America’s Place in Cannabis Tourism

America is Becoming an International Xanadu for Cannabis Tourism

By Aaron Smith

As a growing number of states legalize adult use, including New York, New Jersey, and Virginia, they’re turning much of America into a playground for weed-loving tourists.

The coronavirus pandemic flattened the tourism industry in 2020. But hoteliers, restaurateurs, and bartenders are hoping for a summer comeback. Legal states like California and Colorado, which have had time to develop fledgling industries in cannabis tourism, are well-poised to cash in on tourists with a taste for something they can’t get at home: legal marijuana.

Entrepreneurs in states where legalization is just starting to take hold, like New York, have a lot to learn from the states that pioneered legalization and have had time to set regulations and develop markets.

Tourists from prohibition states, like Texas and Idaho, and prohibition countries, like China and Japan, have an ever-widening landscape of cannabis-friendly states to visit. States that are legalizing adult use can expect to attract pot tourists, who flocked to early adopters like Colorado, California, and Nevada, shortly after they legalized recreational cannabis.

Selling cannabis to out-of-staters can be lucrative. John Kagia, chief knowledge officer at New Frontier Data, said that Colorado derives 4% of its cannabis sales from out-of-state visitors, while Nevada derives 25% of its cannabis sales from tourists. Some dispensaries in Las Vegas receive 60% to 70% of their revenue from tourists, he said.

What New York Can Learn From California

In Colorado, which legalized adult-use in 2014, and California, which legalized in 2016, a myriad of businesses catering to cannabis tourists have popped up.

Victor Pinho, founder of Emerald Farm Tours in San Francisco, takes tourists on tours of the cannabis farms of Humboldt County. He said that other states could incorporate cannabis into their existing tourist features. “In a place like New York, it’s going to feel different than a tour in California,” said Pinho. “Remember the plant is always the star of the show.”

Legalization has led to different sorts of businesses that could cater to tourists. Heidi Keyes, an art teacher in Colorado, was smoking pot with her friend one day when she came up with the idea for Puff, Pass, and Paint: art classes for cannabis-smoking students.

“I started a couple of classes as a joke, and they filled up right away,” said Keyes, who has expanded to 13 cities including New York, Boston, and Washington, DC. “It’s going to grow from here on out, which is fantastic.”

Cannabis tourism in California and Colorado could serve as a template for New York, according to David Holland, executive and legal director of Empire State NORML, a prolegalization organization, and co-founder of the NYC Cannabis Industry Association.

Like with Emerald Farm Tours in California, he said that visitors to New York could go on farm tours upstate while taking in Niagara Falls, the Finger Lakes, and the Adirondacks.

Bong Hits in the Big Apple … But Where?

It is easy to picture tourists flooding into New York City because they’re already there. Iconic tourist meccas like Times Square, Broadway, and the Statue of Liberty are coming back to life, and the city’s restaurants and museums are fully open this summer.

“The composition of the type of tourist that comes to New York is going to look very

different from the type of traveler that would go to Denver or Portland when those jurisdictions first legalized,” said Kagia. “New York is going to play a much more important ambassadorial role in exposing the uninitiated to the legal market.”

But what will the busloads of international visitors do after they’ve visited their first dispensary? Puffing on a street corner or eating edibles in their hotel room might not be the full experience they’re looking for, and it’s a lost opportunity for local businesses.

Allan Gandelman, a hemp farmer and president of the New York Cannabis Growers and Processors Association, wants to obtain a cannabis license so he can open a consumption lounge at his business Head & Heal in upstate Cortland. He said that tourists would “enjoy the views, smoke a joint, eat a doughnut, and then go for a walk picking blueberries or hang out by the pond.”

In Vegas, Baccarat Trumps Bud

But this depends on whether New York lawmakers allow for on-site consumption. Legalization in America has not left a trail of Amsterdam-style coffee houses popping up in its wake. Regulators in California, Colorado, and Nevada have been slow to allow on-site consumption.

New York has a lot to learn from Nevada, which legalized adult use in 2016. Las Vegas is one of the few U.S. cities that can compete with New York as an international tourist mecca. Nevada is one of the most permissive states in the country, with regard to gambling, guns, cannabis, alcohol, and prostitution.

But Nevada, famous for its casinos, has been leaving money on the table when it comes to cannabis. Like its predecessors, California and Colorado, the state was slow to allow on-site consumption. As legalization unfolded, tourists were spending money in dispensaries and then getting high on The Strip, instead of the casinos and restaurants.

Kellen O’Keefe, president and interim CEO of cannabis producer FlowerOne Holdings in Nevada, said he expects state regulations to evolve over time to allow on-site consumption, but it will be slow. “Launching a billiondollar cannabis market doesn’t happen overnight,” he said.

Smoke Lounges Are the Future

The rollout has been sluggish, though smoke lounges are coming to Las Vegas, said Jacob Silverstein, co-founder and CEO of the cannabis brand Hunter & Leaf, and the manager who started ReLeaf, the first dispensary in Las Vegas in 2015.

“You need to give people a safe environment to consume,” he said. “There’s a missed opportunity when you do not provide a safe, secure place for consumers to utilize the product that they’ve purchased. If you’re going to permit the use of cannabis for adults, you have to permit a place for them to use it.”

Morgan Fox of the National Cannabis Industry Association said that to truly capitalize on cannabis tourism, local businesses will need to offer cannabis consumption lodges and cannabis-friendly lodging.

When Nevada legalized cannabis, some hotels were not allowing the on-site usage of cannabis products. Fox said that sort of attitude could be counter-productive to making money in new markets like New York.

“Hotels are going to have to address this,” said Fox. “They’re going to have to move on cannabis consumption lounges, very quickly.” ❖

Heidi Keyes, an art teacher in Colorado, was smoking with her friend one day when she came up with the idea for Puff, Pass, and Paint: art classes for cannabis-smoking students.

Moving Forward for AllPeople

Meg Sanders Erik Williams

Roz McCarthy

Tahir Johnson Equity and Inclusion in the Cannabis Industry

By Chynna Pearson

Cannabis is one of the newest, most versatile, and job-filled industries in America. It created 77,000 jobs in the last year. Leafly reported that in 2021, the 37 states with legal cannabis offer 321,000 full-time jobs in marijuana — that is more than the number of jobs for electrical engineers.

With that many jobs, the issue of social equity has become even more pressing. Thankfully, many companies and organizations are taking legitimate steps to combat this issue.

Equity’s Big Hurdles

One major obstacle to entering the cannabis space is the cost associated with licensing. In Massachusetts, for example, the Commonwealth Dispensary Association (CDA) had filed a lawsuit against a rule that allowed only minority business owners to offer delivery for the first several years of the legal industry. This would give minority businesses a clear leg up and help recoup the expense of licensing. The CDA’s lawsuit led to major fallout, even if they’ve since withdrawn it.

Cannabis & Tech Today spoke with Meg Sanders and Erik Williams, owners of Canna Provisions in Massachusetts. Sanders said, “The biggest thing that keeps equity out of the cannabis industry is how expensive it is to enter. And the regulations being thousands and thousands and thousands of pages, anything from seed to sale tracking, to the security systems, to a million other things that you have to do in order to get a license, right there create an incredible hurdle.”

She continued, “And so if you want to solve the social equity and economic empowerment issue in this industry, you need to readdress the regulations. That’s the number one thing. And then if you go to the next layer of, well, why do these regulations exist? To keep people out. The system is not broken, the system is designed to operate exactly as it is. And that is to make sure that only a certain number of people can participate.”

Williams added that one reason it is so difficult for social equity to take hold within the industry is that some people are simply not on board with having a workable, socially equitable, economic empowerment system. That’s why several new organizations have been created to offer a helping hand to would-be entrepreneurs.

The U.S. Cannabis Council Initiative

The U.S. Cannabis Council (USCC) is a nonprofit and is one of the largest coalitions of top cannabis businesses, associations, and advocacy organizations. They seek to harness collective expertise to advance social equity, end federal prohibition, update all regulations, and promote legitimately ethical standards within the cannabis industry.

Recently, the USCC hired Tahir Johnson, a former DEI Manager at the National Cannabis Industry Association, to act as the Director of Social Equity and Inclusion. Johnson is expected to further the USCC’s mission with his expertise on diversity and inclusion.

Johnson says, “We’re on the precipice of federal cannabis legalization, and while there is much opportunity to be had, I am acutely interested in who has access to the opportunity. The USCC shares this passion, and I take this position knowing that cannabis leadership has the power and responsibility to impact real and honest change — and I look forward to playing a part.”

In his first 90 days, Johnson plans to engage with key cannabis and non-cannabis stakeholders in the equity community using a state-level strategy, ensure equity efforts are within all (including federal and state) legalization conversations, enforce accountability within the USCC, and create a task force to help members progress toward social equity goals.

Roz McCarthy, founder and CEO of Minorities for Medical Marijuana said, “Tahir is a change agent committed to solving industry challenges related to social equity and social justice. I’m counting on Tahir to get in good trouble, necessary trouble in his fight for social equity.”

Organizations Moving Toward Equity

The Equity Organization is dedicated to assisting with drug policy and other criminal justice reform policies for the industry, educating the community, and advocating for effective and equitable approaches to marijuana policy and other criminal justice-related issues.

This organization was founded by Executive Director Natalie Papillion. The company spearheaded several initiatives to create a more equitable industry and help expunge past cannabis convictions for formerly incarcerated individuals. The hope is that once cannabis is federally legal, there will already be an established, equitable foundation on which to build.

At Good Tree Capital, smaller cannabis companies and entrepreneurs can get assistance with money management and even small loans. The company gave out their first loan in 2017 and since have assisted people with an average return investment of 28.7%.

The company uses a proprietary algorithm to assess credit risk. They believe their innovative technology allows them to determine the likelihood of default with more accuracy than traditional banks. By removing opportunities for human bias around race or gender, their techforward approach could help remove barriers to capital for people of color and minorities.

Creating an equitable space for all people is a work in progress. However, companies like the USCC, The Equity Organization, and Good Tree Capital are making strides to help all people find a place in the cannabis industry. ❖

Equity Organization Executive Director Natalie Papillion

Seeing GREEN

in the Prairie State

By Patricia Miller

Illinois raked in $87 million from adult-use cannabis purchases in December 2020, according to the Illinois Department of Financial and Professional Regulations. The state embraced recreational sales in January of last year — earning more than $1 billion in revenue in their first 12 months of adultuse legalization. In addition to revenue, the legalized market is bringing in tourists and new opportunities for existing residents.

The decision to legalize was a wise one. Since 2010, Illinois has seen a steady migration of residents leaving the state. More than 168,000 people moved away in the last decade, reported IllinoisPolicy.org. The hemp and cannabis industries should help revitalize the region and spur a surplus of new residents to call the “Land of Lincoln” home.

Industrial hemp is ramping up in the Midwest since the 2018 passage of both the Industrial Hemp Act and the Federal Farm Bill. The state was already one of the top corn producers in the nation and is now home to 798 licensed hemp farmers, according to Hemp Industry Daily. Northern and central Illinois have some of the finest soil in the world for agriculture, making it an ideal hub for hemp and cannabis cultivation.

In this issue’s Tech Zone, we’ll speak with some of the people and companies who call Illinois home and discover why it’s one of the nation’s most promising markets for marijuana. ❖