New York’s top cannabis regulator made the first legal adult use cannabis purchase in a packed downtown Manhattan non-profit shop on Thursday.
Several state and city lawmakers, regulators, and officials kicked off the historic day with a news conference at Housing Works Cannabis Co. at 750 Broadway in downtown Manhattan, steps from New York University.
“The first legal adult-use cannabis sales mark a historic milestone in New York’s cannabis industry,” Gov. Kathy Hochul, who did not attend the event, said in a statement on Thursday. “Today is only the beginning, and I look forward to continuing our efforts to solidify New York as a national model for the safe, equitable and inclusive industry we are now building.”
Housing Works is a New York City-based non-profit that fights AIDS and homelessness, in part through its bookstore and local chain of thrift shops. Charles King, CEO of Housing Works, said during a Community Board 2 meeting this month that Housing Works is considering opening additional cannabis stores and has looked at locations in Midtown and on the Upper West Side.
“If all goes well this time, a year from now, we would be operating three retail outlets,” King said.
Housing Works Cannabis Co., located in a former Gap clothing store, was packed on Thursday. The shelves included glassware and rolling papers, as well as tote bags.
A number of posters read: “Make love not drug war,” “We’re smoking out stigma,” “To be blunt, your shopping saves lives,” and “Spark up your inner activist.” Another sign noted that “Consuming cannabis is not allowed on this premises,” though consumption spaces will eventually be allowed.
The long and often bumpy road to legal cannabis in New York began well before lawmakers passed the Marihuana Regulation and Taxation Act in March 2021. It took three hard pushes in the legislature for both chambers to come to an agreement and for the governor to sign the bill, as former Gov. Andrew Cuomo also pitched his own legalization plan through the budget three times. Much of the disagreement between lawmakers and Cuomo was over allocation of tax revenue and specific equity provisions. When three-way negotiations finally gave way to a compromise, it was in the midst of turmoil related to harassment allegations against Cuomo.
Hochul took Cuomo’s place in late 2021 and swiftly made cannabis-related appointments. Cannabis didn’t come up during Hochul’s first State of the State speech in January, but her wide-ranging budget plan outlined a first-of-its-kind $200 million public-private equity fund to “promote equity and economic justice in New York’s cannabis industry.” (That fund, as Cannabis Wire has reported, has yet to be fully funded.)
As 2022 continued, the then-newly-formed Office of Cannabis Management, and the Cannabis Control Board that sits within OCM, steadily began to shape the regulations at the foundation of Thursday’s launch.
On Thursday morning, Chris Alexander, executive director at OCM, thanked people like Assembly Majority Leader Crystal Peoples-Stokes and Sen. Liz Krueger, the co-sponsors of MRTA. His voice cracked with emotion. Later, he would be the first customer to purchase legal cannabis at Housing Works Cannabis Co.
Krueger, who represents a swath of the east side of Manhattan, has said repeatedly that she doesn’t intend to buy or consume cannabis products. But that’s not the point, she said, emphasizing that it’s about reducing the harm that the disproportionate enforcement of cannabis laws has caused in communities of color. The American Civil Liberties Union has released data that show that while Black and white people consume cannabis at similar rates, Black people are nearly four times as likely to be arrested for a cannabis-related crime.
“Even if you don’t like the product and don’t want to use it,” Krueger said, adding that she hates the “smell” of cannabis, it’s not about that, Krueger said on Thursday morning at Housing Works Cannabis Co.
“It’s about whether people who want to can do so without facing a criminal record. And it’s about opportunities for new entrepreneurs who may have been in the business illegally for decades,” Krueger said.
Manhattan Borough President Mark Levine spoke and emphasized that customers who purchase from Housing Works Cannabis Co. are buying “safe” and “regulated” products.
“It’s extremely important that the first dispensary is not a major corporate operator, but is run by a wonderful non-profit, a mission-driven nonprofit Housing Works. So, the revenue generated here is going to support their work for homeless New Yorkers, for formerly incarcerated New Yorkers,” Levine said. “That is equity.”
Housing Works is among the 36 entities to receive a Conditional Adult Use Retail Dispensary (CAURD) license to-date, with more expected to be awarded in January. These CAURD licenses, first awarded in November, are reserved for applicants who are “justice-involved,” meaning they or a family member have a qualifying cannabis-related record and also qualifying business experience, and for qualifying nonprofits.These entities get a head start in New York’s adult use cannabis industry, expected to be a multibillion dollar market.
One question that remains is whether New Yorkers and tourists will learn how to tell the difference between these forthcoming legal, regulated shops, and the rampant existing unregulated shops selling untested products. Pressure has been mounting on lawmakers and regulators to find a way to curb these unregulated sales without relying too heavily on criminal enforcement.
One of regulators’ early efforts is visible on the front door of the Housing Works Cannabis Co. shop: a QR code that regulators now require to be posted at licensed retailers so that consumers can identify and learn more about the regulated shops.
New York City Mayor Eric Adams held a news conference two weeks ago during which he addressed rampant unlicensed sales of cannabis in New York City. He laid out how agencies worked together for a two-week pilot task force that included the state’s Office of Cannabis Management, the city Sheriff’s Office, the NYC Department of Consumer and Worker Protection, and the New York City Police Department, “to address unlicensed businesses creating an ongoing public safety and public health crisis in many communities throughout the city.”
“We’re saying to those who believe that this is going to become the wild, wild west of cannabis sales, we are saying clearly and loudly, no, it is not,” Adams said at the press conference. “This work,” he added, has “really just started.”
In that two week period, officials inspected 53 locations throughout the city, seizing more than 100,000 unregulated cannabis products and 600 pounds of cannabis worth more than $44 million, leading to 500 civil violations and 66 criminal summons, according to New York City Sheriff Anthony Miranda.
Cannabis will also join the long list of other things that can be easily delivered in New York, as regulators released guidance for cannabis deliveries in early December. With this guidance, any of the other three dozen conditional retail licensees can make deliveries while preparing to open their doors.
Dasheeda Dawson, founding director of Cannabis NYC, appointed by Adams, told Cannabis Wire on Thursday that some storefronts, which she calls “triple threats” are selling illegal cigarettes, unlicensed cannabis, and they’re selling to minors.
“I’m not willing, as an advocate, to say that the proliferation of smoke shops,” which are “not a representation of the legacy market” are part of the “mission,” Dawson said.
“They’re not really trying to participate in any of the licensing in the city, in the state. And that’s different from a lot of the legacy advocates who have been here. And they know that they want an opportunity. They want an opportunity for generational wealth and legitimacy, and we’ve got to preserve that opportunity,” Dawson said.
The work is far from over, she said,even though the first legal adult use transaction took place.
“People are forgetting that we’ve got to build this industry. How did this store even get built so quickly? The ancillary businesses,” Dawson said. “We want to make sure that people aren’t just solely focused on a dispensary.”
Next up for Dawson: The launch of a regulatory policy review to help get Cannabis NYC business resources to the people who need them, and to educate elected and government officials about cannabis.
“In all honesty, I’m really trying to close the education gap,” Dawson told Cannabis Wire, adding that “we still have a lot of people in government who do not understand cannabis.”
“We don’t want to constrict the plant simply because so many people in government only see a dispensary and only think weed,” Dawson said.
Demi Vitkute contributed reporting for this story.