Vireo Health of New York CEO Ari Hoffnung testifies on adult-use cannabis

Vireo Health of New York Chief Executive Officer Ari Hoffnung told a panel of state Assembly members this week that legalization of cannabis for adult use is a “huge step in the right direction,” but more must be done to repair inequities created by cannabis prohibition.

Hoffnung delivered testimony during Tuesday’s Assembly hearing on the topic, noting that while legalization would result in significant economic benefits for New York state, he would support legalization even in the absence of a financial windfall because of the human toll the war on drugs has taken on communities of color.

“I use the word communities because the victims of the war on drugs are not limited to those who have criminal records for drug-related crimes, but also include family members who depend on them economically, emotionally and otherwise,” Hoffnung said.

“I can’t imagine how unjust it feels for those who have been locked up for marijuana-related crimes to constantly see stories about the ever-expanding multi-billion-dollar marijuana industry from which they are essentially locked out,” he later added, suggesting that the state take steps to ensure there are opportunities for diverse ownership and employment in the cannabis industry. Such steps include:

* Offering low-interest loans to minority- and women-owned certified businesses;

* Offering priority license registration to victims of the war on drugs;

* Mandating that cannabis companies provide annual diversity reports on their workforces and contracts;

* Encouraging unionization in the industry;

* And allocating a portion of cannabis tax revenues to fund scholarships for formerly incarcerated individuals.

Hoffnung also suggested that the state take steps to strengthen New York’s medical cannabis program by:

* Expanding patient access by increasing the number of medical marijuana dispensaries that each Registered Organization can operate;

* Expanding patient access by allowing any medical practitioner licensed to prescribe opioids to join the medical marijuana program and certify patients, and by allowing practitioners to certify patients with any appropriate medical condition;

* Reducing economic barriers to medicine by allowing patients to purchase flower, while simultaneously launching a public health campaign to encourage vaporization instead of smoking;

* And promoting diversity in today’s medical marijuana program by adding new registered organizations that qualify as minority- and women-owned businesses.

You can watch Hoffnung’s testimony and read a full transcript below:

Good morning, Chairpersons Lentol, Gottfried, Peoples-Stokes and Rosenthal, and members of the committees.

Thank you for convening this public hearing and providing New Yorkers with an opportunity to comment on proposals to legalize, regulate and tax marijuana for adult-use.

My name is Ari Hoffnung, and I am the Chief Executive Officer of Vireo Health of New York, one of ten Registered Organizations licensed to grow, process and sell medical marijuana in the state.

We have a manufacturing facility in Fulton County, built on the former site of a juvenile detention facility, the symbolism of which is not lost on my colleagues and me. Our dispensaries are located in Queens, White Plains, Albany and Binghamton. We currently employee nearly 100 New Yorkers, many of whom are represented by United Food and Commercial Workers Local 338.

I had the honor of previously providing testimony on this topic in the spring of 2014. At the time, I provided a fiscal impact estimate of the Marihuana Tax and Regulation Act and discussed the economic implications of that legislation’s key tax provisions.

The fiscal estimate I provided was based, in part, on a report titled “Regulating and Taxing Marijuana: The Fiscal Impact on New York City,” which I helped prepare while serving as New York City Deputy Comptroller for Budget and Public Affairs under then-New York City Comptroller John Liu.

At the time, I had estimated that the direct and indirect fiscal benefits of enacting adult-use legislation were approximately $1.8 billion. That included nearly $800 million in direct benefits for the state, and another $1 billion in indirect economic benefits, including local tax revenues, job creation and decreased spending on prohibition enforcement efforts. Since then, more economic data has become available, but directionally

legalization’s impact on New York State’s budget remains the same: revenues will increase, and expenses will decrease.

However, as I testified four years ago, I would support the legalization of marijuana even in the absence of fiscal benefits because of the human toll the war on drugs has taken on New Yorkers, particularly on communities of color. I use the word communities because the victims of the war on drugs are not limited to those who have criminal records for drug-related crimes, but also include family members who depend on them economically, emotionally and otherwise.

While legalization is a huge step in the right direction, it alone cannot repair the inequities created by marijuana prohibition. To confront this crisis of justice, we must consider additional strategies, such as expunging the criminal records of those arrested for marijuana-related crimes.

Moreover, we need to work hard to ensure the soon-to-be-expanded cannabis industry is more diverse than the initial medically-focused cannabis industry, which is largely white and male.

While many of my peers and I fit this description, this is, of course, not a problem unique to the cannabis industry. But what is unique to the cannabis industry is the toll the war on drugs has taken on communities of color.

I can’t imagine how unjust it feels for those who have been locked up for marijuana-related crimes to constantly see stories about the ever-expanding multi-billion-dollar marijuana industry from which they are essentially locked out.

To ensure that there is ample opportunity for diverse ownership of cannabis businesses, we must reduce the financial barriers to launching a new business in an industry not currently eligible for federal small-business loan programs. New York State should offer low-interest loans to minority- and women-owned certified businesses seeking to enter the cannabis industry.

We ought to also follow in the footsteps of other jurisdictions and offer priority license registration to victims of the war on drugs.

To ensure diversity in employment, cannabis companies should be asked to provide annual diversity reports detailing the ethnic and gender

demographics of their workforce and the percentage of their contracts with minority- and women-owned certified businesses.

To ensure that the tens of thousands of new jobs created by New York’s cannabis industry are well-paying and that employees are treated with the dignity and respect they deserve, we must do everything possible to encourage cannabis employers to be socially responsible and labor friendly.

On that note, the importance of unions to African Americans and Latinos, the primary victims of the war on drugs, should not be underestimated. Research demonstrates that unionized workers of color earn a “union premium” in the form of higher wages and better health-care and retirement benefits, as well as access to family and medical leave benefits.

My Company, Vireo Health, is proud to be the first Registered Organization to sign a Collective Bargaining Agreement.

Lastly, to help break the cycle of poverty and pave a road to the middle class, a portion of the tax revenues generated by legalization should be allocated to fund college scholarships for formerly incarcerated individuals.

Now that I’ve attempted to address some of the social justice issues at hand, I’d like to offer some thoughts on regulatory matters.

By way of background, every state that has implemented an adult-use marijuana program has used their existing medical marijuana program as the foundation for expansion.

Even in the best-case scenario, it will take some time to launch and regulate a comprehensive adult-use program. Therefore, in the interim, the State ought to consider strengthening its Medical Marijuana Program as follows:

* Expand patient access by increasing the number of medical marijuana dispensaries that each Registered Organization can operate;

* Expand patient access by allowing any medical practitioner licensed to prescribe opioids to join the medical marijuana program and certify patients, and by allowing practitioners to certify patients with any appropriate medical condition;

* Reduce economic barriers to medicine by allowing patients to purchase flower, while simultaneously launching a public health campaign to encourage vaporization instead of smoking;

* And promote diversity in today’s medical marijuana program by adding new registered organizations that qualify as minority- and women-owned businesses.

I want to acknowledge the fact that Etain Health, one of the first five Registered Organizations in New York, is a women-owned cannabis business. We must embrace more businesses like theirs and work together to make New York’s cannabis industry, a national leader in diversity and inclusivity.

Thank you all for your work on this important issue and for allowing me to share my thoughts on the legalization and regulation of marijuana for adult-use.

I stand ready to assist you and your legislative colleagues in any way possible on this matter.

Thank you.