Regulators focused on the good news on Thursday: the opening of Statis Cannabis Co., the first licensed Conditional Adult Use Retail Dispensary (CAURD) location in the Bronx, a borough that has seen a disproportionate number of cannabis arrests. Over the last 40 years, residents of the Bronx accounted for one in every five cannabis arrests across the state, despite the Bronx representing just 7% of the state’s population.
The first ceremonial sale at Statis, made by Emely Chavez, cofounder of the business, however, happened against a turbulent landscape: unlicensed cannabis shops in the city still steeply outnumber licensed ones, though a crackdown is underway; licensees are struggling to get their operations up and running, though a fund intended to help them just completed its raise; and, growers are increasingly concerned that they don’t have enough locations in which to sell their product.
Cannabis Wire asked Chris Alexander, Office of Cannabis Management executive director, where things stood with regard to a proposal that regulators recently floated that would help growers by allowing them to sell directly to consumers.
“What I can say for the farmers, specifically, is that this is the most important thing to their success: us continuing the work of opening as many shops as possible, because this is the only consistent and constant flow through for their product. And so, that’s why we’ve remained steadfast in doing this. I don’t have an update on the farmers market proposal,” Alexander said in response to a question from Cannabis Wire.
“I don’t have an update on that because there’s a lot of different pieces of that to work out legally in order to meet that to make that work,” Alexander added. “And that’s kind of been the frustration. We’re trying to problem solve. So you get a proposal before it was fully baked. But, at the same time, we know that if we continue this work, we’ll be able to make sure that those businesses, those family farms, are successful.”
Meanwhile, another potential one-time solution for licensed growers could be a bill sitting on Gov. Kathy Hochul’s desk. This bill, if she signs it, would allow these growers and processors to “sell tested, packaged, and sealed cannabis products or biomass to a cannabis dispensing facility licensed or permitted by a tribal nation for retail sale.”
It’s unclear whether Hochul will sign the legislation. The governor’s office told Cannabis Wire that Hochul is “reviewing” the bill. On Thursday, when Cannabis Wire asked for an update, a Hochul spokesperson said there were “none as yet.”
“I can’t speak to what the governor will do as it relates to that bill,” Alexander said.
Reuben McDaniel, CEO of the Dormitory Authority of the State of New York, also spoke at the opening of Statis on Thursday. McDaniel was also a member of the Cannabis Control Board until the last meeting in June, when he abruptly resigned.
McDaniel highlighted last week’s announcement that Chicago Atlantic Admin, LLC is “investing up to” $150 million in the New York State Cannabis Social Equity Investment Fund. This fund, which Hochul announced in January 2022 as part of an effort to directly “promote equity and economic justice,” includes $50 million in seed funding from the state.
The funding is to “build our facilities as fast and furious as we can,” McDaniel said, referencing the plan to use the funds to provide some CAURD licensees, of which just over 250 have been issued, with turnkey shops
McDaniel said that a location in Hunts Point in the Bronx was “being built as we speak,” along with another 15 facilities in the design and construction phase that are expected to open over the summer across the state. Another 30 leases are “being negotiated as we speak,” McDaniel said.
Statis is a “bring your own location,” Alexander said, referencing locations that aren’t drawing from DASNY’s locations. (CAURD licensees can find their own locations or go with one secured by the state.)
Regulators have fielded criticism about the pace of licensed shops opening their doors. Alexander alluded to the “roadblocks to getting properties locked in the city,” including things like finding a space with enough foot traffic for the business to thrive while, for example, still meeting setback requirements away from areas like schools, places of worship, and other cannabis shops.
“Because cannabis is still federally regulated, there are also restrictions for particular landlords who have particular mortgages to have a cannabis business on site. Those are some of the challenges,” Alexander said.
Damian Fagon, OCM’s chief equity officer, told Cannabis Wire that specifics on the Communities Disproportionately Impacted (CDI) will be released in August. Applicants from these communities will be prioritized in the next phase of licensing, once the adult use regulations, which are currently in a public comment period, are finalized. All licenses issued to-date are conditional.
Additionally, Cannabis Wire asked about the local jurisdictions – more than half in the state – that continue to opt out of cannabis sales and the forthcoming on-site consumption spaces.
“We’re in constant communication with officials out there. We have gotten indications that there are some communities looking to opt back in,” Fagon said, adding that the first legal shop on Long Island is set to open on July 8, and local elected officials have been invited. For context, Long Island includes many localities that have opted out of cannabis sales.
Long Island residents and cannabis business hopefuls are “coming against really entrenched stigma against the plant,” Fagon said. “We really want to communicate that to the people of Long Island. Like, these are your people. Protect them, support them, and join this industry with us. We don’t want to leave Long Island behind.”