It’s official: New York will open adult-use marijuana retail to multistate operators

OG Article: here

View our Fair Use Policy: here

By Chris Roberts, Reporter

New York regulators voted Tuesday to allow the state’s medical marijuana operators to apply for adult-use retail licenses.

That means the multistate operators who years ago snapped up a majority of the state’s 10 “registered organization” permits will enter what observers say could be the largest market on the East Coast.

Under the resolutions the Office of Cannabis Management approved Tuesday, regulators will accept applications seeking a retail or microbusiness license from Oct. 4 through Dec. 23.

Regulators also will accept applications from registered organizations during a still-unspecified window “to be set by the Office.” That action was approved in a separate resolution.

“Today marks a pivotal step toward expanding and sustaining the state’s medical program and creation of an economically viable and equitable adult-use cannabis industry in New York,” Barry Carmody, a spokesperson for the New York Medical Cannabis Industry Association (NYMCIA), said after a Cannabis Control Board meeting in Albany.

The NYMCIA represents eight of the existing MMJ licensees, including major MSOs such as New York-based Acreage Holdings and Columbia Care, Chicago-headquartered Cresco Labs and Green Thumb Industries and Massachusetts-based Curaleaf Holdings.

The vote, finalizing a May proposal by the OCM, means:

• Litigation aimed at opening licensing to all applicants might be moot. The lawsuit was brought by some of those same MSOs, which sued the state in March under the name Coalition for Access to Safe and Regulated Cannabis.

• The state’s social equity applicants and licensees are feeling abandoned and betrayed. Many of them are still waiting to open their doors after bureaucratic delays and separate litigation encumbered the state’s ambitious Conditional Adult-Use Retail Dispensary (CAURD) program.

The vote came a week after the CEOs of four multistate operators implored New York Gov. Kathy Hochul to allow them to enter the state’s adult-use market “without delay.”

Small businesses unhappy

“We relied on you,” Jeanette Miller, a Buffalo-area cannabis farmer, told the OCM board and staff at an impassioned meeting, reminding them of the promises that New York would allow small businesses first crack at the adult-use market.

The OCM did not immediately respond to MJBizDaily’s request for comment.

“Today’s Cannabis Control Board meeting opened the door for big cannabis to come in and compete with New York-based businesses,” the Cannabis Association of New York (CANY), which represents small and state-based businesses, said in a statement.

To help level the playing field, the CANY made three demands of New York regulators:

• Reform the state’s potency tax that charges a higher rates for concentrates.

• Impose identical canopy limits on “registered organizations” (ROs) and small businesses.

• Crack down on the illicit market in the state. Estimates vary, but officials have said there are as many as 2,000 unlicensed sellers in New York City alone.

New York legalized adult-use cannabis in March 2021, but so far, adult-use retail licenses have been available only to “impacted individuals” of the war on drugs and certain nonprofits – to whom the state also promised 50% of all licenses.

Although hundreds of CAURD permits have been awarded, only 23 of those licensees are open for business, five of which are delivery-only.

That means CAURD applicants are burning through savings on real estate that isn’t generating revenue while small farmers – who lack the promised access to licensed retail – are watching their harvested crops go stale.

Lawsuits still in play

Meanwhile, litigation still looms over the adult-use licensing process in New York.

Two separate suits against OCM are still pending: the one filed by the MSOs and another by a group of “service-disabled veterans” shut out from the CAURD program. The group filed a lawsuit in August that challenged the legality of the CAURD program.

The OCM went into executive session to discuss those lawsuits after the public portion of Tuesday’s meeting ended.

It’s unclear what’s next for the CAURD program, which legal observers have said might be unconstitutional.

Small-business advocates have unsuccessfully begged Gov. Kathy Hochul to recall the Legislature into a special session to specifically codify the CAURD program.

“I don’t believe CAURD’s going away,” said Dasheeda Dawson, the director of Cannabis NYC, whom Mayor Eric Adams appointed last October.

During Tuesday’s meeting, Dawson spoke out against the ROs and also had choice words for the other litigants.

“Without a shadow of a doubt, I stand here firmly to say, ‘No to RO,’” she said. “We know on the record what people are doing to block (New York’s rollout), and we cannot reward them.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.