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Was Cuomo’s Cannabis Legalization Plan a Fraud?

Written by Jeff Siegel
Posted September 2, 2021

I told you it would happen.

Just a few weeks ago, I told you that with Gov. Cuomo getting the boot, the new governor, Kathy Hochul, would prioritize New York’s cannabis legalization rollout.

It really wasn’t hard to figure out. Because you see, while Cuomo dragged his feet on legalization, Hochul has long been an outspoken advocate of getting the Empire State’s legal cannabis market up and running ASAP.  

The state desperately needs the tax revenue too, and if Hochul wants to keep her job, she can’t defy the will of the voters, who are overwhelmingly in support of legalization.

Now, last week I discovered that Hochul took a private meeting with New York State Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie and made it clear that implementing legalization would be a priority for her administration.

This is a very big deal and certainly excellent news for some of the companies that already have a footprint in New York, including Curaleaf (OTCBB: CURLF), Innovative Industrial Properties (NYSE: IIPR), and Cresco Labs (OTCBB: CRLBF).

But this could also be good news for some of the smaller cannabis players who weren’t gifted a golden ticket from Cuomo when the original regulations were being developed.

You see, while Cuomo was never a fan of legalization, he certainly had no problem taking private meetings with the bigger players in the cannabis space. I suspect that was the easiest way for him to wet his beak.

Of course, with Hochul coming in, there is a possibility that “Big Marijuana's” hold on New York may be met with some pushback.

Chris Roberts from Forbes actually opined on this in a recent article where he wrote:

Under Cuomo, New York State legalized medical cannabis but under possibly the strictest rules in the country. More than five years on, fewer than 150,000 patients had qualified to access medical marijuana — and these patients could acquire cannabis from one of only 10 companies issued licenses by the state.

These “original 10” cannabis companies, gifted a market near-monopoly by the governor, became attractive takeover targets from Big Weed. And Big Weed snapped them up — in no small part because existing medical marijuana companies will be the first to supply and sell cannabis on the legal adult-use market.

Hochul doesn’t have to play the game with all of Andrew Cuomo’s rules. The state could expand the number of medical marijuana licensed gifted even further. The state could very quickly legalize existing, illegal marijuana businesses like legacy growers and delivery services. All that would be very unlike Cuomo, who provided an example of how government can best help Big Marijuana take over a state’s cannabis industry.

Now, there’s no way to know how this will play out.

But with a more legalization-friendly governor in office, it is likely she will be greeted by enough legalization advocates to convince her to allow for a fairer and more just legalization market with less government control and more free market influence. The latter would certainly be beneficial to both New York consumers and investors looking for additional exposure to the New York market.

Of course, even if Hochul takes the high road (pun intended) and opens up the market to allow for more competition and customer choice, it’ll still take a few years to play out, meaning those few public companies that still control the New York market will continue to dominate.

While I’m no fan of how Cuomo got into bed with “Big Marijuana” to limit competition in what should be an honest, free market, I’ll continue to profit from these players well into 2023. I’d be stupid not to.

And if you want to capitalize on what will soon be one of the most profitable cannabis markets in the world, I suggest you get some of this action for yourself now before Hochul makes any big announcements that will undoubtedly move these stocks.

To a new way of life and a new generation of wealth...

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Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks, a private investment community that capitalizes on opportunities in alternative energy, organic food markets, legal cannabis, and socially responsible investing. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.

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