Jeffrey Hoffman is a New York City-based attorney who hosts “Ask Me Anything about Cannabis Legalization in New York” each week on LinkedIn. Hoffman and NY Cannabis Insider have partnered to bring those sessions into print in a Q&A format.
Hoffman’s practice focuses on cannabis industry clients, including licensees in the adult-use market, practitioners in the medical cannabis space, and cannabis adjacent product and service providers. He has a particular interest in social and economic equity cannabis license applicants, and he also informs and assists those convicted of cannabis offenses in getting such convictions expunged from their record. He can be reached at info@420jurist.com.
The following AMA is from March. 13 and the interview with Tony Gallo, acannabis-focused security consultant, is from March 20.
What is the biggest legal threat facing the New York State cannabis industry?
Rescheduling. Giving it to the pharmaceutical companies is actually a threat. I don’t know what this President is doing. Between this rescheduling fiasco and his inability to actually pardon anyone for anything, it’s really quite something. There are very few things here on planet Earth where one person has the absolute, unquestionable, unreviewable authority to do something with any real, world changing impact. And one of those things is the pardon power of the President of the United States for federal crimes. Right there in Article II, Section 2, Clause 1: The President shall…have Power to grant Reprieves and Pardons for Offences against the United States, except in Cases of Impeachment. (Note that it was indeed spelled “Offences” in the original document). Absolute and unreviewable. Not by Congress, not by the Supreme Court, not by nobody. Separation of Powers and all that jazz. He could pardon every single federal cannabis conviction today. But he won’t. Instead he’s in the process of giving the entire cannabis industry to Pfizer.
Do you know when the next round of applications for licenses will open?
In theory there’s going to be a “quasi-round” where they still let the AUCCs and AUCPs convert, and OCM has said they’re going to open up the tier/type three processing license for unlimited licensure. And then at some point, my guess is later this year, we will see a new round for both the license types they’ve already issued as well as perhaps a few of the ones they haven’t.
What are your thoughts on the lengthy marketing laws?
So, I’ve regularly called the product labeling and marketing regulations – the PLMA – draconian. I’ve been on the record saying that since they first came out. So do I think they should be eliminated in significant part? Yes, absolutely. The biggest way you prevent underage people from consuming cannabis is the same way you prevent them from consuming alcohol – you make it not as appealing. Think about this. None of the kids are on Facebook anymore. They’re on TikTok and Snapchat. And why aren’t they on Facebook anymore? Because all the GenXers and Boomers are on Facebook, and they just don’t want to be there. It’s uncool. So if the kids today thought drinking was the thing that Xers and Boomers did, none of them would do it. Zero. Like if you want to get the kids today, the under 21 crew, to do something, convinced them that it’s something that their parents do. And they won’t do it. They just won’t do it. So that’s the best way to do it. Doing the stuff that we are doing now – like not being able to use the word “chronic” in your advertising – that’s as dumb as anything I’ve ever heard in my entire life.
How can we get a better cannabis presence at the State Fair?
My understanding is that the first year there was actually a reasonable accommodation for cannabis, but last year it was a real mess. There should be a dedicated place for cannabis to be consumed. In fact, there should be a cannabis category among all the crops getting displayed at the fair – I want mutant cannabis at the state fair. And it needs to be a dipole mutation. For those of you that don’t know what that is, it’s where there’s no calyxes on any of the body nodes of the plant and they’re just at the top in the cola. I’ve posted a picture of this mutation to my LinkedIn feed if you want to see it: https://www.linkedin.com/posts/heavyj_on-my-show-today-i-said-i-wouldshare-the-activity-7173819441212747776-PKP2
JEFFREY: We’re very pleased today to have Tony Gallo, one of the leaders in security in the cannabis industry, with us today. So why don’t you start us off by just giving us your background, and Sapphire’s background, and what you guys are up to in the cannabis industry.
TONY: Sure, thanks. So we are the oldest nationwide security consultant company in the cannabis industry. In August of last year, we celebrated our 10 year anniversary. I was born in Brooklyn, my dad was a New York City fireman in the Lincoln Center area in Manhattan. I was the director of security for Sears and was responsible for the New York City market. So I have a pretty good background in New York. But in those 10 years in the cannabis industry, we’ve worked with about 800 cannabis clients in 37 states, including New York. So excited to be here today to talk to you a little bit about what we’ve learned over those last 10 years and what we’ve done with those clients across the United States when it comes to security.
JEFFREY: Let’s get right into it about New York. What is your sense of what’s going on in New York right now – how do you think the players in the market are responding to their security needs. Are we meeting the grade or a lot of folks not getting it done?
TONY: One of the things that I’m seeing a lot is the early stage growing pains that I had seen in Colorado, Oregon, Washington, and California a number of years ago. A lot of businesses are looking to open and they’re looking to open quickly, which I understand, but I think maybe there’s a lack of understanding as to what does a security plan mean, especially in New York, a state that’s really going to test your security plan. Obviously, if you don’t have a good plan, the chances of you having problems are much greater than, say, in another state outside of New York. New York is always a proving ground when it comes to security. And I think the one of the things that I’m seeing now is that rush to open, which I get, but really not looking at your security plan. For instance, are any of your employees trained on what to do if there is a robbery? Is the physical security, the video, the alarms, and the access control at the level where you’re not going to be exposed to losses, or do you just want it so that OCM is going to approve you and give you your license? And then after you lose $200,000 in a break, then you’ll put in that security system. So I wouldn’t say New York is any different than what I’ve seen in a lot of other state’s retail businesses. We do jewelry stores, pawn shops, liquor stores, convenience stores, and firearms stores. These are very similar industries when it comes to a desirable piece of merchandise, such as cannabis, and a large amount of cash. But my concern is that we are seeing an increase in robberies because of that desirable piece of merchandise, and an increase in break-ins. And, you know, we want to make sure not only is there security and compliance with the state, but really more important than even that is: is it going to protect you from losses occurring?
JEFFREY: What are the top things you might advise?
TONY: One of the things that you want to make sure at the end of the night when you lock your doors and you go home for the night is: are you sending any message to anybody to break into your store? Remember, the loss that occurs during a break-in usually isn’t what they steal from the store, it’s the damage that they do to your store. The loss is not the product, it’s the breaking of the window. It’s the damage to the sheet rock, all of those kinds of things. Second thing you want to do when it comes to security that I see is the lack of employee training. You want your employees to stay – there’s a high turnover in the retail industry as it is anyway. But are you giving the tools to your employees where they feel safe? Ask yourself this question. God forbid if there was a robbery – would your employees know what to do? You’d be surprised how many dispensary owners that I speak to say, “Well, we’ve never told them what to do. We’ve never given them those tools on how they should react to that.” Think about that. And then the third one is looking at your physical security. Are you sending a message that this is not a place that you want to rob? Are the cameras adequate? Is there adequate access control? Is there an adequate alarm system? And a lot of times, what we see is when a break in occurs, it’s hard because you’ve sent that message to people: come rob me, please. I’ve done over 2000 robbery investigations in my career. One of the common denominators that I see a lot in those robberies was that the store communicated that they would be vulnerable to something of that nature, vulnerable to someone breaking into their store late at night. So really take that step back and think about that. And even after you do open, have you done a risk assessment, have you looked at your location through those eyes? You will eventually do it if you own a store in New York, because the best salespeople in the security industry are the robbers. So you will eventually do it one way or the other.
JEFFREY: So let’s now turn your advice to another channel. You’ve read the regs, you’ve now worked here in New York a bit, what is the advice you would give to the OCM security wise?
TONY: I think the OCM has a good process and good intentions. I think the initial concern I see is some of the inspections that are being done. Are they focusing on the business being able to open or are they focusing on what the regs intentions really were ? You know, OCM has a 60 day video retention. It’s continuous also, which means that’s a very expensive process to do. Can that be reduced to 30 days from a security point of view? And why do we need 60 days? The other thing that I see that’s really blatant, which I don’t think a lot of people understand, is OCM has in their regs that video has to be maintained and running eight hours after the store loses power. I don’t think there’s really one store in New York State that is following that regulation to tell you the truth. Because to do that would be so cost prohibitive. I think that that’s something that needs to be reviewed by OCM.
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