New York cannabis regulators are doubling the number of cannabis retail licenses available to “justice-involved” applicants, from 150 to 300.
Chris Alexander, the executive director of the state’s Office of Cannabis Management (OCM), made the announcement during Thursday’s meeting of the Office’s Cannabis Control Board, its second meeting of 2023. The Board also approved revised regulations related to cannabis testing, and to packaging, marketing, and advertising. And, the Board proposed rules for cannabis research licenses.
When regulators opened the window in 2022 for Conditional Adult Use Retail Dispensary (CAURD) applications, more than 900 came in. So far, 66 have been awarded.
“As we have continued to review applications, we found there’s still many qualified individuals who can make the most of this opportunity outside of that initial 150,” Alexander said during the meeting. He added that the expansion is “in recognition of the strong pool of applicants, the ability of some of these individuals to bring their own locations” and of the Office’s “desire to expand the market as quickly as possible.”
While Alexander hinted at well-resourced CAURD applicants, he stressed that there’s a ceiling on the financial lift that the state can do.
“It’s important to understand that the resources of the fund are not limitless, and under the expansion, the first 150 licensees will continue to have access to the fund if they want it. Those who decline will free up resources that will be made available — but not guaranteed — to those in the expanded group of 150 applicants,” Alexander said.
The first 150 CAURD licensees “will have first call” on pulling from the $200 million public-private equity fund that Gov. Kathy Hochul announced last year, of which the Dormitory Authority seeded $50 million, “should they choose a Fund-supported location.” The bottom 150 CAURD licensees “will be able to access any remaining Fund support.”
Reuben McDaniel, a Cannabis Control Board member and CEO of the Dormitory Authority of New York, spoke in support of the move to expand the number of CAURD licenses. McDaniel did not provide any updates on progress toward raising the other $150 million for the fund.
“Time works against all of our CAURD licensees, generally,” McDaniel said. “So, I think giving them a head start is a wonderful thing, so I really appreciate that expansion. From the fund perspective, we’ll do the best we can to distribute resources and allocate those as best we can.”
The meeting, which was hybrid and held both in Albany and virtually, took place during what is a particularly complicated phase in the rollout of the state’s legal cannabis industry. While lawmakers passed the Marihuana Taxation and Regulation Act in March of 2021, just four legal adult use shops are open (three in downtown Manhattan and one in Binghamton) two full years later. That hasn’t stopped eager and opportunistic entrepreneurs from making unlicensed sales out of brick and mortar storefronts vacated during the first waves of the Covid-19 pandemic, or selling cannabis from converted food trucks.
The New York City Sheriff’s Office puts the number of these unlicensed businesses at well over 1,000. Calls for enforcement against these operators have come from City Hall, Albany, and many places in between. Most recently, Manhattan District Attorney Alvin Bragg held a press conference to highlight that his office had sent roughly 400 letters to landlords and building owners that rented to unlicensed operators, threatening action if they continued.
Elected officials are calling for more enforcement tools, which could come in the form of a major piece of legislation that sources tell Cannabis Wire is currently under negotiation in Albany between the legislative chambers and the governor.
In the meantime, to help lift up the CAURD license recipients, Damian Fagon, OCM’s chief equity officer, announced the “CAURD Retail Accelerator Program,” which will include “access to state and national experts,” including one-on-one mentorship on topics like operations, fundraising, and partnerships and investors. The program will kick off at SoHo Works on March 17.
During Alexander’s executive director report, he also briefly covered the public comment window that recently closed for the adult use regulations that will guide the next phase of the adult use launch, as the current phase of the rollout is limited to conditional license holders who meet certain criteria, such as being “justice involved.” In all, regulators received more than 400 unique emails, Alexander said, some of which topped 30 pages. The comments covered a wide range of topics, though themes are emerging: clarification of terms, equity license qualifications, allowing sampling and expanding merchandising, and clarification on sustainability.
During a brief public comment period, Mike Flynn, who owns what he described as a 13,000 sq ft dispensary that’s ready to open in Syracuse, asked for an update on the lawsuit that is currently blocking cannabis shops from opening in five regions, including Buffalo and Brooklyn. Regulators declined to speak on the topic.
