – but some might be. I took the opportunity to inspect some of these weed stores – I perused only, I did not purchase or partake – and came away with some observations that Virginia might want to keep in mind as it sets up a retail market.
- How visible do we want cannabis stores to be? The ones I saw in New York had storefronts that ranged from what I’d call classy to gaudy, which maybe sums up everything in New York. The NY Smoke Shop on Fifth Avenue was certainly the latter, with at least three marijuana plants featured in its logo and two more in neon lights in the window with the sign “THC,” the shorthand for tetrahydrocannabinol, the chemical in the plant that produces the high. There was no doubt what was being sold there. By contrast, three years ago I was in Toronto, a year after Canada legalized pot nationwide. In Toronto, I saw lots of stores with marijuana leaves in their logo, but they all turned out to be stores selling hydroponic supplies or other paraphernalia, not the actual weed. By law, the actual pot stores there were virtually signless, to the extent that I never saw any that I’m aware of. They seemed as well-hidden as an old-fashioned nip joint. That difference between Toronto and New York provides a good range for Virginia to think about. Are we OK with flashing neon pot signs? Or, conversely, are we OK legalizing a business and then making it almost impossible for customers to find?
- Do we want to regulate hours of operation? This gets into all sorts of philosophical territory, and might challenge all ideologies. Conservatives normally decry “burdensome regulations” but are the least keen on cannabis – so should their operating hours be left to the free market or dictated by the government? Decisions, decisions. I ask because, while New York is famously “the city that never sleeps,” when I walked down Fifth Avenue late one night I saw all the retail stores shuttered – except for one. You can guess which one. An internet search for “best weed shop in New York” on Yelp – yes, there is such a category – shows one that’s open until midnight and another that, indeed, never sleeps. Will we have all-night weed stores?
- Will we allow weed delivery? You can get just about anything else delivered straight to your door, so why not weed? I saw lots of signs for cannabis deliveries. “Need Cannabis Delivered? We Deliver Fast & Safe. Text MENU to …” My personal favorite advertised: “Don’t Get Up …” Indeed – don’t get up, weed up! Again, this involves some philosophical choices that may trouble some conservatives. You want to keep regulations light? You want to encourage entrepreneurship and innovation? Then allow weed deliveries. Or do we want stricter regulations on who hands off the stash? If we allow deliveries, I see opportunities for some enterprising pizza shop – “pizza and pot.” (I noticed some of the weed stores in New York carried a healthy inventory of unhealthy snacks – munchies!)
These are hardly the only regulatory issues Virginia needs to decide. They may not even be the most important ones; these are just the ones I noticed from the stores I saw in New York. When Democrats controlled the Virginia General Assembly, they wanted to give a preference in licensing to people who had been previously convicted of marijuana offenses, as a way to make up for that. New York’s legislature, also controlled by Democrats, has done the same. Virginia Republicans thought that was nuts. They didn’t think people should be rewarded for breaking the law, even if that law is now gone.
If Democrats had retained control of the General Assembly, they’d have surely passed a bill this year setting up a retail market – that was the plan. Instead, Republicans won the House of Delegates (and the governorship) and that complicated everything. You’ve got some Republicans who don’t think we should have legalized cannabis at all; you’ve got others who are OK with that but just have philosophical differences with Democrats on how to do it. Democrats want to use this new market as a way to promote “social equity”; Republicans are, by nature, more free market-oriented and not as inclined as Democrats to meddle in who gets licenses. The bottom line: Attempts to pass a retail cannabis law this year collapsed and it’s unclear when Virginia will do so. So for now Virginia is in a gray zone: You can grow some pot plants for your personal use, but you can’t buy and sell the stuff. Since not everyone has a green thumb, there’s still a market for pot – most likely a bigger one since there’s no longer a penalty for carrying around a few joints. In effect, by failing to pass a law governing a retail market, Virginia has enabled a bigger black market for pot. (If you’re a true libertarian, this is nirvana: No regulations of any kind!)
New York has effectively done the same thing, though. Not everyone wants to shop at a weed store. As I sat in Herald Square, chowing down on my food cart gyro, I was approached by a young woman who asked me if I had any marijuana. I was wearing a Highland County hat at the time, which features the initials “HC” on a maple leaf. She mistook that for a marijuana leaf and “HC” as part of “THC.” To her disappointment, I was not a man of commerce and she went off to find someone who was. That brings up another issue Virginia will have to figure out: how to tax marijuana. Tax it too much and your friendly (or not so friendly) neighborhood drug dealer will have a market advantage. It’s easy to raise “sin taxes” on cigarettes because we don’t have people selling dime bags of tobacco, but there’s a well-established marijuana market already that the state would like to put out of business.
In a previous column, I wrote about a regulation I’d like to see Virginia adopt: Limit cultivation of cannabis to rural Virginia. Most retail marijuana in other states is grown indoors. Outdoor-grown – “sun-grown” in the industry lingo – cannabis is said to be preferred, but economics and weather rule: You can grow cannabis indoors year-round, and under controlled conditions. In other states – notably California and Colorado – that means cannabis mostly gets grown indoors in metro areas. After all, that’s closer to the market. I’m showing my regional bias here but is Virginia OK with legalizing an agricultural product but then having it grown in the urban crescent? Rural Virginia has a hard enough time as it is – now we want to deprive rural Virginia of an agricultural opportunity, as well? If you believe in protectionist trade policies, here’s an opportunity to think globally and act locally. Whether cannabis is grown indoors or outdoors, what if Virginia limited production to certain localities that meet certain criteria for “economic distress” – which, by definition, would put most of the production in Southwest and Southside? Again, this may pose a philosophical challenge for some of our Republican legislators: Here’s an example of some heavy-handed government regulation that would benefit their districts, jobs-wise.
That thought sets up my final observation from my New York trip, which doesn’t deal with regulation but with a market opportunity. Some of the weed shops made a big deal about associating their wares with California or Colorado. The NY Smoke Shop sold a strain called “California Gold.” Another had a big sign advertising “Colorado Cannabis.” The place names California and Colorado apparently carry some cachet among cannabis connoisseurs. I suppose it’s no different from Tennessee whiskey or Kentucky bourbon or even Franklin County moonshine.
This makes me wonder: Do we have a marketing opportunity to establish Appalachian cannabis as a preferred variety? This is simply a branding exercise – I have no idea if Appalachian cannabis is or will be superior to any other strain, just as I have no idea whether Franklin County moonshine is truly superior to any varieties distilled in neighboring counties. However, I know that the singer Steve Earle, with his classic “Copperhead Road,” has already established the mystique of mountain-grown marijuana in pop culture:
Done my two tours of duty in Vietnam
I came home with a brand new plan
I take the seed from Colombia and Mexico
Just plant it up the holler down Copperhead Road
More recently, the bluegrass singer Molly Tuttle has plowed the same fertile ground with her current hit “Dooley’s Farm”:
In the Blue Ridge mountains
With the whispering pines
They used to grow tobacco
Then they made moonshine
But there’s something better
In the back of the barn
Down on Dooley’s farm
Pop culture is doing our work for us. All we need now is someone to more formally market Appalachian-grown cannabis as the new standard. As Tuttle sings:
He’s got a strain that’ll punch your lights out
Old Dooley’s gonna blow your mind
We just need two things. First, for Virginia to make it possible for cannabis to actually be grown in Appalachia. Second, some marketing expertise. Maybe we’ll wind up looking to New York – and Madison Avenue – for cannabis advice, after all?