‘Legacy’ Pot Dealers in New York Want to Go Legal. Can They? - 3 minutes read
Buddy’s Versus the ‘Chads and Brads’
In 2018, Mr. Cantillo started to notice designer pot strains, sold in stylized mylar bags, gaining a kind of cult status in California. “Cannabis culture is very similar to sneaker or streetwear culture, where a certain brand has a lot of clout,” Mr. Cantillo said. So he persuaded Mr. Bronson to buy supply from some of those brands, and he set up an Instagram page to market them. The products sold out immediately. That’s when they adopted the name Buddy’s Bodega, and the business has been growing ever since.
Some of Buddy’s offerings. “Cannabis culture is very similar to sneaker or streetwear culture, where a certain brand has a lot of clout.”Credit...Kendall Bessent for The New York Times
For Buddy’s, a major benefit of legalization is conducting normal business activities — contracting creative agencies, meeting with landlords, licensing specialized software — without hiding what they do.
However, it also comes with complications. States prefer to license businesses that can demonstrate they will succeed, but Buddy’s revenue is off the books, so without an official pardon from the government, it can’t actually show its earnings — or dedicate those earnings toward start-up costs — without raising eyebrows at the Internal Revenue Service. “There’s no statute of limitations on taxes,” said Jason Klimek, a tax lawyer specializing in cannabis at Barclay Damon.
Start-up money is also difficult to come by. Mr. Bronson, who was raised by a single mother, and Mr. Cantillo, whose parents are immigrants, do not have much financial padding to put toward the business. And since marijuana is still illegal on the federal level, most banks won’t give them loans — or even offer them a bank account.
If the Buddy’s owners are granted a license, they will be responsible for filing inventory records, financial statements and corporate documents, like any other licensed business. They will probably need to keep comprehensive records of each plant’s path, from seed to sale. “It’s a whole new world of information you’ve got to navigate,” said Joe Rossi, who leads the cannabis practice at Park Strategies, a lobbying firm that is working pro bono to help Mr. Bronson and Mr. Cantillo apply for a license.
Businesspeople new to the cannabis industry most likely come in with a slew of advantages, including clean cash and clean records — not to mention experience with regulatory frameworks. They are, essentially, starting new companies, just as they would do in any other legal industry.
Source: New York Times
Powered by NewsAPI.org