By Andrea Deckert  |  Rochester Business Journal  |  January 15, 2020

Area poised to benefit from marijuana legalization, experts say

Recreational marijuana for adults could soon be legal in New York as lawmakers look to tackle the issue this year, and some say the measure could be a boon for the Rochester/Finger Lakes region.

Zach Sarkis is executive director of Flower City Solutions and the NY HempLab, which were created to help build and support a cannabis industry in New York. He is confident the proposal will become a state law this year.

“We’ve been saying it’s not ‘if’ it passes, but ‘when’ it passes,” Sarkis says. “It’s already a massive market booming across the country and this opens us up to that excitement.”

In his State of the State address earlier this month, Gov Andrew Cuomo called for the legalization of recreational marijuana to adults over age 21.

He also called for strict quality and safety controls over packaging, labeling, advertising and testing of all cannabis products.

Cuomo plans to create a cannabis and hemp research center within the SUNY system and wants to work with neighboring states – including New Jersey, Connecticut and Pennsylvania – to create a safe and fair system around the legalization of adult-use recreational marijuana.

The governor had a similar proposal last year but just missed securing the needed votes to pass. Lawmakers instead passed a law that scaled back penalties for individuals found to have small amounts of marijuana and created a process for expungement of previous convictions.

Proponents say legalizing marijuana would create a market that could bring in hundreds of millions of dollars and create numerous jobs across the state. Cuomo predicted legalization would generate some $300 million in new revenues each year.

Eleven states have legalized recreational marijuana use. They are Alaska, California, Colorado, Illinois, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington. Washington D.C. also allows for the recreational use of marijuana.

They are among 30 states that allow the use of marijuana in some form; most for medicinal purposes. New York allows for the limited use of medical marijuana within the state.

Public support for legalizing marijuana is also growing, with two-thirds of Americans believing the use of marijuana should be legal, according to a recent Pew Research Center survey.

Sarkis has been an advocate for industrial hemp since 2007 and has worked in the industry in California and Oregon.

The HempLab’s goal is to build a culture and create awareness of the cannabis industry. A membership drive has begun to support its efforts.

It also aims to serve the community in three ways, Sarkis says.

They are: educating communities about the workings of the cannabis industry ecosystem, from seed to sale; incubating businesses looking to find their niche; and accelerating the industry as a whole, with an emphasis on upstate New York, by creating opportunities for businesses to get the support they need to scale.

The Rochester/Finger Lakes area, in particular, has the potential to be a hub for this emerging sector, he says.

The cannabis plant – which Sarkis calls the most utilitarian on the planet – could be used in a number of industries locally, including advanced manufacturing, food production, medical and agriculture.

Another area for potential growth is lighting, particularly the use of a light emitting diode to help reduce energy consumption during the indoor cannabis growth process.

Sarkis believes passage of the law would be embraced by businesses that could break into an untapped market and by universities that would encourage and help conduct research on the product and its uses.

Sarkis partnered with the Greater Rochester Chamber of Commerce to present events, including one last May entitled “CannaBusiness: Capitalizing on the Cannabis Economy.”

The half-day symposium was attended by more than 350 people and opened a community conversation on the emerging cannabis and hemp industries, Sarkis says. A second symposium is slated for February.

Sarkis says the events help to draw awareness and encourage the community to take a comprehensive approach to the issue.

“The more information the community has, the more it can help shape policy,” Zarkis notes.

Much of the debate surrounding the legalization of recreational marijuana has centered around criminal justice and potential tax revenue.

State Sen. Rich Funke, R-Fairport, does not support the proposal, but with Democratic support in the state legislature, as well as a $6.1 billion state deficit, the measure is likely to be approved, his chief of staff, Matt Nelligan, says.

Funke, however, has said state leaders need to focus first on reducing spending, noting that past stopgap revenue raisers like casinos and medical marijuana have drastically underperformed expectations for income.

His reservations about legalizing recreational marijuana include concerns that there is not a reliable mechanism in place to charge a person with driving under the influence of drugs, and the belief that marijuana could be a gateway drug, Nelligan says.

Robert Duffy, president of the Greater Rochester Chamber of Commerce, says it is hard to predict what will happen, but he sees legalization happening in the not-too-distant future.

Duffy – who served as Rochester’s chief of police from 1998 to 2005 – says whether it is legal or not, people purchase marijuana every day across the country.

There is a need to control it, tax it and price it in a way that eliminates the black market, he adds.

Duffy understands concerns such as how to detect whether a person is driving under the influence of drugs and believes technology should be developed to help better address those concerns.

He also agrees legalizing adult use marijuana could create a new burgeoning economy in the region, but notes it is a complex public policy issue that needs to be laid out carefully and completely.

Phillips Lytle LLP special counsel Tristan Hujer focuses his practice on cannabis law and has been following new state regulations passed into law in December that created a comprehensive regulatory system governing the state’s industrial hemp and cannabidiol, commonly called CBD, markets.

Hujer represents cannabis growers, distributors and other businesses, including manufacturers and retailers, primarily in Central and Western New York.

Cannabis law started as a small part of the law firm, but has developed as the industry has grown, he says. The law firm offers a full range of services for hemp and cannabis clients, from commercial litigation to general corporate advisement and intellectual property assistance.

Phillips Lytle also has a science team well versed in state and federal regulations.

Hujer is optimistic the state will move forward with legalizing recreational marijuana for adults, noting there are many benefits, including the revenue it could bring into the state and growth it could provide for a range of businesses.

“We can help clients navigate the regulations and the rapid changes as the industry continues to grow,” Hujer says.

Andrea Deckert is a Rochester-area freelance writer.