New York’s optimism is fading

Just outside the Luxury Meets Cannabis Conference in New York City last Thursday, where a well-coiffed crowd in designer clothes sampled artisanal hemp beverages and checked out discreet packaging for hash pre-rolls, stores openly sold illegal marijuana in the streets around the city’s main railway station.

That’s a concern for Nidhi Lucky Handa, the owner of Leune, a California-based brand that’s operated for four years and is expanding into other states via licensing deals. Handa, in an interview next to Leune’s booth at the conference, said she’s interested in entering New York, but competition from the growing illicit trade is daunting.

“How do you explain this to the consumer? It’s not just one shady thing in an alley,” she said. “It’s everywhere.”

The cannabis industry has shifted from calling it a “black market” to a “grey market” — but either way New York’s underground trade poses a stark threat to the licensed recreational market that’s supposed to kick off this year. It was the main challenge discussed on the sidelines of last week’s conference, where optimism about the state’s plan to use licensing to lift up former convicts and encourage mom-and-pop shops seems to have been replaced by concerns about whether New Yorkers will even want to buy licensed weed.

“You’re sowing the seeds of destruction for the people you want to lift up,” said Mitchell Baruchowitz, managing partner of cannabis investment firm Merida Capital Partners, referring to the way New York has let the grey market proliferate.[Read More @ Bloomberg]