Five outrageous rules you'll have to follow in the world of cannabis

Sept. 21, 2023
The rules are very different for the cannabis industry than they are for conventional businesses, even highly regulated ones

You won't see any jazzy signs outside legal cannabis stores in New York.

Unlike traditional retailers of all kinds, you won't find any sales or promotions at legal pot stores, either.

Under New York's highly regulated cannabis industry, discounts and eye-catching signs are strictly prohibited.

And if you're a recreational grower, be careful not to use too many growing lights while you're cultivating your plants. There are rules about that, too.

In short, the rules are very different for the cannabis industry than they are for conventional businesses, even highly regulated ones, such as liquor stores. They're much more stringent and detailed, right down to dictating how many signs a store is allowed to have and what they can say.

Aleece Burgio, an attorney at Colligan Law in Fountain Plaza, is the program executive chair of the New York State Bar Association Cannabis Section. She said cannabis regulations are more prohibitive in some ways than even those for the alcohol industry — an industry where laws are already notoriously convoluted.

"I wouldn't use the phrase 'silly,' I would just say that there are a lot of restrictions on this practice area," she said. "The government has really micromanaged the business of cannabis."

Have a look at five of the more stringent rules governing the cannabis market in New York State.

No discounts

When Dank owner Aaron Van Camp was asked what he thinks is the silliest rule he has encountered since opening Western New York's first recreational dispensary on Main Street in July, he didn't hesitate.

"No discounts for veterans allowed," he said. "Well, no discounts period, but I feel extra bad not giving them one."

Dispensaries cannot advertise giveaways, discounts, price reductions, points-based reward systems or customer loyalty programs, according to guidance from the state Office of Cannabis Management. They also cannot use the words "sale", "free", "price drop", or "discount" on a menu, in any communications to customers or elsewhere.

Unlicensed smoke shops don't play by state rules, so they've got a major leg up when it comes to enticing customers with sales, freebies and price breaks. And the rule severely limits licensed shops' go-to-market strategies, critics have said.

Even cigarette companies are allowed to offer loyalty rewards programs.

No giveaways

Don't expect to see a t-shirt cannon with a pot leaf on the side. The OCM really knows how to be harsh a mellow when it comes to advertising. Cannabis companies are not allowed to give away any kind of promotional swag.

That doesn't just mean they can't give away free samples of pot. It means they can't give away anything — no T-shirts, no stickers, not even a branded Sabres schedule.

"Consumers must not be coerced into over-purchasing cannabis products," reads the OCM's Packaging and Labeling & Marketing and Advertising Guidance.

It may come as a surprise to anyone who has received any number of marketing tchotchkes over the years from liquor or beer companies. Beer companies are known for giving away such things as t-shirts, hats, coolers and beer koozies. And again, even tobacco companies give away their fair share of swag.

Growers: Don't use too many indoor lights

New York even regulates how many lights recreational cannabis growers are allowed to use indoors.

Traditional recreational cannabis growers have been limited to 20 artificial lights for use when cultivating their plants. The lights are used to help the plants grow in a way that regular sunlight does not.

But proposed regulations, set to be adopted Sept. 12, would allow medical dispensaries to start growing and selling recreational pot — and don't put a limit on how many grow lights those so-called ROs can use.

That means some of the state's most vulnerable farmers, who have risked the most while being able to recoup the least, are at a major disadvantage behind the ROs, which already have well-established businesses and tend to have deeper pockets.

Many traditional farmers have invested their life savings into growing pot, only to find there were no or few stores open in which to sell it when the harvest was ready. There are only 17 state-licensed dispensaries open in the state, two of them in Western New York. Meanwhile, farmers are sitting on millions of dollars of cannabis they harvested nearly a year ago, with very few places to sell it. Federal law prohibits them from selling out of state.

Some ROs are expected to pay millions of dollars for the licenses allowing them to sell recreational cannabis — solving the problem of taxation shortfalls the state has found itself in since bungling the rollout of legal retail cannabis sales in the state.

"It's crazy. The state is saying, 'OK. We screwed it up, so we might as well take the easy way out and get the big ROs to come in and they'll give us a lot of money real quick and then everybody can get off our back," said Thomas Szulist, owner of Singer Farm Naturals, a licensed cannabis grower based in Appleton.

Two signs, max

Again, dispensaries are severely limited when it comes to getting word out about their business. They're limited to two signs per licensed dispensary. And those two signs are strictly regulated, including limits that put a crimp on creative touches that are common in most retail signs.

"(Signs) can only be for the purpose of alerting individuals to the location where the licensee conducts sales," reads the PLMA guidance.

That means signage can't include a store's logo, symbol or any images. It also can't include any mottos, "selling messages" or other "non-essential text." They're limited to the name of the company, address, contact info and the nature of the business.

Signs can't contain colored lights or any kind of special illumination other than what would allow consumers to read the sign at nighttime.

"Advertising is absurd," said Van Camp at Dank.

Just say 'no' to homegrown

You can smoke pot and buy pot, but you can't grow it yourself — yet.

The Marihuana Regulation and Taxation Act, or MRTA, approves home cultivation of cannabis for personal use, but not until rules are drawn up by the state Office of Cannabis Management to govern it, "which will occur within 18 months of the first adult-use retail sale."

That first legal sale didn't happen until late December, which would mean home grows may not be approved until as late as next summer, though it could be approved sooner than that.

The delay was meant to keep homegrown cannabis from competing with state-sanctioned retail sales, while licensed retailers get their shops off the ground. But the rollout of legal retail sales has been so slow, it has meant that consumers have been legally barred from growing the plant, even though they've had no other place to legally buy it. The first state-licensed dispensary didn't open in Western New York until Dank on Main Street debuted last month.

Once home cultivation for recreational use is allowed, those 21 years of age or older will be able to grow up to six cannabis plants at home for personal use — with a total of 12 per household.


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