Participating in the Regulatory Process in New York’s Cannabis Industry
Yesterday we submitted our first comments to proposed adult use cannabis regulations as an investment firm. Admittedly, being acutely focused on finding outsized investment opportunities in cannabis on the east coast, we have not spent much time in the regulatory framework process. After speaking with trusted advisors who helped us recognize the magnitude of the moment here in our home state of New York, we decided to submit comments to the OCM with respect to proposed adult use regulations. The regulations, as proposed today, create substantial roadblocks to those of us who wish to deploy growth capital for the New York adult use cannabis market. This was the right time for us to participate however there were a few byproducts of the process that we wanted to share.
Connecting with others in the space who were reviewing the proposed regulations and opining in parallel sharpened our pencil and gave us a more well rounded understanding of how regulations effect different stakeholders in the industry.
As we worked through our recommendations, it was surprising how often it was difficult to come up with a sound recommendation. For example, we could come up with a solution that would fit our investment model, however in working through the ramifications of the solution we would find that it would create a block for different investment models. Creating useful comments that thread the various needles in this industry is not easy.
We were under the impression that there were better parties than Receptive Capital to submit comments. So we initially decided to offer our support to others who were organizing comments to be submitted through an organization or group. We thought that this was a sound strategy to make our voices heard as these groups are better connected to the regulators than we are. Almost every group we connected with were happy to have us, but also strongly encouraged us to submit comments independently. “The more the regulators hear from us on the same points, the better.” This was a good learning moment for us as a firm.
A big thank you to Jeffrey Schultz and Bruce Sterman for encouraging, informing and leading.
If you are reading this and you have an opportunity to participate in the regulatory process, we highly recommend it.