New York Opens Doors for Medical Cannabis Operators to Dive into Adult-Use Retail Market

NEW YORK- In a significant move on Tuesday, New York regulators gave the nod for the state’s medical marijuana entities to file applications for adult-use retail licenses. This opens the arena for multi-state operators (MSOs) holding a lion’s share of the state’s ten “registered organization” permits to tap into what might soon become the most lucrative market on the East Coast.

From October 4 to December 23, the Office of Cannabis Management (OCM) will be accepting applications for retail or microbusiness licenses. In addition, a distinct, yet to be determined period has been set aside for registered organizations to submit their applications.

“This decision signals a monumental leap towards solidifying New York’s medical program and laying the groundwork for a thriving and fair adult-use cannabis sector,” commented Barry Carmody, spokesperson for the New York Medical Cannabis Industry Association (NYMCIA), post a Cannabis Control Board meeting in Albany.

The NYMCIA umbrellas eight of the current MMJ licensees, featuring significant MSOs such as Acreage Holdings, Columbia Care, Cresco Labs, Green Thumb Industries, and Curaleaf Holdings.

Implications of the Decision This verdict, cementing a proposal from May by the OCM, has several ramifications:

• The ongoing lawsuit by several MSOs aiming to broaden the licensing to all applicants might now be rendered redundant.
• Local social equity applicants feel marginalized, with many still in the waiting line due to administrative delays and various litigations obstructing the state’s Conditional Adult

-Use Retail Dispensary (CAURD) program.

• Just a week ago, CEOs from four multistate operators had urged New York Governor Kathy Hochul to promptly let them access the state’s adult-use market.

Discontent Among Small Businesses

Small business voices are rising in discontent. Jeanette Miller, a cannabis farmer from the Buffalo area, expressed her dismay at the recent turn of events. “We banked on you,” she said, referencing the initial promise that New York would prioritize small businesses for the adult-use market.

Reacting to the recent developments, the Cannabis Association of New York (CANY), which champions smaller, state-based enterprises, stated that the decision has paved the way for “big cannabis” to overshadow local New York businesses.

The CANY, advocating for a level field, has urged regulators to:

1. Overhaul the state’s potency tax that levies steeper rates on concentrates.
2. Implement consistent canopy limitations on both registered organizations and small ventures.
3. Intensify crackdown measures on the illicit market, especially given that New York City alone allegedly harbors up to 2,000 unauthorized sellers.

The Bumpy Road to Legalization

Ever since New York legalized adult-use cannabis in March 2021, licenses for retailing were exclusively available to those impacted by the war on drugs and certain non-profits. The state had also committed to allocating 50% of all licenses to these groups.

However, of the numerous CAURD permits granted, only 23 licensees have commenced operations, with a mere five offering delivery-only services. This delay has resulted in significant financial drains for applicants and small farmers, with many seeing their investment in real estate and crops go to waste.

The Legal Battles Ahead

The licensing process in New York continues to be overshadowed by pending litigations. Two separate suits against the OCM are still active, one spearheaded by the MSOs and another by a consortium of “service-disabled veterans.”

The fate of the CAURD program hangs in the balance, with its constitutionality being questioned.

Although small-business advocates have made unsuccessful appeals to Gov. Kathy Hochul for legislative intervention, Dasheeda Dawson, director of Cannabis NYC, remains optimistic. Addressing the recent meeting, Dawson said, “I firmly believe in the future of CAURD,” while expressing her reservations about the registered organizations.