One year to the day that the first “justice-involved” adult use cannabis licensee opened its doors in New York, some of the biggest cannabis operators in the country will be able to do the same, years ahead of schedule.
This year was a turbulent one for New York’s legal cannabis market. Today, just over two dozen legal adult use cannabis shops are open while more than 1,000 unregulated shops remain open, concentrated in New York City. This dynamic was exacerbated by lawsuits that held up adult use licensing.
Tremaine Wright, chair of the Cannabis Control Board, started Friday’s Board meeting by emphasizing the “long-awaited resolution” of litigation challenging the state’s prioritization of “justice-involved” New Yorkers for retail licenses called Conditional Adult Use Retail Dispensary (CAURD) licenses. These are people with a cannabis conviction, or a close family member with one.
“This settlement provides much needed relief to the hundreds of provisional licensees who until now have had to delay the launch of their operations,” Wright said. “Their businesses may have been sidelined, but our CAURD licensees remained wholeheartedly committed to the endeavor.”
One major theme on Friday’s agenda was medical cannabis operators, known as Registered Organizations. The state’s existing ROs are mostly well-capitalized multistate operators. Those who expand into the adult use industry will have a crucial advantage in their ability to vertically integrate, meaning to control their product from seed to sale, while other new entrants cannot hold both a cultivation and a retail license. At the same time, this advantage comes with multimillion dollar fees.
First up on ROs was a resolution to allow two of them to open their fourth medical cannabis locations. Fiorello Pharmaceuticals is planning to open a facility in Long Beach, on Long Island (dba Rise Long Beach). And Citiva Medical wants to open a fourth location in Tompkins County (dba Be). Board member Jessica Garcia recused herself from the votes.
Regulators also approved a resolution related to applications for ROs that want to expand into adult use. Columbia Care (which wants to co-locate in Brooklyn), Curaleaf (Newburgh), Etain (White Plains), NYCANNA (Farmingdale), PharmaCann of New York (Albany), and Valley Agriceuticals (location not listed during the meeting) were listed as existing ROs that have submitted required documents to serve adult use consumers.
The entrance of the ROs into the adult use market has become a particularly deep point of contention in the state amid the delay of the CAURD rollout, as Cannabis Wire previously reported, in no small part because one of the lawsuits that challenged and slowed the CAURD rollout came from some ROs.
Damian Fagon, chief equity officer for the Office of Cannabis Management, gave an overview of the RO transition to the adult use market, and how the “co-location” will unfold. Each applicant needed to submit a community impact plan, medical use patient prioritization plan, and energy plan, for example.
John Kagia, director of policy at OCM, gave some more details about this rollout, including that “most” will be opening co-locations around December 29, and they have needed to prove that patients won’t see a supply interruption.
“Really, one of the things we’re looking to see is some assurance, some guarantee, that even as they may be expanding their operations into adult use market, that there’s not going to be an instant or context where the patients would see more limited access,” Kagia said.
Kagia also gave some numbers related to the Cannabis Growers Showcase program, which will “sunset” as scheduled on January 1. A total of 43 cities and towns across New York hosted these events, which generated just over $5 million in sales. One way that this program appears to have been valuable, in addition to providing a sales bridge for growers when stores couldn’t open, is that it served as a testing ground for broader events.
“We know there’s intense interest in events permits and we are working on developing those regulations as we speak,” Kagia said.
Fagon gave a few high-level updates about the microbusiness licenses, the application window of which closed on November 17. Regulators received more than 350 applications, and of those, more than 70% were for SEE. Roughly 15% applied as “graduates” of OCM’s Cannabis Compliance Training and Mentorship Program.
“We are well on our way to meeting the statutory goal of issuing 50% of adult use licenses to social and economic equity applicants,” Fagon said. “We are truly on the verge of establishing the most equitable, diverse and representative legal cannabis market in the country.”
The public comment period was notably less charged than previous meetings, and only included a handful of speakers.
Paul Suits, Jr. co-founder and CEO of Lakehouse Cannabis, highlighted that he’s been working toward licensure for nearly two years. The area where he wants to open a shop, Cortland, is an outlier when it comes to unlicensed shops; local officials and law enforcement have largely been able to keep unregulated stores from operating, he said.
“We are confident our store will contribute to the local economy by generating tax revenue for Cortland,” Suits said. “We just need a license to provide legal and regulated cannabis access, especially considering the absence of legal dispensaries in the region, from Syracuse to Binghamton, creating what can be described as a cannabis desert.”
