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Exploring the Impact of Cannabis: legalization, economy, and culture

Two recently announced initiatives may soon converge for a significant impact on the next wave of revitalization in Western New York. The first is Governor Cuomo’s prioritization of adult-use marijuana legalization. The second is Flora Buffalo’s plan to build a $200M high tech cannabis campus on Buffalo Lakeside Commerce Park.

Buffalo could become a hub for cannabis innovation, which opens up many conversations regarding how a project like this and its connection with other local institutions might bolster the region’s economy, while also creating opportunities for employment, education, training and research.

To answer questions readers have sent us and to address some their concerns, we’ve launched this editorial series to explore some of the broader effects of recreational legalization and cannabusiness to our area, and reached out to Flora Buffalo to engage in what we hope to be a widespread discussion.

UPDATE: Governor Cuomo released a statement after the publication of this article, stating that legalization is unlikely to happen as part of the final state budget deal. The state budget is due to be passed on April 1. “There’s a wide divide on marijuana,” Cuomo said. “I believe, ultimately, we can get there. And we must get there. I don’t believe we get there in two weeks, and also that’s what the legislative leaders are saying.”

Governor Andrew Cuomo has made it clear that he wants cannabis legalized before the State’s fiscal year begins in April. Cuomo’s recently unveiled plan would establish separate licenses for growers, distributors, and retailers, with a proposed ban on growers opening retail shops. The plan calls for three separate taxes – a 20 percent state tax and 2 percent local tax on sales from wholesalers to retailers, as well as a per-gram tax on growers. The plan would also ban sale of marijuana to anyone under the age of 21 and would seal the records of those convicted of possession during its prohibition. This proposal is currently being debated in the legislature, whose session ends in June.

In terms of statewide economic impact, Cuomo estimates that legalization would bring in $300 million annually in tax revenue by the time it becomes fully implemented in 2023.

In terms of statewide economic impact, Cuomo estimates that legalization would bring in $300 million annually in tax revenue by the time it becomes fully implemented in 2023. Colorado, the first state to open recreational marijuana retail shops, provides some insight as to how the marijuana industry can provide an economic boost.

Colorado legalized adult-use cannabis in 2012 and recreational marijuana stores opened in 2014. According to a 2018 study by the Kansas City Fed, within the first month, recreational sales exceeded $14 million and medical sales more than doubled that amount at $32.5 million. By 2017, combined sales in the state exceeded $1.5 billion. That year, Colorado collected more than $247 million in tax revenue from the marijuana industry. With growth of the industry came an increase in demand for industrial warehouse space and a boost to the state’s tourism industry. According to the Colorado DOR, the state attracted 6.5 million cannabis tourists in 2016 alone.

As importantly, Colorado’s cannabis industry currently employs about 17,821 full time employees and hiring has increased 17.7 percent in the past year. In addition to direct jobs, the industry has contributed to jobs in other sectors, including security, construction and HVAC, consulting, legal, and other business services. With benchmark numbers like these, it’s fair to assume that the cannabis industry will bring jobs to Western New York and boost areas such as tourism, construction and agriculture, among others.

Soon after Governor Cuomo announced his prioritization, Flora Buffalo unveiled a plan to build a $200M high tech cannabis campus encompassing 1.25M square feet for cultivation, production, and research. The Buffalo Urban Development Corporation recently approved the sale of 72 acres of vacant land at Buffalo Lakeside Commerce Park for the Flora Buffalo project.

Flora’s campus will be built on the former site of the Hanna Furnace Corp, which made merchant pig iron from 1902 until the plant closed in 1982. If approved, the project could become the center of a modern revival of Buffalo’s long manufacturing history.  By creating a hub for the emerging cannabis industry, and in turn contributing to Buffalo’s revitalization, this project has the potential to modernize and expand the site’s industrial legacy—a legacy that included 900 workers and yielded nearly 800.000 tons of pig iron annually.

What was once home to The Hanna Furnace Corp, which made merchant pig iron from 1902 until the plant closed in 1982, could become the center of a modern revival of Buffalo’s long manufacturing history.

The proposed campus would bring an estimated 500-1,000 jobs, with 75 percent of them local. Positions would include cannabis extraction technicians, master growers, researchers, product developers and lab technicians, skilled positions in demand in the rapidly growing sector. These jobs have the potential to provide middle class incomes that support families. According to Glassdoor’s December 2018 Local Pay Report, the median salary for cannabis employees is $58,511 per year. Flora has established a partnership with SUNY Erie Community College to provide training, creating a pipeline for locals to gain valuable skills and secure lucrative cannabis jobs.

Social impact is a major concern for both residents and elected officials. Assembly Majority Leader Crystal Peoples-Stokes, who has long advocated for legalization, aims to ensure that those ensnared by mass incarceration and the communities most heavily impacted by marijuana’s criminal enforcement are included in the economic benefits of the emerging market. Her proposed Marihuana Regulation and Taxation Act (MRTA) introduced in 2017 would allocate marijuana tax revenue toward education funding, drug treatment programs, and grants for communities that were hurt by state and federal drug laws. Right now, the legislature and the governor are working to reconcile the differences between Cuomo’s vision of legalized cannabis and the one championed by the Majority Leader.

Flora Buffalo’s commitment for social equity begins with a Community Benefits Agreement to hire minority-owned construction firms for at least 25% of the campus build-out, which we believe  is a significant step towards social equity. If awarded a license, the company has also committed to collaborate with local community based organizations to achieve its social equity goals—ensuring jobs and entrepreneurial support are available to those who’ve suffered under marijuana’s criminal enforcement. Residents of the most vulnerable  communities would also be provided with education and apprenticeship opportunities, job training, and small business support through their campus incubator.

There is more cannabis related activity in the region. A Canadian company, Canopy Growth, recently announced plans to spend up to $150M establishing a new hemp processing facility in Binghamton to create hemp based products and conduct research. The Ontario based enterprise pointed to the area’s low real estate costs, significant economic need, and existing pool of workers in need of jobs as incentives for choosing Binghamton. This project is further evidence that Buffalo and Western New York are primed to join one of the country’s fastest growing industries.

If awarded a license, the company has also committed to collaborate with local non-profit organizations that specialize in social equity to ensure jobs and entrepreneurial support are made available to those who’ve suffered under marijuana’s criminal enforcement.

We’re excited about this project because it’s a rare opportunity to potentially establish Buffalo as a hub for the cannabis industry by providing product, training, and research. Buffalo’s proximity to Canada and our country’s thriving legal industry offers the possibility of information and best practices exchange with industry leaders in the Great White North, and could make the Great Lakes region one of the largest cannabis producers in the world.

To Support the Project:

Flora Buffalo needs your help to make their proposal a reality. The greater your support, the quicker Flora can move this project forward. Please complete the form linked here to show your support for Flora’s Buffalo Cannabis Campus to local representatives. And consider sharing this article with friends to help spread the word.

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Written by Buffalo Rising

Buffalo Rising

Sometimes the authors at Buffalo Rising work on collaborative efforts in order to cover various events and stories. These posts can not be attributed to one single author, as it is a combined effort. Often times a formation of a post gets started by one writer and passed along to one or more writers before completion. At times there are author attributions at the end of one of these posts. Other times, “Buffalo Rising” is simply offered up as the creator of the article. In either case, the writing is original to Buffalo Rising.

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