Cannabis industry hopefuls packed into the Adam Clayton Powell, Jr. State Office Building in Harlem on Monday for the Cannabis Control Board’s most anticipated meeting of the year.
The meeting, which covered more ground than any other in 2022, brought the forthcoming adult use industry a big step closer to launch. But there’s still a ways to go before the first transaction takes place.
The big news: New York regulators announced the “first wave” of successful Conditional Adult Use Retail Dispensary (CAURD) applicants, or in other words, New Yorkers now know who will make the state’s first legal cannabis sales. The crowded room erupted into applause when regulators approved the 36 applicants. Among the 36 were eight successful non-profit applicants. Regulators received more than 900 applications for these conditional retail licenses. Due to an ongoing lawsuit from an applicant challenging the CAURD license requirements, regulators revealed on Monday that they were unable to award another 18 licenses.
Cannabis sales will happen in two phases, as Cannabis Wire has reported. This first phase is for “justice-involved” individuals and non-profits, who are given a head start. Regulators plan to award up to 175 of these conditional retail licenses, including the first batch awarded Monday. And they are working toward the goal of first sales — which CAURD licensees can do by delivery as their storefronts are built out, regulators said Monday — beginning before the end of 2022.
On Monday, regulators also took a big step toward the second phase of sales, which is for all applicants, and is likely to kick off next year. The Board submitted for 60-days of public comment hundreds of pages of proposed rules for the adult use cannabis industry. The rules, regulators noted, are meant to “maximize consumer choice and prioritize small businesses by creating the tiered market structure.” The rules do not yet include the forthcoming standalone delivery or onsite consumption licenses. (Read Cannabis Wire’s comprehensive analysis of the proposed rules.)
Lawmakers and regulators have been steadfast in their aim to build what they hope will be the country’s most equitable cannabis industry. Tremaine Wright, chair of the Cannabis Control Board, which sits within the Office of Cannabis Management, called Monday’s meeting a “monumental moment.”
Chris Alexander, executive director of OCM, gave a report that covered OCM’s work over the past year, including the expansion of the medical cannabis program, the formalization of the cannabinoid hemp program, and the awarding of conditional licenses from seed to sale. (Conditional cultivation and processing licenses have gone to the state’s existing hemp farmers, who will now supply CAURD licensees with the first adult use products for sale.)
“Now, we move forward,” Alexander said. “We have started with equity, but we don’t stop.”
Board member Reuben McDaniel, president and CEO of the Dormitory Authority of New York (DASNY), gave an update. McDaniel held up images of renderings of future CAURD-run storefronts, which will be built out through the state’s $200 million Social Equity Fund, which Gov. Kathy Hochul announced in January. The renderings showed basic shops that had a separate entrance for delivery and an “express” lane.
However, McDaniel did not provide specifics on whether leases for successful CAURD applicants have been secured, or where, specifically, the shops will be located. (The fund is public-private, as Cannabis Wire has reported, and the state has contributed its $50 million; however, no additional funding has been announced.)
Cannabis Wire asked Alexander after the meeting for updates on how much of the $200 million Social Equity Fund had been raised, and how many leases had been secured.
“I’m not sure of how much, the specifics of where the fund is exactly at this point in time. That’s a question you can refer to DASNY,” Alexander said. Regarding leases, Alexander added, “That was a largely DASNY project, so we’re trying to just finish that work now.”
OCM chief of staff Axel Bernabe spoke briefly during the meeting about the two-tiered system, which sets up cannabis regulation in New York similar to how the state treats alcohol. In short, it means that an entity that holds a retail license cannot hold a license elsewhere in the supply chain.
“If you don’t have a market that’s grounded in small and medium sized enterprises, if you don’t have a market that controls for market concentration and the exertion of market power, you’re going to have a really hard time leveling the playing field in an industry that’s just starting,” Bernabe said.
Damian Fagon, chief equity officer for OCM, said that one of the “defining components” of the state’s equity efforts will be related to communities disproportionately impacted by enforcement of cannabis prohibition, or CDI. The information that OCM is compiling, Fagon said, “will identify those communities most harmed under prohibition block by block, and it will set the parameters for how individuals who lived in those communities will be supported with licensure grants, loans, technical training, and millions in community reinvestment funding.”
“The data is irrefutable. Nowhere in this country was the enforcement of cannabis prohibition weaponized more historically against under-resourced communities than right here in New York,” Fagon said, sharing some data. Between 1980 and 2020, there were more than 1.2 million cannabis-related arrests across the state of New York, with roughly 1 million of those arrests concentrated within the five boroughs of New York City, he said. And, of the 400,000 cannabis-related convictions within that time period, more than half (54%) were Black people. Notably, 90% of those arrested, Fagon said, were men.
“The team here acknowledges that in our efforts to address the harm done, we risk worsening existing gender disparities in cannabis business ownership,” Fagon said. “We fully intend to redouble our efforts to ensure that women applicants receive the support they need to access this opportunity.”
“This work will continue for many, many years to come,” Fagon continued. “And when they tell us there are easier ways to do this, we will ask: easier for who?”
Assembly Majority Leader Crystal Peoples-Stokes, one of two key lawmakers to spearhead the passage of the Marihuana Regulation and Taxation Act (MRTA), was the first to comment during a public comment period. Ten others followed.
Peoples-Stokes said she was, broadly, “proud” of Monday’s proceedings, but that it was also “disappointing” that her region of Buffalo was left out of the announcement. Buffalo and a handful of other regions, including Brooklyn, were excluded from having cannabis licenses awarded because of the aforementioned lawsuit.
“I know we’ll get through whatever these people want to do or try to do to us in the court system,” Peoples-Stokes said, adding that it’s “sad” that “equity is being tried in court.”
Dasheeda Dawson, founding director of Cannabis NYC within the NYC Department of Small Business Services, also spoke during the public comment period about her work among various agencies.
“Despite being new to the role, as my record of testimony and advocacy reflects, I’ve been fighting for the plug to be legit in New York and across the country for many years,” Dawson said, adding that she was among the millions of “closeted” cannabis consumers.
Dawson said that, in the coming months, “curated Cannabis NYC programming” will be rolled out. “As a public servant, I’m here to be a bridge,” Dawson said. “The work continues.”
Other public commenters asked questions about updates regarding the lawsuit, whether regulators plan to integrate existing smoke shops, the application process, which some felt was onerous and exclusionary, and concerns over the balance of equity and investment restrictions.
David Feldman, a cannabis adviser and lawyer, said that the cannabis industry was “built with capital” that came from wealthy people, family offices, and crowdfunding, and expressed concern about restrictions that don’t allow for investments across multiple companies.
“Many of us are concerned that while you want to make sure that big cannabis, big tobacco, big alcohol don’t dominate here,” Feldman said, “most of us agree with that, we want to make sure you don’t throw the baby out with the bathwater.”
Scheril Murray Powell, a lawyer and COO for the nonprofit JUSTÜS Foundation, commended the board.
“I appreciate the commitment to sustainability. I appreciate the commitment to public safety,” Powell said.
Regulators also revised proposed labeling and packaging rules to loosen some restrictions. For example, the public health warning label now no longer needs to be placed on the front.
Metzger said that New York is “leading” the way, nationally, in packaging rules with sustainability in mind.
“Sustainability and equity are mutually supporting goals,” Metzger said. “We have seen unsustainable, unequitable development of this industry in other states. We’re setting the industry on a new course here.”
Questions about unlicensed cannabis sales have loomed large in this time period before licensed sales launch. Cannabis Wire has extensively reported about the proliferation of unregulated cannabis sales, concentrated in New York City.
Those questions also arose during a press gaggle after the meeting, but specific inquiries related to enforcement against unlicensed operators yielded no new information.
Additionally, Alexander said there will be another Cannabis Control Board meeting before the end of the year. And, the Cannabis Advisory Board, which has not met since June, will meet on December 1.
Here are the successful licensees (descriptions provided by OCM):
· Housing Works Cannabis, LLC (HousingWorks): Housing Works is a healing community of people living with and affected by HIV/AIDS, including the recently incarcerated. The New York City-based nonprofit is the nation’s largest community-based AIDS service organization as well as the nation’s largest minority-controlled AIDS organization. It serves over 15,000 people annually through primary and mental health care, case management, reentry services, job training, behavioral health, and more. Their Justice Initiative, launched in 2018, focuses on catering those services to New Yorkers recently released from incarceration, tailoring their work to the specific needs of that population.
Housing Works operates 12 thrift shops, a bookstore café, and a processing and distribution center; all of which employ graduates of their job training and peer training programs and are designed to give them work experience that will help them build for the future.
· The Doe Store LLC (Doe Fund): The Doe Fund was founded in 1987 to break the vicious cycle between mass incarceration, criminal recidivism, and intractable poverty. The Doe Fund is known for operating their landmark initiative, “Ready, Willing & Able,” which provides temporary work, transitional housing, continuing education, career training, and emotional counseling to New York City’s marginalized populations—with a specific focus on supporting people released from prison.
Many Ready, Willing & Able participants pursue the Culinary Arts as their occupational training track, paving the way for diverse careers in the food service industry. Dishes by Doe is a full-service, cost-effective catering business that also provides hands-on training and paid work for Culinary Arts program trainees and graduates. Dishes by Doe caters for all occasions, including conferences and fundraising events.
· Urban Weeds LLC (Urban Upbound): Urban Upbound is a Queens-based organization that assists individuals, including formerly incarcerated New Yorkers, looking for employment. The services they provide include 1-on-1 career counseling, sector-focused job readiness training, financial counseling and job placement and retention services for unemployed and underemployed youth and adults.
Additionally, Urban Upbound operates the Urban Upbound Federal Credit Union (UUFCU), which serves as an important pillar of the Urban Upbound model and an anchor in the community, connecting Queens residents to financial products that promote long-term asset building and economic mobility that are not available through mainstream banks.
· CWS Holdings I, LLC (Challenge Industries): Challenge Industries is a non-profit organization based in Ithaca, New York that for over 50 years has been committed to creating pathways to employment for people with disabilities or barriers to resources such as justice-involved individuals. Since 1968 Challenge has served over 700 individuals involved with the justice system by providing them with programs that range widely- from pre-vocational services, which offer training and experience in general work skills, to direct placement, which provides jobseekers with the tools and supports to secure full-time employment with opportunity for career advancement. Regardless of funding source each of these programs is highly personalized to best support participants in forging their paths to greater self-sufficiency.
Challenge is a partner agency in Workforce Development and has close working relationships with the Tompkins County Department of Social Services, local community service agencies and schools, and ongoing relationships with over 250 employers in Tompkins and surrounding counties in upstate New York.
· NYCCABUDS (Center for Community Alternatives): the Center of Community Alternatives has been a leader in community-based alternatives to incarceration for over 40 years. The organization provides services to communities in New York City, Rochester and Syracuse, including gender-based substance treatment and recovery communities, sentence mitigation, court advocacy, workforce readiness, civic restoration services, emergency/transitional housing, student advocacy, violence prevention, and youth mentoring as well as afterschool programming and career exploration for justice involved youth.
Part of the Center of Community Alternatives’ reintegration services include community-based workforce programs that train justice-involved individuals to prepare for, find, keep and advance in gainful employment.
· Kush & Kemet LLC (LIFE CAMPS): Founded in 2002, LIFE Camps (Love Ignites Freedom Through Education) is a community organization that is a leader in violence prevention and intervention in the country. Investing in local youth’s educational and social development while offering resources for families that have been inaccessible in the past.
LIFE Camp says it has contributed to a decline in crime since its founding and through alternative community initiatives that provide mental, physical, and emotional wellness needs of parents and families impacted by the trauma of gun violence.
· On Point Cannabis, INC. (Broome County Urban League): Since 1968, the Broome County Urban League (BCUL) has provided social services for their local community in Binghamton, New York. The BCUL focuses on youth development through after-school programs, tutoring and mentorship opportunities, technology classes, and workforce development. BCUL is committed to supplying justice-involved individuals with resources and education. All programs are available for all, regardless of age.
From 2012-2018 the BCUL co-led a work program that employed justice-involved individuals and others from hard-to-reach populations providing vocational opportunities to increase employability skills.
· GOTHAM CAURD (STRIVE, Inc): Founded in 1984, STRIVE has been a national leader in helping those facing the biggest societal barriers to employment. Providing training and support to justice involved individuals, STRIVE has worked to build careers and assist individuals in achieving economic empowerment.
Through their re-entry programs STRIVE has administered (10) federal grants, serving (3,500) justice-impacted adults and youth, across (10) U.S. cities, including New York State. With a long history of serving justice involved individuals, STRIVE has transformed the lives of more than 80,000 participants by successfully helping them enter and re-enter the workforce through their STRIVE Career Path and STRIVE Future Leaders.
New York City region:
· Nube NYC LLC – Owned by Hector Guerrero, Naiomy Guerrero, Hector Guerrero and Jarron Parnell in the New York State Borough of The Bronx. For (4) years Hector Guerrero, a justice involved applicant, owned & operated Manuel Guerrero Jr a courier and packaging supply business that provided courier services enabling customers to order from various consumer packaged goods and retailers.
· Carl M Anderson III – Owned by Carl Anderson in the New York State Borough of The Bronx. For (6) years Carl Anderson, a justice involved applicant, owned & operated C. Marshall Anderson Consulting, LLC based out of New York City.
· Royal Leaf NY – Owned by Angell Turuseta and Emely Chavez in the New York State Borough of The Bronx. For (4) years Angel Turuseta, a justice involved applicant, owned & operated A & F Fashion- a New York City Based bargain wholesale vendor who supplied sportswear and leisure wear.
· Gabbys Green LLC– Owned by Keith Dalessio in the New York State Borough of Queens, New York. For (8) years Keith Dalessio, a justice involved applicant owned & operated Gabby Pets INC. a pet supplies retail store in The Bronx, that sold small animals and provided training and grooming services.
· CGG Enterprises Inc.– Owned by Carson Grant in the New York State Borough of Queens, New York. For (8) years Carson Grant, a justice involved applicant, owned & Operated CGG Enterprises Inc., a retail and online sales store located in Springfield Gardens, New York, that offered packing, shipping, and delivery services.
· Suzanne M Furboter – Owned by Suzanne Furboter and Fernando Pena in the New York State Borough of Queens, New York. For (13) years Suzanne Furboter and justice involved applicant, Fernando Pena owned & operated Meatman, Inc a Gastro Pub and Wine Bar located in Astoria, New York.
· Anthony Crapanzano – Owned by Anthony Crapanzano and Candace Lee in the New York State Borough of Queens, New York. For (8) years Anthony Crapanzano, a justice involved applicant, owned & operated Prime Foods Enterprise LLC a Delicatessen restaurant located in Waretown, New Jersey.
· Smacked LLC- Owned by Roland Conner in the New York State Borough of Manhattan, New York. For (6) years Roland Conner, a justice involved applicant, owned & operated Advantage Real Estate Group LLC a property management company
· Gabriel Marin – Owned by Gabriel Marin in the New York State Borough of Manhattan, New York. For (3) years, Gabriel Marin, a justice involved applicant, owed & operated GAM RENO LLC a buy, sell, and install business that served residential properties.
· Planet 51 LLC – Owned by Nicholas Koury in the New York State Borough of Manhattan, New York. For (5) years Nicholas Koury, a justice involved applicant, owned & operated Foster House Studios- Recording studio in Albany, New York.
· Florisun LLC – Owned by Keshawn Warner, Richard Rainone, and Christopher Vianelle in the New York State Borough of Manhattan, New York. For (7) years, Keshawn Warner, a justice involved applicant, owned & operated The Pharmacy Harlem @ LLC, a Retail pharmacy and over the counter medication sales.
· Eastern Holdings 88 LLC – Owned by Yan Jin Chen and Zu Rong Chen in the New York State Borough of Staten Island. For (8) years Zu Rong Chen, a justice involved applicant, owned & operated Long Wong Bakery II, Inc. a bakery serving Brooklyn communities that prepared various kinds of fresh baked goods from scratch for customers.
· SAMJNY Holdings LLC – Owned by Mohamed Elgaly and Shlomo Weinstock in the New York State Borough of Staten Island. For (8) years, Mohamed Elgaly, a justice involved applicant, owned & operated Vape Guys LLC a physical retail stores in Staten Island that offered safe, legally compliant smoke vape products to promote health and leisure.
· Stage One Cannabis LLC – Owned by Nathaniel Innes, Galina German-Innes, Sugey Mirsky, and Joshua Mirsky in the Capital Region of New York State. For (11) years Justice involved applicant Joshua Mirsky owed & operated Foster House Studios- Recording studio located in Albany, New York.
· D-Andrews LLC- Owned by Donald Andrew in the Capital Region of New York State. For (10) years, Donald Andrew, a justice involved applicant, owned D Andrew LLC and operated Vaped City Smoke Shop: a retail storefront specializing in smoking, vaping, CBD products, and accessories in Scotia, New York.
· Essential Fowers– Owned by Matthew Robinson in the Capital Region of New York. For (3) years Matthew Robinson, a justice involved applicant, owned & operated Bold Mold Eliminators, a payroll inventory company based out of Albany that provided customer cleaning, construction point of sale, and talent acquisition.
· Capital District Cannabis & Wellness Inc. – Owned by James Frese and Pasha Adams in the Capital Region of New York. For (7) years, justice involved applicant, James Frese owned & operated Saratoga Catering Company LLC, a deli & pizzeria serving produce, sandwiches & woodfired pizza, plus catering services for parties and events located in Albany, New York.
· William Durham – Owned by William Durham in the Southern Tier Region of New York State. For (5) years, William Durham a justice involved applicant, Durham owned & operated WH Convenience Store, a convenience store in Downtown Binghamton, New York that supplied lotto, tobacco, and cold and hot food.
· Union Chill Cannabis NY LLC – Owned by Joshua Canfield and Union Chill Cannabis Company LLC in the Southern Tier Region of New York State. For (3) years, Joshua Canfield, justice involved applicant, owned & operated Next Level Wellness, a licensed Hemp Retailer New York State.
· Cured NY, LLC– Owned by Francis Russo in the Mohawk Valley Region of New York State. For (6) years Francis Russo, a justice involved applicant, owned & operated Premium MFG, LLC, an Oneonta-based design & printing business that offers graphic design products & services through its e-commerce store.
· Brian Stark Enterprises LLC– Owned by Brian Stark in the Long Island Region of New York State. For (11) years Brian Stark, a justice involved applicant, owned & operated Aqua wash laundry corp., a self-serve laundry mat based out of Brooklyn that provided wash & fold services, dry cleaning services, and retail items for laundry.
· Albert D Capraro– Owned by Albert Capraro in the Long Island Region of New York State. For (10 years), Albert Capraro, a justice involved applicant, owned & Operated Long Island Glass Replacement Inc, a retail storefront that sold glass doors, showers, windshields, and installations in Commack, New York.
· Strain Stars LLC – Owned by Kamaldeep Singh, Tushar Mallick, Jasmin Kaur, Kamaldeep Singh, Darminder Sing, and Gurmeet Sing in the Long Island Region of New York State. For (5) years Kamaldeep Singh, a justice involved applicant, owned & operated Whitestone Mart Inc, a gas station in Whitestone, New York with a retail storefront attached to it. Singh also holds a hemp cannabinoid retail license issued by The Office of Cannabis Management.
· Root 13, LLC- Owned by Harpreet Singh and Manjit Singh in the Long Island Region of New York State. For (2) years Harpreet Singh, a justice involved applicant, owned & operated Just Accounting, LLC an accounting, tax, bookkeeping, and payroll company based out of Flushing, New York.
· Growth Industries NY, LLC- Owned by Daniel Connolly and GI New York, LLC in the Long Island Region of New York State. For (4) years Daniel Connolly, a justice involved applicant owned & operated Hemp Clouds, LLC, a Retail Smoke Shop in Centereach, New York.
· Keep it 100 LLC- Owned by Marquis Hayes, Christina Johnson, James Kahn and Kim Stetz in the Long Island Region of New York State. For (5) years Marquis Hayes, a justice involved applicant, owned & operated Brown Butter New York, a high-end catering & specialty foods company.
· Hydo Phonics – Owned by John Alvarez and Bryan Whalen in the Long Island Region of New York State. For (5) years, John Alvarez, a justice involved applicant and licensed contractor owned & operated J & G Construction Management a retail sale, home construction and remodel servicing business in Suffolk country.
· Brent L Rogers- owned by Brent Rogers in the North Country Region of New York State. For (6) years Brent Rogers, a justice involved applicant, owned & operated Beechnut Ridge Property Management as a General Contractor.