The state of New York legalized recreational marijuana March 31, 2021. Although a historic day for the region, it remains illegal to sell cannabis products beyond American Indian reservations. The good news is Gov. Kathy Hochul, as well as cannabis regulators, continue saying cannabis sales under a first initial phase will begin by the end of 2022. Tremaine Wright, chair of the Cannabis Control Board, said Nov. 3 they “are on target” to open the first cannabis storefronts in 2022. “There will be stores open before the end of the year,” she said. “We will keep opening until 150 are open across the state.” As December rapidly approaches, here is a review of finished steps and what is planned.
In the first quarter of 2022, Gov. Hochul announced a $200 million public-private fund to “promote equity and economic justice in New York’s cannabis industry.” Then, a bill was passed to provide hemp farmers an advantage, via conditional licenses, in growing the first legal recreational cannabis crop for manufacturing. Next, regulators approved a plan to accept applications for a conditional New York cannabis business license for those with both business experience and a record of a cannabis conviction (or have a parent or guardian with one), before other entities are allowed to do so.
The second quarter began with conditional cultivation licenses being awarded. Those numbers quickly reached nearly 150 by May. In the same month, the Dormitory Authority of the State of New York opened two cannabis-related Requests for Proposals (RFPs). One sought a manager for the $200 million fund Hochul announced in January, now known as the “New York Social Equity Cannabis Investment Fund,” which would provide 150 turnkey shops for the retail licensees under the “Seeding Opportunity Initiative.” The other sought “design-build services” for those shops. In June, regulators began accepting applications from hemp farmers seeking a conditional license to process cannabis into products.
The third quarter saw an announcement from regulators noting the application window for the Conditional Adult-Use Retail Dispensary licenses, under the Seeding Opportunity Initiative, would open in the month of August. In September, authorities put out an RFP looking for a bank to work with the equity fund. Now in the final quarter, regulators have licensed more than 200 conditional cultivators and processors, and New York regulators recently released regulations for Conditional Adult-Use Retail Dispensary licenses. The information includes packaging restrictions, recordkeeping requirements, operations allowances and more.
A great start, indeed, but the process is far from complete. Recreational licenses will be issued in two major phases: an interim phase aimed to provide a head start to small farmers and “justice involved” individuals. This group is defined by the state as people from communities disproportionately impacted by the war on drugs, as well as people of color, women, financially-distressed farmers and veterans. The following phase will allow most every interested party to apply for a business license. The Office of Cannabis Management still needs to review the 903 submitted applications to make their selections for the 150 spots for the “justice-involved” applicants, and 25 spots for non-profits ”with a history of serving justice-involved individuals and creating vocational opportunities for them.”
Overall New York cannabis license types include “Adult-Use Conditional Cultivator,” which are eligible hemp growers licensed to grow cannabis containing more than 0.3% THC for the upcoming adult-use market, “Adult-Use Conditional Processor,” which are licensees permitted to process cannabis products containing more than 0.3% THC for the adult use market, and “Conditional Adult-Use Retail Dispensary,” which are the first retail dispensaries to open for legal adult-use cannabis sales in the state.
Per a 2021 report for the New York Medical Cannabis Industry Association, the adult use market is projected to reach $1.2 billion by 2023 and $4.2 billion by 2027. Those interested in learning how to start a cannabis business in New York can get a leg up on the competition, even at this point in the process, by following these steps:
No one should tackle a New York cannabis application or new cannabis business alone. Canna Real Estate Group specializes in premier commercial cannabis real estate, and provides financial, architecture and construction consulting for business owners and operators. With more than 30 years of success, CREG is the optimal guide to navigate a New York cannabis license. Start with a consultation today!