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Following lawsuits, state expands cannabis licensing
AP Photo/John Minchillo
David Winzelberg //September 13, 2023
The state’s Office of Cannabis Management (OCM) announced the expansion of cannabis business licensing Tuesday, which will allow anyone to apply for cannabis licenses, not just those with prior convictions.
Beginning Oct. 4, applications for cultivator, processor, distributor, microbusiness and retail dispensary licenses will be available through the New York Business Express (NYBE) platform.
The announcement comes after recent lawsuits against OCM that brought the issuance of licenses to a halt and led to an injunction against current conditional licensees from opening dispensaries.
The lawsuits challenged the state’s Conditional Adult Use Retail Dispensary (CAURD) license program, which was designed to give people with prior cannabis convictions the first licenses to open dispensaries as a social justice measure. Those CAURD licensees in good standing can apply for transition to non-conditional licenses through the NYBE portal and have 12 months to submit the proper documentation before becoming fully licensed and operational.
Chris Alexander, OCM’s executive director, said the new regulations announced Tuesday are “the result of robust engagement with stakeholders across the state” and represent the values of equity and competition.
“Today marks the most significant expansion of New York’s legal cannabis market since legalization, and we’ve taken a massive step towards reaching our goal of having New Yorkers being able access safer, regulated cannabis across the state,” Alexander said in an OCM statement. “We are immensely proud to be building the fairest, most competitive cannabis industry in the nation — one that puts those most harmed by prohibition first and offers a true opportunity for all New Yorkers — not just large corporations — to compete and thrive.”
While the OCM has already issued more than 80 conditional dispensary licenses on Long Island, there is just one store open so far and only a handful that were poised to open soon, mostly due to onerous local zoning and real estate-related issues. Then the court issued the injunction last month, preventing any new dispensaries from opening.
“This all was brought on as a result of New York State not being able to roll out cannabis quickly,” said attorney Ryan McCall, deputy cannabis practice chair at Albany-based Tully Rinckey. “They wanted to have 20 dispensaries open by the end of 2022 and now we’re getting towards the end of 2023 and we have about 23. They’re running behind.”
McCall said the lawsuits filed against the OCM that challenged its program to prioritize licenses for social and economic equity applicants triggered the OCM’s move to open up the application process. He added that the court will likely seek a “reasonable settlement” that will lift the current injunction and allow CAURD licensees to open dispensaries on or after the Oct. 4 date when the application process is open to all.
“If you’re somebody who wanted to get into the cannabis industry, this is probably some of the best news you could hope for,” McCall said of the move to open up the applications to everyone.
However, some CAURD licensees who have yet to open dispensaries, remain concerned about looming competition from well-financed operators and corporations, especially since the OCM’s initial goal was to give the social and economic equity participants a head start in the marketplace.
Gahrey Ovalle, who co-founded the Long Island Cannabis Coalition, said the conditional licensees are worried about not having that head start that they were originally promised, but they also recognize that registered organizations (ROs) and general licensing was coming whether they like it or not.
“They’re part of our ecosystem and they are part of us moving forward. We have to find a way to live in the same space and operate together,” Ovalle told LIBN. “We hope that the OCM is coming up with a clever way to not just open the doors to them, but maybe opening the doors and ensuring that they are part of our larger success as CAURD licensees. We’re hoping that there will be stipulations put on them entering the space that forces them to participate in our growth.”
While the OCM will be opening general licensing, the agency says that priority consideration for cannabis licenses will be provided to applicants from disproportionately impacted communities, distressed farmers, and service-disabled veterans. All social and economic equity applicants will receive a 50 percent fee reduction in application or licensing fees and will be eligible for application support and technical training through the Cannabis Hub & Incubator Program (CHIP), which will be launching this fall.
“We’re waiting to see how that plays out,” Ovalle said. “Most of us are just looking for the opportunity. The opportunity to open, the opportunity to work with these larger ROs and find a better way for that to happen for all of us.”
So far, the state’s 23 conditionally licensed dispensaries have reported cumulative sales of over $70 million through late August of this year, according to the OCM.
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