New York marijuana retailers already behind on bills
Source: Pixabay

New York's rules were supposed to help avoid the widespread distress seen in California.

Although the New York cannabis market has gotten considerably better – the number of operational retailers has grown to 52 as of Jan. 19 – a new problem has arisen for operators upstream in the supply chain: how to collect on unpaid bills from retail shops.

The issue of nonpayment by licensed New York marijuana stores has been around since the market launched just over a year ago, said Brittany Carbone, both a marijuana farmer and the incoming vice president of the Cannabis Association of New York.

But it’s become more obvious and pressing as the market has developed, Carbone said, and thus far, the state Office of Cannabis Management hasn’t policed the market the way it should.

“One of the biggest issues that we’re facing is a lack of enforcement of the regulated market … most notably when retailers aren’t paying their invoices on time,” Carbone said.

Carbone said that while farmers wanted to be flexible through 2023 – particularly after a court order forced the state to freeze retail licensing from August until November, leaving just 23 shops open – the problem is going to have to be addressed soon.

“For a while, nobody wanted to even report that to the OCM, and with so few retailers, nobody wanted to be the one who stopped distribution to any retailer. Everyone was trying to be understanding,” she said. “Now, it’s gotten to the point where people don’t have a choice but to start reporting delinquent payments, and unfortunately that seems to be falling on deaf ears once it gets to the OCM.”

New York’s cannabis rules were written so as to specifically avoid some of the major problems that California – perhaps the most dysfunctional marijuana market in the U.S. – has experienced, including the widespread industry distress due to retailers not paying vendors, which created a debt bubble.

“The regulations are designed very clearly to avoid that,” Carbone said. “If a retailer doesn’t pay on time, they get reported, put on a delinquent list, and nobody can distribute to that retailer until their bills are paid.”

But, she added, “I don’t know when they’re actually going to start enforcing things like that. … There’s no accountability right now.”

A spokesperson for the OCM didn’t immediately respond to a request for comment.

The issue of getting retailers to pay their bills aside, Carbone said, the New York cannabis industry landscape is much improved for small farmers like her. Her company, Tricolla Farms, now has products on shelves in nine of the 52 recreational dispensaries, and she’s hoping to get to 20 soon.

“Things have definitely been looking up, with all the new retailers opening,” she said. “It’s entering a new era, a new phase of the game.”

John Schroyer

John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.

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