New York regulators approved another batch of cannabis retail licenses on Monday, opening the door to access in areas like Buffalo and Brooklyn, which were until recently blocked by a lawsuit.
The Cannabis Control Board held its Monday morning meeting at Medgar Evers College in Brooklyn, where it awarded 99 Conditional Adult Use Retail Dispensary (CAURD) licenses, bringing the total to 165. Seven have opened since late December. Of the newly-awarded licenses, 13 are in areas that were for months left out of the initial license allocations because of litigation.
The company behind the suit, Variscite NY One, Inc, challenged certain provisions of the rules that allowed “justice-involved” individuals a head start in the state’s adult use cannabis industry. Last week, the preliminary injunction that blocked licenses from being issued was lifted in four of the five areas, as Cannabis Wire reported. These areas include Western New York, Central New York, Mid-Hudson, and Brooklyn; however, it remains in place in the Finger Lakes region.
Board chair Tremaine Wright spoke at the start of the meeting about the injunction being lifted, which was met with loud applause from the audience.
“We’re absolutely thrilled that we’re able to expand the rollout of legalized cannabis across almost every region of the state, and that New Yorkers in these regions will soon have access to locally grown and tested safe cannabis,” Wright said. “I think this might be one of the happiest meetings. We’re having a little bit of joy in this room. This is nice.”
The meeting was less “nice” during the public comment period, during which nearly two dozen members of the public spoke. Some commenters cheered for the regulatory progress made. Others spoke sharply about the need for more transparency in the licensing process, with several asking for, at the very least, personalized application updates after months of radio silence.
Another theme that emerged during the public comment period was related to the unregulated market in the state, which is concentrated in New York City. Manhattan District Attorney Alvin Bragg’s office has issued roughly 400 letters to lessors and building owners that are serving unlicensed cannabis operators, and the city’s Sheriff’s Office – sometimes with help from the New York City Police Department – has issued civil penalties, but these actions have done little to rein in brazen unlicensed sellers.
On Monday, the Board approved the extension of some emergency rules related to enforcement, but more is coming. On March 22, Gov. Kathy Hochul released her plan to curb unlicensed retailers, and it involves steep fines – particularly aimed at landlords. The plan remains under three-way negotiations with the Senate and Assembly.
Chris Alexander, Office of Cannabis Management executive director, gave a brief report on Monday and also touched on the topic of unlicensed sales.
“We have been working constantly as a small team, but working constantly, across the state to ensure that the continued operation of these illicit shops comes to a close,” Alexander said. “We will continue to make enforcement a priority. We understand that in order for you all to be successful, we must tamper down that activity, and that remains a key priority for this office.”
The next Board meeting, on May 11, is expected to be a big one, with the revised adult use rules expected to be approved. (All adult use licenses awarded to-date are conditional, and reserved for entities that meet specific criteria, such as being “justice-involved,” however, the final adult use rules will guide the next phase of the rollout.) Once approved, they’ll be subject to another 45-day public comment window. John Kagia, director of policy for OCM, said that the proposed rules for the adult use industry received an “incredibly high level of public participation” with more than 3,500 comments.
“The proposed regulations are being revised to address outstanding needs and concerns based on the public comments and based on internal policy developments, with the goal of bringing them before the board on May 11,” Kagia said. “The goal here is to very expeditiously adopt the final adult use regulations so that the office can open the application period for adult use licenses by the end of the year.”
Damian Fagon, chief equity officer for OCM, spoke about the March 17 launch of the New York CAURD Academy at SOHO Works in Brooklyn. The program includes “specialized consultancy” from “state and national cannabis experts” in areas like financing, marketing, staff training, security, and compliance.
Regulators also approved a Rochester-based lab’s application for approval, bringing the total number to 13.
While CCB board member Reuben McDaniel, also the president and CEO of the Dormitory Authority of the State of New York, sat next to Wright during the meeting, he did not give an update on the state’s equity fund’s effort to raise $200 million,, or on DASNY’s ongoing efforts to locate potential sites for turnkey storefronts for CAURD licensees, the costs for which would come out of the aforementioned fund.
Toward the end of the public comment period, Osbert Orduña, CEO of The Cannabis Place, thanked regulators for their work so far, but said that CAURD applicants are “tripping over ourselves.” He spoke about his experience trying to find a location in Queens, where regulators, he said, dinged his application for being within 500 feet of a school, despite a survey report that Orduña said that he submitted to show that it was 508 feet away.
Orduña said that he’d pursue his own location and not wait for a DASNY site – if he could. But he doesn’t have that kind of capital, he said.
“That’s not the premise of the program. The premise of the program is the fund to help right the wrongs, to help break down some of the barriers to entry, capital and real estate being two of the biggest barriers that exist,” Orduña said. “The fund has to produce locations. You have CBRE, one of the largest real estate firms in the country, at the table, supposedly finding these locations. Where are the locations? Let’s get them on the table.”
The Board went into an executive session for more than an hour and a half to discuss litigation, after which the meeting adjourned. One of the cases that regulators discussed was the Coalition for Access to Regulated & Safe Cannabis suit, which, as Cannabis Wire reported, seeks to “compel” state officials to “fulfill their responsibilities to create a safe, equitable, and well-regulated adult-use and medical market.”
The Coalition includes some of the state’s existing medical cannabis Registered Organizations, or ROs – Acreage, Curaleaf, Green Thumb Industries, and PharmaCann – who want to sell to adult use consumers, but can’t yet enter the market.
Just before the executive session, Scheril Murray Powell, who runs the JUSTÜS Foundation, an organization focused on helping legacy operators enter the legal market, thanked regulators during the public comment period for “holding the line when it comes to equity.”
“There are a lot of interests and people with interests that are trying to elevate their need for economic wealth over the need for us to remedy the war, the harm done by the war on drugs, the harm done by the criminalization of cannabis. So we need to stand firm with the OCM as they’re executing the intent of the MRTA,” Powell said.
