| Outside investors and new regulatory measures are about to give New York's struggling cannabis industry a boost. This week, a marijuana museum backed by a Las Vegas nightclub impresario and an investment manager will open in the affluent SoHo neighborhood of Manhattan, just as more than 100 new dispensary licenses go to New Yorkers previously arrested for cannabis crimes. The moves come as more out-of-state businesses flood in, and regulatory efforts intensify to try to overtake the booming black-market marijuana market. The most prominent example of New York's developing market yet will be the House of Cannabis (or THC NYC), which will open April 7 in a five-story landmark building in SoHo. An experiential museum that touts pot's cultural impact, it's the brainchild of Robert Frey, the company's chief executive officer, who also co-founded Pure Management Group, the creator of Pure Nightclub in Las Vegas as well as Pussycat Dolls Lounge. He also previously ran a Nevada cannabis company. The 30,000-square-foot space, leased for 10 years, was one of the city's largest real estate deals of 2022. It shows how even as the heavily regulated new industry is being used to make people with past cannabis arrests the first dispensary owners, the city that spawned Wall Street is also giving rise to more market-driven ideas.  THC NYC's SoHo building. Source: THC NYC In a March 29 tour of the site — still under construction — a "disorientation room" of wavy mirrors led to a glowing green space that played a mashup of cannabis-related clips (think Willie Nelson, Snoop Dogg with Martha Stewart, and a cameo by Nancy Reagan). Other exhibits, designed by various artists, told the story of personal struggles with marijuana arrests, showed flickering films of the brain under the influence of marijuana, and isolated different smells from essential oils of cannabis plants. Frey said he came up with the concept to meld his nightclub and cannabis expertise after looking at places including the Museum of Ice Cream and the Tenement Museum, both in New York, and the Slime Factory, an amusement center in New Jersey. "We're educational, we focus on music, art, film, science — you don't see that in a nightclub," Frey told me. The museum has cost $15 million so far including its lease, and plans to charge from $25 to $75 for admission, Frey said. A retail space on the main floor will feature live glassblowing, and sell lifestyle products. The top floor is a botanical-themed space full of plush green chairs and plants that Frey anticipates will rent out for events, starting at $50,000. The investment was led by Mitchell Baruchowitz, managing partner of Merida Capital Holdings, with around $350 million under management, across 60 to 70 companies. Merida clients, mostly high-net-worth individuals, also invested, said Baruchowitz. He sees THC NYC as a great investment, especially amid tough times for marijuana stocks. "We think not only will it generate positive cash flow," he told me, "but other media and event companies are going to want to open other locations, or just buy it." While no marijuana will be sold on premises, Frey and Baruchowitz said they hope the space will be a platform for New York's cannabis entrepreneurs, and have dedicated some of the ground-floor retail space for them to hand out flyers and pitch their wares. 100 new licensesNew York's legal cannabis industry is also about to get a boost from 104 more licenses for retail dispensaries, to be announced Monday by New York's cannabis regulator. They'll go to those who meet criteria of the state's "social equity" initiative, which seeks to help people with past cannabis arrests (who are disproportionately Black) participate in the profits of a new industry. The state's effort has been criticized as costly and slow, thus contributing to the wave of illicit shops. So far, more than 60 licenses have been awarded, but New York City has only has a handful of legal dispensaries, most of them clustered together. Some of the new licenses will go to the borough of Brooklyn, after a legal challenge that had delayed distribution of licenses there and in other regions of the state was decided in the regulator's favor. "Within a month, we'll have 200 people with licenses in hand looking to open a dispensary," Axel Bernabe, senior policy director of New York state's Office of Cannabis Management, told me in a phone interview before the announcement. "That will change the dynamic" with the illicit market, he said, and efforts to close it down are increasing. Among them is a partnership with the office of Manhattan's district attorney, which is building out its team to address the issue. The museum and new licensees are just two examples of a wave of new business ventures in the city. Other companies joining New York's increasingly competitive race to capture the cannabis consumer include Phoenix-based Tilt Holdings, which has a partnership with the Shinnecock Indian Nation. They plan to sell cannabis in one of the state's richest ZIP codes, Long Island's Southampton, at a shop called Little Beach Harvest. THC drinks maker Cann announced it will launch in New York this April. And last week Jetty Extracts, a California-based vape brand, said it would launch the most popular strains from its "High THC" vape cartridge line, with sales starting at New York dispensaries including Union Square Travel Agency, Housing Works Cannabis Co. and Smacked Village. The arrival of out-of-staters doesn't mean locals lose out. New York's regulations require producers to buy from local marijuana farmers and sell through its licensed dispensaries. THC NYC, setting a different sort of example, will hire around 20% of the museum's staff through A Second U Foundation, an educational organization that helps those leaving prison rebuild their lives. | 
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