New York state regulators are, for the first time in the country, giving people with cannabis convictions a concrete head start in the state’s cannabis industry. And when that industry launches, New York City’s mayor said on Thursday that he intends to “invest early and meaningfully.”
The state’s Cannabis Control Board, within the Office of Cannabis Management, held a meeting on Thursday and swiftly approved a proposal to allow “justice involved” applicants — or those who have a record of cannabis conviction, or have a parent or guardian with one — to apply for conditional dispensary licenses before other entities, like the state’s medical cannabis industry, are allowed to do so. The “conditional” licenses are the first adult use retail licenses made available in the state, and will be good for four years, according to the proposal, which is now subject to a 60-day public comment period.
Specifically, an applicant must have been convicted of a “marihuana-related offense” in New York State before March 31, 2021 (when former Gov. Andrew Cuomo signed the Marijuana Regulation and Taxation Act, or MRTA), or had a “had a parent, legal guardian, child, spouse, or dependent” with such a conviction before that date, according to the resolution.
New York regulators have been taking a first-of-its-kind approach to cannabis equity. On Feb. 22, New York Gov. Kathy Hochul signed a bill that allows hemp farmers to cultivate and distribute cannabis for adult use ahead of the broader launch of the state’s adult use industry. It was a needed boost for the state’s hemp industry, which has been floundering due to a glut that sent prices crashing, and delayed rules that suspended farmers and left economic margins withered. Those conditional licenses will sunset next June.
“From a climate perspective — I know I always talk about this, but — it’s great too, because it’s very low impact and we’re enabling hemp farmers opportunities to grow,” Board member Jen Metzger said during the meeting. “I also just want to make sure we’re providing opportunities to growers that meet the social and economic equity criteria of the MRTA.”
Combined, the bill signed in February and the proposal adopted Thursday represent the first time a state has given equity and “justice involved” applicants such a head start across the cannabis supply chain. Chris Alexander, executive director of the OCM, thanked Hochul during the meeting for giving regulators the “tools” they need to make New York the “first state to set up our adult use market using an existing farmer population to supply that market and using sustainable practices and outdoor cannabis.”
“We’re jumpstarting the cannabis industry today and its investment into the communities that are most impacted by the colonization of cannabis prohibition,” Alexander said.
Board member Reuben McDaniel gave an update on the $200 million private-public equity fund that Hochul announced with her budget plan. The fund will have resources available to equity applicants who wish to open “retail dispensary locations across the state in high traffic and commercial areas,” Alexander later said, which will be “renovated and outfitted by [Dormitory Authority of the State of New York] and its partners,” will the goal of providing turnkey or turnkey-ready sites to license applicants.
Alexander emphasized that New York cannabis regulators are looking to other states to learn from their equity lessons.
“We’ve seen how access to capital and real estate have been significant barriers to getting equity entrepreneurs into the space. And so we’re doing the work now to remove those barriers and provide real, meaningful support,” Alexander said, referencing Hochul’s formal announcement on Thursday about what is now being called the “Seeding Opportunity Initiative.” This initiative comprises the three announced efforts: the conditional hemp licenses, the conditional dispensary licenses to those convicted of cannabis offenses, and the $200 million equity fund.
“The hemp farmers in the Farmers First Program,” as the program providing them conditional licenses is now being called, “will soon be able to grow the first adult use cannabis in New York, and they will be supplying flower for the product that will line the shelves of dispensaries owned by equity entrepreneurs participating in the Equity Owners League Program,” Alexander said, referencing the name for the proposal adopted Thursday. “Those participants will be supported by real investments.”
Tremaine Wright, head of the Cannabis Control Board, referenced the “huge lift” the regulatory board has made toward MRTA’s equity goals, one of which is to allocate 50% of all licenses to equity applicants.
“I’m really happy that we have gotten to this point and that we have been able to come together and build it, I think will be a model – or hopefully a model – for others to look at how it might be possible to bring to fruition the goals of equity in the program,” Wright said.
Adult use regulations are expected “late winter or early spring,” Freeman Klopott, OCM spokesperson, told Cannabis Wire. There was no further mention of these pending rules during Thursday’s meeting, though a press conference was called for immediately after the meeting.
Also on Thursday, New York City Mayor Eric Adams spoke about the Rebuild, Renew, Reinvent: A Blueprint for New York City’s Economic Recovery, which includes cannabis, and a priority to “build the country’s most equitable cannabis industry, in partnership with state and local leaders.”
“The administration is committed to ensuring that the communities that have been most impacted by the war on drugs benefit most from the industry,” the Adams administration noted in the blueprint. “We will invest early and meaningfully in developing the sector equitably, learning from the experiences of other cities and states.”
The blueprint includes some more specific details, from outreach and community engagement to increase participation in the cannabis industry, to technical assistance, legal services, and marketing as applicants wind through the licensing process, as well as “help businesses access financing.”
Meanwhile, New York regulators have issued requests for information and proposals to learn who, specifically, in the private investment industry is interested in getting New York’s cannabis equity fund off the ground, and which company is up to the task of tracking the state’s cannabis from seed to sale, as Cannabis Wire first covered.
