Medical Marijuana Is Coming to NYC—and Needs Finance, Legal, and Health Care Talent
A few weeks ago, I had the opportunity to speak with Ari Hoffnung, a former Wall Street banker turned public servant turned medical cannabis entrepreneur. For more than a decade, Hoffnung worked at Bear Stearns, where he was a managing director. Not long after Bear imploded in 2008, Hoffnung went to work for the City of New York as deputy comptroller. After a five-year stint in public service, Hoffnung founded Fiorello Pharmaceuticals, whose mission is to "provide patients suffering from debilitating and life-threatening illnesses with compassionate service and access to high-quality medical-cannabis from trained medical professionals."
Recently, Hoffnung was featured in a New York Times article as a leading entrepreneur gunning for one of the five licenses to sell medical marijuana in New York State, where it will be officially legal to sell medical cannabis sometime in 2015. Hoffnung told me about what inspired him to get involved in the medical cannabis business, and about what others can do in order to break into the industry and possibly make it a career. Below is an excerpt from that conversation.
Q: How did you go from working on Wall Street to working in the medical marijuana industry?
A: I always enjoyed finance. I found it challenging, intellectually stimulating, and competitive. But I never found it to be very meaningful on a deeper, personal level. So, when the financial crisis happened, I thought, hey, this is the right time to make a change. And so I left Wall Street for a career in public service working for the City of New York. I really loved it. I was drawn to politics and urban policy. I worked in the New York City Comptroller’s Office where I was able to leverage the financial skills I developed in business school and on Wall Street. I also leveraged my passion for public policy and social change. It was a wonderful opportunity.
As deputy comptroller, I oversaw the city’s $70 billion budget and managed an economic policy think tank. We published two-dozen reports on a variety of topics, including affordable housing, higher education, and other bread-and-butter policy issues. In mid-2013, there was a tremendous amount of public discussion about the impending referendums to legalize marijuana in Colorado and Washington State. It became clear that drug policy was rapidly evolving on the local level, and we thought it would be interesting to explore what similar changes would mean for New York City.
Two things we looked at were the number of New Yorkers who'd benefit from cannabis if it were available in medicinal form, and what it would mean from a budgetary perspective if cannabis were regulated and taxed like in Colorado and Washington. On the medical front, we found that 100,000 New York City residents would benefit from medical marijuana if it were legal, including patients suffering from chronic or severe pain, cancer, multiple sclerosis, seizures, and HIV/AIDS.
On the recreational side, we found that 12 percent to 13 percent of the city's population uses marijuana in any given year. That's nearly one million people. And we estimated that the tax benefits to New York City could be somewhere in the area of $400 million. We also found that this type of reform would yield significant law enforcement savings. Simply put, for too long New York has been locking up a disproportionate number of black and Latino young men, which is not only unjust but also a waste of scarce, public resources.
At the same time that I was conducting this marijuana-related research, my younger brother, then 34, now 35, was diagnosed with stage 4 lymphoma cancer. Seeing someone very close to you suffer is an experience familiar to too many people. Luckily, my brother was living in Israel where medical cannabis is widely available and where oncologists are open to providing this alternative form of medicine to their patients, particularly when conventional medication proves to be ineffective at mitigating the side effects of chemotherapy.
And so, given my personal story, I thought: Let me become an advocate to ensure that New Yorkers who need access to medical cannabis can get it. Like so many other New Yorkers, I firmly believe that medical decisions should be made collaboratively between physicians and their patients. Politics should not be a factor in these decisions. And, over time, because of my finance background, I realized that this could also potentially be an interesting economic opportunity.
What’s really unique about this medical cannabis industry is that there's not only a significant market opportunity but also an opportunity to do good. To me, that's a dream: to be able to work in an industry where you can realize financial opportunity and at the same time help society and individuals.
Q: What advice would you give to students and experienced professionals looking to get involved in the medical marijuana industry in New York?
A: There are a lot of exciting opportunities for young people to learn more about this new industry—and work in it. If you’re a student and serious about getting into this industry, there are many things you can proactively do. For example, take science courses. There’s already a strong need for people with the skills to understand the science of cannabis. Also, seek out history courses to better understand the evolution of drug policy in the United States. Join student groups like Students for Sensible Drug Policy. Go to conferences and educate yourself. Read up on medical cannabis. Get an internship at a cannabis company. And, depending on your geographic region (if you're at the University of Colorado at Boulder, you're in the right place), spend a summer in a state where it's already legal.
For experienced professionals, cannabis companies are already looking for financial and legal talent. I've spoken to many students at law schools and business schools and the interest in the industry is off the charts. Before we know it, cannabis companies will be formally recruiting students at the top law schools and business schools and will be offering the most sought after internship and full-time career opportunities.
Q: What do you make of all the comparisons of medical marijuana to the dotcom boom, like when people call it the potcom boom?
A: Yes, there have been a lot of comparisons. But when people say it's like the tech boom, do they mean it's going to fundamentally reshape the way we live or that it’s a financial bubble about to burst? There's certainly a huge economic potential in this industry. It's been an unregulated, underground industry for the past 80 years. While it's hard to quantify the market size, many estimates are in the $30 billion to $40 billion range. As someone who’s closely studied this industry, those estimates resonate with me.
And as a fifth generation New Yorker, one of the one of the things that I'm really excited about is New York playing a leadership role in the medical cannabis industry, both here in the U.S. and throughout the world. There's so much talent in New York in the areas of health care, marketing, finance, tech, and law—all of which this new industry is really going to need.
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The Marijuana Industry Comes to New York and Everyone Wants In (NYT)
For Pot Inc., the Rush to Cash In Is Underway (NYT)
As marijuana grows into industry, new tips for would-be entrepreneurs (The Buffalo News)
Careers in Cannabis: From Wall Street to High Street (Vault)