Marijuana regulations and tax laws: I’m in New York State
In the past few weeks, we have seen many articles about New York’s Marijuana Control and Taxation Act (MRTA) written by lawyers located outside of New York or lawyers who are not qualified to practice in New York. We have always been “voicing” The importance of choosing the right law firm for your cannabis business. You should consider hiring lawyers and law firms that are actually engaged in legal matters in the state you intend to operate in.
In any state, hiring a “local” law firm is important, but we cannot overestimate the importance of having institutional knowledge of New York’s unique issues and customs. Any lawyer willing to spend money can refute part of the MRTA title and summarize the content of any given clause. Until the Cannabis Control Board (CCB) issues its regulations and applicants actually need real legal guidance when organizing their business and preparing their applications, all is well.
Let’s discuss some issues that out-of-state lawyers may not have thought of, let alone be resolved. We note that the following list is a great way to solve the issues that potential applicants should consider immediately.
Local opt-out of retail and on-site consumption licenses
Therefore, you are interested in opening an on-site consumption venue in Manhattan. You are considering leasing ground retail space in Chelsea or Flatiron. Maybe the (MAYBE) out-of-state lawyer knows the difference between the two.
Is the lawyer familiar with the boundaries between community committee 4 and community committee 5? We doubt it. If you need your lawyer to advocate against the withdrawal of retail and on-site consumption licenses at the community committee hearing, does that lawyer have credibility in the community committee? A better question: Does the out-of-state lawyer even know what a community committee hearing is?
The key is that MRTA represents local governing bodies in a way that requires local knowledge. Hiring a law firm that does not understand the complexities of the New York local government can terminate it before starting the application process, especially for retail and on-site consumer applicants.
Choose real estate
We have emphasized the importance of real estate in the application process. In addition to the obvious business implications (location, location, location), MRTA also requires applicants to own or lease the actual location in which they intend to work when submitting the application. This means that applicants will need to select real estate and actually sign contracts with them before obtaining a permit.
Do you want to apply for a planting permit in Riverhead, Long Island? Suppose you have found a broker who wants to give you some options for renting property. Has your out-of-state lawyer ever dealt with a New York real estate agent? Does your out-of-state lawyer know how to confirm that the property is classified for industrial use? Due to the lack of local knowledge, time and money will soon be wasted to hire external consultants.
Buy or lease real estate
This allows us to actually sign up for real estate. We will not care too much about this: the New York real estate market is one of the most competitive and isolated real estate markets in the world. If the employed law firm does not have at least a basic understanding of the operation of the New York real estate market, it will immediately put the applicant at a disadvantage.
how is it? Try the following questions: How much does it cost to negotiate and prepare a commercial lease in Manhattan? How many months of free rent are most commercial landlords considering? Will the landlord consider the tenant improvement allowance? If you want to buy this location, who will pay the transfer tax?Yes mortgage Is it recorded?
Without extensive research, it is possible that non-New York lawyers cannot answer these questions (you will have to pay for this). Once started, the New York licensing process will proceed quickly. New York’s real estate market will move faster. Don’t waste time choosing an out-of-state lawyer, because they will not be able to act as required by New York applicants.
Suppose you rent a retail space in Brooklyn as a retail pharmacy. Now, you actually have to build a store. At the very least, you will need to hire contractors and architects. You may also need to hire an engineer, interior designer or any other number of consultants to help the client design and build its physical location.
At the very least, your lawyer will need to be able to understand the New York construction contract, which contains many regulations specifically for operating in New York, especially the lien and insurance regulations for mechanics. Does your out-of-state attorney know how long it will take to go through the plan approved by the Department of Construction and issue a work permit? What about the suspension order issued by the Buildings Department?
Problems in the design and planning process before the start of construction can cause serious delays. As a retail pharmacy permit holder, you have to pay rent but cannot operate every day. Errors in the drafting of the contract or in the construction process can also lead to costly delays and lien issues, which can lead to lease (or loan documents) default.
In the face of construction delays and related costs, the needs of New York lawyers are obvious. You will not hire contractors in Oregon to build houses in upstate New York. You should not hire an Oregon lawyer to guide you in developing a cannabis business in New York.
Financing and building banking capabilities
The Federal Banking Act’s impact on the cannabis industry is Widely publicized Hope this problem will be resolved soon. Prior to this, the Federal Insurance Bank was unable to lend to cannabis companies or provide retail banking services (deposits, checks, etc.).
In the absence of a national bank, the only option for cannabis companies is Credit Union And small banks that only operate locally. Out-of-state lawyers are unlikely to be familiar with the New York Credit Union or New York-specific alternative financing options. In view of the fact that cannabis companies need to conduct business in New York (separate and separate from the licensing fees imposed by CCB), having a New York lawyer familiar with New York’s financing and banking options will be critical to the success of the company.
For any enterprise, it is possible to resolve disputes in some form, whether it is litigation, arbitration or mediation. We expect that almost all disputes related to the New York cannabis industry will occur in New York. Leaving aside the fact that you are permitted to practice in New York and our federal courts are a condition for filing a lawsuit, but understanding New York’s practice rules is crucial to resolving disputes in New York.
Finally, we want to remind us of the importance of using New York lawyers to develop your cannabis business in New York. Finally, one of the promoters of MRTA, Congresswoman Crystal Peoples-Stokes, issued a statement. In short, Congresswoman Peoples-Stokes said in a speech to the City of Rochester that the spirit of MRTA is to benefit New Yorkers, and CCB rules and regulations will follow that guiding principle. You do not need to hire us, but we strongly urge any applicant to consider a local New York lawyer as your consultant to enter the New York cannabis industry.