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Jeffrey Hoffman is a New York City-based attorney who hosts “Ask Me Anything about Cannabis Legalization in New York” each week on LinkedIn. Hoffman and NY Cannabis Insider have partnered to bring those sessions into print in a Q&A format.
Hoffman’s practice focuses on cannabis industry clients, including licensees in the adult-use market, practitioners in the medical cannabis space, and cannabis adjacent product and service providers. He has a particular interest in social and economic equity cannabis license applicants, and he also informs and assists those convicted of cannabis offenses in getting such convictions expunged from their record. He can be reached at info@420jurist.com
The following AMA from Aug. 3 has been edited for length and clarity. Hoffman’s next AMA is on Aug. 10 at 4:20 p.m.
Will GMP (good manufacturing processes) be a requirement for processors?
Yes, they absolutely will be a requirement for processors. Actually, if you look at the application for the conditional processor license, which is currently open here in the state of New York, there’s a place for you to upload your GMP certificate. And it’s very clear from the documentation associated with that license that you will have to do that if you wish to be a conditional processor in the state of New York. And anything that they’re going to require for the conditional processors along those lines, you can bet your bottom dollar that that will be a requirement for the standard processors when that license becomes available.
Thoughts on the following: Some have heard anecdotally that a significant presence of unlicensed shops, and an unanticipated lack of enforcement against these operators is going to be a major hurdle for retailers and therefore everyone else in the legal game.
All right, so I’m not so sure that it was unanticipated that there would be a lack of enforcement. As everyone knows, New York has taken probably the most justice centered, and social and economic equity-centered perspective as far as how they’re going to deal with the regulated cannabis industry in the state. I don’t think anyone expected there to be any arrests. Frankly, we’re done with incarceration for cannabis in the state of New York. And that didn’t come too soon. So we certainly don’t want to be arresting people and incarcerating people anymore.
We are definitely in what I like to call the “inter-zone” of the establishment of the regulated cannabis industry here in New York. It absolutely needed to happen, such that cannabis became legal faster than they were able to implement the regulated market and open the stores, we simply needed to make it so that no one was getting arrested for cannabis in the state of New York anymore, especially at the low levels.
Our society has done a tremendous amount of damage, particularly to individuals in minority communities, vis-a-vis cannabis enforcement, for the length of time that I’ve been alive. It’s just been disastrous. The number of families we have destroyed, the untold billions, if not trillions, in economic damage that we as a society have done to people for just the dumbest things: for arresting people, incarcerating them for smoking a joint or possessing a quarter bag of cannabis … I mean, come on, is this a joke?
But that’s what our society did for so long. So when the pendulum swings in the opposite direction, unlike a real pendulum in the world of humanity, it often swings a good bit further than folks expect it to. So for me, it was not surprising that there has been no enforcement. I talked to a sergeant in the police precinct here in New York City, where I live, and he indicated to me that they had been told, as he said, from on high that they are to be hands off. And again, I don’t think that’s surprising. New York, as a state and our country, has had a horrible relationship with enforcement of cannabis enforcement. And so we just don’t want any more arrests at this time.
Now, what is going to happen as far as this? So Governor Hochul, who if you’re in the cannabis industry, I don’t really care what your party is, you need to ensure that she gets reelected. If you remember, Governor Cuomo sat on his thumbs and did not appoint the members of the cannabis control board for the last six months of his term. We basically wasted six months, getting our regulated industry started. The very first thing that Governor Hochul did when she came into office was appoint the members of the Cannabis Control Board. You’re not going to find someone that is more cannabis friendly in our current possible slate of elected folks for governor. So I really don’t care what your politics are. If you work in the cannabis industry in New York, and you’re in favor of us having a robust regulated cannabis industry, you need to make sure that Governor Hochul gets reelected. The other people that can possibly get elected are about as cannabis unfriendly as you can get. So if you’re in the industry, give that some thought on Election Day.
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So what is going to happen, Governor Hochul has in her executive budget $1.2 billion projected over the next six years in cannabis taxes. Not cannabis revenue for the state, cannabis tax revenue for the state. And I’m a gambling man. And I’m going to take the over on that, as I think it’s going to be more than 1.2 billion over six years. And that is six years from when sales start, not six years from now, or March 31, 2021 when the law was enacted. That’s six years from when adult use cannabis sales start in the regulated market in New York. And so to get to that $1.2 billion in tax revenue, I assure you Governor Hochul cannot have hundreds and thousands of non-licensed cannabis stores all over the state. So it’s very similar to what happens in the alcohol industry. The way we are forming the regulated cannabis industry here in New York is vaguely similar to what is going on in the regulated alcohol market that we are all quite familiar with.
An example: Let’s say I decided to open a place called Jeffrey’s F-the-Tax Man Gin Joint down in Greenwich Village here in New York City. And I went to the New York Post, CBS News, NBC News, ABC News, and all of the usual media outlets here in the city and said, “Hey everyone, come on down to Jeffrey’s F-the-Tax Man Gin Joint down in Greenwich Village, we are the best gin joint in the city. All of our drinks are 40% less than any other bar you’re going to go to anywhere in New York City. And why is that? I mean, come on … licenses? Who needs a stinking license?”
Now, a question for you: How long will it take the State Liquor Authority to shut down my gin joint? And usually when I ask this question to people, most people say right away. But certainly, within the number of hours, I can probably expect a visit from the State Liquor Authority after they see me basically giving them the finger in the New York Post. And I think you’re gonna see something very similar here in New York State.
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Obviously, if the enforcement authorities don’t know that something is happening, like a legacy market participant who’s very quiet and who is operating respectfully in the way they did for the past 30 years they’ve been in business, I mean, if the Cannabis Control Board and the OCM don’t know about them, there’s really no way to enforce against them. But all of these entities that have been doing it, as we like to say, in the legal profession, obviously and notoriously, I think they’re going to have a problem, because the Cannabis Control Board and the OCM have already sent them cease and desist letters. And I think it’s only a matter of time, particularly once you see the licensing begin to happen for those nine standard licenses. And once you actually see the tax dollars flowing, Governor Hochul is not going to want these other businesses in business.
So the ones that have been very vocal about their operations and have been very public about where they’re located and what they are doing, my assessment is that they’re going to get a visit from the enforcement authorities, or it’s entirely possible that the authorities will simply send a letter to their landlord. I think the letter would say something to the effect of “Dear Mr. Landlord, we understand that there is an illegal cannabis business operating in your establishment on your premises. The state of New York has been known to seize buildings where illegal activities are taking place, we just thought you would like to know this. Love and kisses, Governor Hochul.”
And I do think that the landlord is probably going to take care of the state’s problem for them, if they choose to take that approach. But the big picture, again, there are guys that are operating without a license that no one knows about. I mean, there are certainly people here in the state of New York, operating illegal alcohol establishments without a license, and they’re being very clandestine about it, not going into New York Post and on CBS News and telling everybody about it. So if the authorities don’t know about those businesses, they can’t afford to enforce against them. But I do think those that are operating openly and notoriously, they can expect to visit at some point in the future from the authorities.
What are your thoughts on Sen. Schumer’s proposal?
The window for federal cannabis legalization in the United States closes in January 2023, so around five months from now. I do believe the Republican Party will take the gavel in one if not both houses of Congress. It does seem fairly certain that they will take the House, while the Senate does seem to be a little bit more up for grabs. I did see some release from I think 538.com that maybe it’s over 50% for the Democrats keeping the Senate but who knows. But I do think that’s going to happen. And unfortunately, as we all know, there really is only one party in this country that passes cannabis laws or does things about cannabis in a positive fashion for the industry. When I say that, I know everyone likes to bring up the lovely young lady from South Carolina that’s a member of the Republican Party that has a legalization bill. But frankly, the people in her own party think she’s out to lunch. So frankly, she should be a Democrat with that proposal.
But, I think the window closes in January, which really means the window closes here in November after the election. And it doesn’t open again, I don’t think, until 2029. I am not too terribly optimistic about the Democratic Party’s hopes for 2024. I do think the Republican Party stands the better chance than not of being elected at that time, although we’re still, you know, two years out from that. So anything could happen in those two years, I’m aware. But I just don’t think the reality of federal legalization is a very substantial possibility for those reasons.
I am totally with Chuck Schumer, incidentally, one of my senators, my senior senator, who I will be voting for again when he’s up for reelection. But I am totally with him when it comes to the fact that you really got to get everything. In his bill, he’s asking both for the business issues, like getting rid of 280 E and federal descheduling so that everybody can take credit cards in their cannabis businesses. But he’s also asking for the justice issues.
He’s asking that all the cannabis offenders get pardoned or commuted and come home. Obviously, that is something the executive branch has to do. But I do think they could perhaps pass a law dealing with some matters related to that. Perhaps encouraging Joe Biden to get off his duff and do it. But the problem is, I don’t think there are 60 votes in the Senate to get cloture. So as long as Mitch McConnell wants to not allow 10 senators and frankly, I don’t know that there are 10 senators, to get a cloture vote, I don’t think there’s a vote to be had for a bill with the justice measures. I do think there is perhaps a vote to be had on a bill that only deals with the business issues. But unfortunately, I’m with Chuck Schumer – you got to get it all. And therefore I don’t think Chuck is going to be willing to negotiate to have a more business oriented bill, and therefore unfortunately, I don’t see anything passing this term, then that means I don’t see anything passing, you know, probably for several years.
And there are good and bad things about that. I mean, I know we want to get rid of 280E. I know we want everybody to take credit cards. But frankly, I’m not so sure I want the federal government telling New York how to run its cannabis industry. I think it might be good for New York to open its regulated cannabis industry, get it up and running to where it’s established. Then we have federal legalization, such that the feds aren’t going to think about coming in here to New York, and telling us what to do.
So, you know, I think anything we get that legalizes cannabis federally and gets rid of 280E and lets everybody take credit cards and deals with the justice issues, I think is a phenomenal bill. Unfortunately, I just don’t think there are 60 votes to get it on the floor of the Senate to a real vote.
Any news or updates on Humberto’s hearing?
Yes, I have some big news. As everyone that has been following me for the length of time that I’ve been doing this series, and as excited as I am about the fact that we’re about to have a regulated cannabis industry here in the state of New York, the justice issues related to cannabis, for me that came out of the MRTA are what’s most important. That is the folks that have low level cannabis offenses are getting their convictions automatically expunged.
Once they get expunged, everyone needs to get their lawyer, or themselves if they’re not at risk of having any warrants claimed on them if they go to the courthouse, to go to the courthouse and get your certificate of disposition. That is your official record, that the state of New York has expunged your conviction and you need to keep that under your mattress. And if you go try to get a job or get housing, either in New York, where there’s a bad landlord or a bad employer that is violating New York law and asking you have you ever been convicted of a crime related to cannabis, or if you go to other states where that’s still legal, if this cannabis conviction was your only conviction, you no longer have to check the yes box. You no longer have to say that.
As we all know, if you check the yes box, that usually means you didn’t get that employment or didn’t get that housing. So everybody with the low level convictions is getting their convictions expunged automatically by the state. That happens by March 31, 2023, and either you or your representative needs to go to the court where you were convicted and get your certificate of disposition.
Now, if you were convicted of a higher level cannabis offense, your conviction is not getting automatically expunged. You need to go and file a 440 motion in the court where your conviction occurred, to try to get your conviction either vacated or otherwise modified. This is something you can do yourself. But if you’re not comfortable doing it yourself, try to find an attorney in the region where your courthouse is to assist you with that either pro bono if you can’t afford one, or hire the attorney that worked on your criminal case. But if you have too high a level of conviction, we’re not getting automatically expunged.
And then finally, we need to make sure in New York that there are not any more nonviolent cannabis offenders incarcerated here in New York, a state which profits from an activity for which it incarcerates people is committing a crime against humanity. And they are committing crimes against humanity in New Jersey, but we’re not going to commit crimes against humanity of that nature here in New York. If there are any nonviolent cannabis offenders still incarcerated in New York, I am on the case and we are going to get them out.
Now, we just mentioned that the state of New Jersey is actively committing a crime against humanity because they are actively incarcerating people, while the state is making $3 million a month in tax revenue, doing the exact same thing that they are incarcerating those people for – and that is selling cannabis.
I do have some outstanding news, however. We have been working on the case of Humberto Ramirez since May. I met Brooke, Humberto’s wife, outside the MJ Unpacked cannabis event here in New York City in front of the Hilton Midtown Hotel, and she was just trying to get the attention of anyone coming out of that big event to inform them about what the state of New Jersey is doing to her husband. And I gave her my word at that point that we were going to get Humberto out of jail. And through the outstanding work of many individuals, too many to mention here, but one of whom I will mention who had the most rubber meeting the road, as far as this went, was a woman named Kathleen Redpath-Perez.
She was previously a public defender in the state of New York and is now in private practice, and thank you to her law firm for allowing her to work with us on this. She was able to work some magic down in Cape May County, one of the most conservative areas in New Jersey. This team that we were able to put together has successfully gotten Humberto’s JOC, that’s judgment of conviction, modified. His paperwork was transmitted to Trenton, and within the next six weeks Humberto Ramirez will be released from incarceration in the state of New York, and will go home to his family, where I will be to greet him with open arms with the first blunt he will be smoking in his time coming out of captivity.
Now, it just does seem a bit odd to me that New Jersey does have this requirement that you have a 42 day waiting period for the state to notify any victims of the crime for which the individual was incarcerated. I mean, let’s get real here. Who are the victims of Humberto Ramirez? The crime was that he was in possession of six pounds of cannabis. There was nobody that was a victim of his crime. Okay. So the fact that we have to wait the extra 42 days is frankly ridiculous, but it is what it is in New Jersey. I think the next thing we’re going to do is see if we can make it so that any nonviolent offenders and non-theft offenders, people that are incarcerated for things like Humberto was incarcerated for, just go home. But currently the way it works is they get six weeks to notify everybody. But again, the fantastic news is Humberto Ramirez is going to go home to Brooke and his children. Probably at some point in September and I can’t wait to be there to welcome him home.
What, if anything, is New York State doing to provide legal spaces for the consumption to directly combat landlord and other direct opposition to prevent residents from legally consuming, such as social consumption permits legislation preventing adverse action, etc.?
Particularly here in New York City, there are a number of housing developments that are federally funded, where the residents almost certainly will not be able to smoke cannabis as openly as the rest of us will be, they will potentially face eviction, because of course, in a federal facility, it is still illegal to possess or smoke cannabis. This is why it was so brilliant and so important that the way cannabis was legalized in New York, allows it such that you can smoke cannabis anywhere in the state of New York where it’s legal for you to smoke cigarettes. We are the only jurisdiction as far as I know in the world where it is completely legal for you to smoke cannabis like that in public.
So this idea, I think, was very important to the legislature because they thought about it right. We have a very smart legislature here in New York. Regardless of some of the fluffles that they have, we have a very smart Cannabis Control Board and a very smart OCM.
And they’ve been thinking about these things smartly, and implementing smart policies about this. So again, number one, you can smoke cannabis anywhere in the state that you can smoke a cigarette. So that opens up a tremendous amount of places where individuals that live in apartment buildings where it’s not possible to smoke cannabis will be able to smoke cannabis.
Additionally, to your exact point, New York is the first state where the initial law and out of the box, we’re going to have consumption lounges, that is part of the MRTA. And part of the initial round of standard licenses coming at some point next year is going to be consumption lounges. So this is another place where individuals that are in housing where they cannot smoke cannabis will be able to go and will be able to smoke cannabis. And for any other folks in New York that are living in places where you can’t smoke cannabis, my recommendation is smoke outside where you can also smoke cigarettes, go to consumption lounges and make a lot of really good friends that live in houses or apartments where they can smoke cannabis. I happen to live in an apartment building where smoking is allowed in your apartment. So, you know, the party’s at my place, I guess.
That is what New York State has been doing. I think it’s a really forward thinking way to think about what they’re going to do. But it is what it is, right? We’d love it if everybody can smoke cannabis within their own home. But obviously, in places that are federally subsidized, and in apartment buildings where the policies of the building say no smoking at all, you’re just not going to be able to do it there.
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