What are your first thoughts when you think of New York? Do you picture Times Square and all the bustle of New York City? While it’s tempting to imagine the Statue of Liberty beckoning travelers to the skyscrapers of Manhattan, much of New York is rural.
The Empire State is home to 33,000 family farms and nearly 7 million acres of farmland. It ranks top ten in the production of more than 30 staple commodities, ranging from apples to onions to dairy products.
Its temperate climate is also perfect for hemp production. The state’s Domestic Hemp Production Program has already approved over 30,000 acres for hemp farming.
While the potential for hemp is exciting, the sexier side of legalization is in the retail adult-use market.
In September of 2021, New York legalized recreational cannabis, opening the doors to an estimated $4.2 billion industry.
It has the potential to become one of the nation’s largest cannabis markets.
State lawmakers have taken a progressive approach to legalization, allowing consumers more liberties than other legalized states.
Adults over the age of 21 are allowed to possess up to three ounces of flower and 24 grams of concentrates. They can store up to five pounds in their homes and can grow their own supply with up to 12 plants per household.
Most innovative is their policy around public consumption. In New York State, if the area permits tobacco consumption, you can smoke cannabis there.
This is contrary to many other legalized states where public consumption is not permitted — which creates a conundrum for cannabis tourists.
In all, the state’s legal marketplace is shaping up to be one of the more robust and welcoming cannabis industries in the nation.
In this Tech Zone, we’ll take a look at some of the companies and innovators taking part in the Empire State’s newest economic opportunity.
New York is a Perfect Fit for Female Business Owners
Did you know companies led by women tend to be more profitable than those operated by men?
They also produce more than twice the revenue per dollar invested according to research from the Arcview Group and the National Cannabis Industry Association.
If women are so masterful at running a business, why did MJBizDaily report that in 2021 only 22% of executive-level positions in cannabis were held by women?
That number has actually decreased since 2019. This disturbing trend underlines the importance of supporting women-owned businesses, especially in developing markets like New York.
Organizations like Women Grow are vital to creating more gender parity in the cannabis sector. They can offer advice, connections, and support to help women entrepreneurs launch their businesses.
It’s an industry that may seem daunting for new entrants. Tanya Osborne, director of community engagement and digital production for Women Grow said the most frequent question she hears from women is how to enter the space.
“My answer usually is don’t reinvent the wheel; push the one you have, just in this cannabis lane,” Osborne said.
The next hurdle is funding. Osborne noted women receive a fraction of the funding showered on their male counterparts, “and it’s even less for Black and Brown women-led companies.”
That’s why Women Grow showcased more than 200 women-owned businesses on its platform in 2021. It’s also why the organization hosted the Women in Cannabis Lobby Day in 2020 and 2021 to push legalization in New York State.
“We are determined to keep opening the doors wider to help create an industry that will be filled with diverse women businesses and leaders,” Women Grow President Gia Morón said.
As more states embrace legalization, women-led initiatives are helping ease the transition from an illicit to a regulated market. Melissa Moore, director of civil systems reform for the Drug Policy Alliance said Women Grow has been key to helping people learn about the cannabis industry.
“Especially in New York, we’ve seen how attending sessions hosted by Women Grow has broadened people’s understanding of the space and how they might fit in,” Moore said.
The United Nations Development Council determined increasing female employment rates in the top 37 high-income countries to match the female employment rates in Sweden would boost gross domestic product by $6 trillion a year.
It’s numbers like these that should encourage everyone to partner with women-owned companies (WOCs).
Cannaclusive Director of Community and Strategy Kassia Graham has seen the power of such partnerships first hand.
“Through partnering with Women Grow, Cannaclusive has been able to aid in putting small, new, WOC-owned brands in the spotlight,” said Graham.
“Women Grow is helping the industry evolve by putting driven, innovative, women-owned and -operated businesses at the forefront of cannabis.”
For all New Yorkers watching the cannabis industry unfold, it’s essential to actively take part in women’s empowerment in the sector.
Buy from WOCs, invest in their ideas, and encourage them to take part in this lucrative sector. It may not be an easy path, but it’s one worth pursuing. “Rejection will not deter us, it inspires us,” Morón said.
Navigating the Complex World of Cannabis Finance
As of March of 2021, people 21 years of age and older can legally purchase cannabis in the state of New York. But legal doesn’t mean easy.
There are complex regulations in place at every stage of the cannabis lifecycle, from grower to consumer. Finding experienced advisors can make the difference between thriving in a competitive marketplace like New York, or floundering under a sea of regulatory red tape.
New York-based Grassi Advisors and Accountants boasts more than four decades of business growth and industry expansion. The firm helps businesses operate efficiently and profitably, minimize tax liabilities, ease the financial audit process, and reduce risk.
The cannabis industry is far from conventional. Growers, operators, and retailers need more than traditional tax and accounting advice to achieve long-term success. Grassi’s cannabis advisors provide the guidance and resources that cannabis, industrial hemp, and CBD businesses require to maximize tax savings, secure funding, manage cash flow, implement technology, and navigate other complicated decisions.
Grassi has deep roots in New York’s cannabis industry, having advised growers, manufacturers, distributors, and dispensaries since medical marijuana was first legalized in the state.
“There are many complexities in this industry,” said John Pellitteri, cannabis practice leader at Grassi.
“This market is federally illegal, highly regulated, and there is not a lot of traditional banking available. It can be a minefield, which makes it important for owners to surround themselves with advisors who know the space, have been through it, and can help them anticipate problems before they arise,” said Pellitteri.
Securing Solid Financial Strategies
Even as more and more states legalize the production and sale of cannabis products, funding continues to be an obstacle. Most financial institutions, such as banks and major credit card companies, will not do business with the cannabis industry.
Pellitteri knows of only a handful of banks and non-traditional lenders who offer loans to growers, operators, and retailers.
A key challenge is that different states have different laws applying to the legality, use, distribution, and growth of cannabis. It is a continually evolving landscape.
“Currently, two main areas keep us very busy,” said Pellitteri.
“Those are tax structure and financial compliance. With so many mergers and acquisitions and other changes going on in the industry, it’s important that all financials are in clear order and can help owners make confident decisions.”
A History of Success
Grassi was founded in 1980 by Louis C. Grassi and has since become one of the nation’s largest accounting firms with more than 420 employees and nine locations in the U.S. and Italy.
Its team members focus on individual industries to ensure specialized knowledge. The firm’s client list includes one of the first medicinal license holders in New York.
Grassi leverages this experience to guide new applicants through the strict requirements of the state’s recreational license application process.
“We were one of the first accounting firms to enter the cannabis space,” said Pellitteri.
“We’ve spent six years watching it evolve, speaking on it, and writing on it. It’s the majority of my time, and I love what I do. We’re in the industry in a real way and have a lot of talented people advising growers and operators.”
Blending Ingenuity and Creativity in NY’s Retail Scene
Pre-pandemic, New York City’s retail sector contributed $55 billion in taxable sales to the city’s economy according to the State Comptroller.
As retail rebounds from the effects of COVID-19, cannabis retailers will play an important part in those taxable sales. One company excited to offer its brand to New Yorkers this year is Genius Pipe.
Genius Pipe hit the market in 2017 and quickly moved to the forefront as a preferred smoking modality. Created by experts in the field of fluid dynamics, Genius pipes use golf ball dimple technology to cool the smoke.
To put it simply, technology and ingenuity combined to develop a sleek, efficient, and healthier product for modern cannabis users.
All About the Consumer
“The driving force behind our brand is that we make everything about the consumer experience,” said Dyan Ferman, CEO of Genius Pipe. “Our specific technology cools and filters the smoke, which prevents the coughing and burning sensation that happens with more traditional modalities.”
Genius pipes have journeyed from Beta 1.0 to the current Beta 5.0. The latest model contains a QR barcode linked to a social page on the Genius invite-only network, where Genius users can communicate.
With the upcoming Beta 6.0 model, designers and individual consumers will be able to add more colorful finishes and custom designs to the pipe’s surface.
The NYC Genius store will allow customers to interact with many types of Genius pipes and accessory products. Guests can also select designs and artwork for their pipes.
The Genius brand offers influencer marketing, sales, and a beta-testing membership club that offers discounts and an opportunity to try early-release items, all of which are powered by Genius-specific digital currency called Genius Karma.
“Once someone uses our products, they don’t veer,” said Ferman. “Their pipe and other Genius accessories become an extension of who they are.”
The Genius Platform
Ferman said Genius products are designed to mesh with a modern lifestyle.
The pipes are discreet and small enough to fit into a handbag or pocket, making them easy to carry while traveling (especially if using a Genius smell-proof bag).
Plus, the magnetic cover slides quickly in place to protect the smoking material from the wind.
Genius also offers numerous accessory items, such as lighters, backpacks, dab attachments, screens, vessels, odor sprays, and Genius Consumables such as flower and concentrates.
Genius University educates consumers on the cannabis space and the use of Genius products. Whether a person needs to smoke for medical or recreational reasons, Genius has created content to help customers get the most from their products.
The brand has been working with the New York art community on their latest designs, which include work by the New York-based comedy podcast Legion of Skanks and the web series, Legalize Coffee.
“There is nothing that compares to our products on today’s market,” said Ferman. “We are not merely a device. Genius is a way of life.”
Industrial Innovations Are Taking Pre-Rolls to a Higher Level
A perfect joint has a few key qualities. It burns evenly, hits smoothly, and doesn’t droop when held horizontally. While these might sound like basic properties, pre-rolls are a delicate science.
One needs quality rolling paper, flower that’s not too dry or too damp, and a particle size that provides structural support and adequate airflow.
If New York’s cannabis market follows the same trends as the rest of the U.S., pre-rolls will be a hot seller.
The pre-roll category netted $2.6 billion in retail sales in 2021 across six adult-use markets, data-analytics firm Headset reported. It’s now the third highest-revenue category in America, even surpassing edibles in popularity.
Manufacturers in the Empire State are part of what Headset estimates will be a $1.1 billion-a-year industry. Business owners should be prepared to ramp up production of pre-rolls to keep pace with enthusiastic buyers.
Perfecting Scalable Production
Particle size is especially important when scaling pre-roll production.
Research conducted by President and CSO of Delic Labs Dr. Markus Roggen, and Nursery Manager for 710 Labs Blake Grauerholz, shines some light on the topic.
They found cannabis ground by hand offers an ideal smoking experience. Its variable particle size is the key.
It is possible to replicate the hand-milled experience on a larger scale by blending two different particle sizes from an industrial grinder, like the Fritsch Pulverisette 19 (P-19).
The P-19 can grind flower with precision at several intervals of density, ranging from .5 mm up to 10 mm. Let’s take a look at why particle size matters.
When cannabis is ground too finely, the particles are mashed against each other, restricting airflow. When a pre-roll has less airflow, the vapor heats up while trying to escape the tight web of flower.
Vapor that’s too hot creates a harsh hit. Finely-milled flower also means a heavier pre-roll which will bump up the retail price.
Large, chunky particles create loose joints. This loose packing density leads to limp joints that don’t burn evenly.
Plus, larger particles often contain errant stems, which can puncture the rolling paper and prevent an even draw.
When grinding by hand, the particle size tends to be mixed. Small particles and large particles create the perfect blend for a velvety-smooth smoke.
The particles interlock, providing structural support and a better airway for the smoke to travel through.
Small business owners might get away with hand-rolling for a time, but in a large market like New York, small-scale solutions are limiting.
A precision milling system like the Fritsch P-19 offers a range of controlled particle sizes. Grauerholz and Roggen determined a blend of particles at 2 mm and 6 mm offer a remarkably similar experience to hand rolling.
The resulting pre-rolls offer a smooth hit with an even draw and consistent burn that doesn’t require relighting.
Manufacturers can set filling machines to alternate particle size in one-fourth gram intervals, recreating the hand-roll experience on large scale.
Continuous flow milling with targeted cutting doesn’t subject flower to prolonged heat or physical degradation from the grinding process, so the molecular profile is unchanged.
The result is potent, consistent, scalable pre-rolls.
Quality Meets Sophistication in New York
From Ancient China to Snoop Dogg’s era of hip hop and beyond, the appeal of rolling cannabis has stood the test of time. Despite a growing abundance of pipes, bubblers, bongs, and other devices, many people prefer to smoke the traditional way.
After two years of research and planning, Ash, the makers of premium rolling papers, emerged on the scene a year ago to rave reviews. Their goal was to develop high-quality, upscale products.
“We set out to create a paper that’s unlike the rest,” said Al Tawil, co-founder of Ash. “Our goal is to create a rolling paper that consumers are proud to use in any setting.”
With recreational cannabis now legal in New York, Tawil is confident their premium rolling papers will be an integral player in the state’s evolving cannabis scene.
Integrity Through Cultivation
After traveling to Asia and Europe, the Ash team decided France was leading the charge in terms of high-quality rolling papers. “We did a lot of research and traveled far and wide. We found that the French really know what they’re doing in terms of cultivating ingredients for rolling papers,” said Tawil.
Ash papers are fragrance-free and flavorless as to not interact with the natural taste and smell of cannabis. They are made with vegan, all-natural, organic, and non-GMO components.
“As a luxury brand, we have committed to exceptionally high standards that deliver elevated results,” said Tawil.
“For example, we hand-roll all of our cones to maintain the highest quality.” Ash offers two core collections, the Classic Collection and the Organic Collection.
The papers in the Classic Collection are made from rice pulp, and the papers in the Organic Collection are made from wood pulp.
Keeping It Classy
One of Ash’s taglines is “Where quality meets sophistication.” It wants its clients to feel classy purchasing and using Ash products. “Ash is leading a movement to change the face of the rolling paper industry,” said Tawil.
“It is similar to how dispensaries are working to polish their ambiance and offer an upscale experience.”
This upscale experience will surely be part of New York City’s expanding cannabis lounge scene.
Cannabis lounges are places where people who use marijuana can enjoy themselves in a private and safe environment.
As more cannabis lounges open up in NYC, they’ll make an excellent hub for brands like Ash. “We wanted to create a unique rolling paper with beautiful branding,” said Tawil.
“Our product’s quality and upscale packaging provide a chic option for people who enjoy smoking.”
As a young company in the industry, Ash is pleased with the mark they’re making.
Their primary goal is to continue retail and distributor partnerships so Ash products can be in many additional stores in the U.S. and abroad, particularly in up-and-coming cannabis marketplaces like New York.
“I’m an old-school kind of guy and enjoy the process of rolling a joint,” said Tawil.
“I wouldn’t try to persuade people to change their method, but for people who have used the same rolling paper brand for years, I suggest they give Ash a try.”
This Tech Zone first appeared in the spring 2022 issue of Cannabis & Tech Today. Read it here for free.