Your Take: 3 Things to Know About New York’s Retail Cannabis Rollout from an Applicant

Scott Mazza hoped to open the first adult-use dispensary in Buffalo, but today that dream remains in limbo.

Scott Mazza is the co-founder and chief operating officer of Vitality CBD in Buffalo, New York.

New York’s recreational cannabis rollout is going from bad to worse. Last November, an out-of-state lawsuit stopped conditional adult-use retail licenses in five regions. Then, in January, a federal court upheld the injunction. All the while remaining retail applicants have been left in the dark amidst a thriving gray market.

Scott Mazza, Vitality CBD

For two years, I’ve followed the various announcements with the hope of opening the first dispensary in Buffalo. Tens of thousands of dollars in legal fees later, the process remains in limbo.

Here are three things to know about the incoming regulation from someone stuck in the middle.

The process is in stasis.

The most important thing to know right now is that retail cannabis licensing is on pause for major parts of New York. While a few stores managed to open their doors this year, five territories in the state are barred from issuing any conditional retail licenses.

Last summer, we finally started receiving the first pieces of information from the New York State Office of Cannabis Management (OCM). The OCM revealed the first retail dispensaries to open for legal cannabis sales would be under conditional adult-use retail dispensary (CAURD) licenses. These special licenses seek to give those convicted of a New York marijuana-related offense the first opportunity to join the incoming legal cannabis market.

As covered by Green Market Report, regulators specifically wanted to address the social equity aspect of licensing by choosing to award the first licenses to what it calls “justice applicants.” Then, regular recreational retail licenses would follow.

But a lawsuit from a Michigan-based applicant threw a spanner in the entire process. The outfit argues it’s unconstitutionally disadvantaged in obtaining a CAURD license because the regulations favor residents from New York. As a result, applications are on pause in five territories: Finger Lakes, Central New York, Western New York, Mid-Hudson, and Brooklyn. To make matters worse, details regarding regular retail licenses are so far scant.

As someone who owns a CBD business in Buffalo, I’ve heard rumors of recreational cannabis for a number of years. For this reason, I started to get my ducks in a row with my business partner and lawyer in 2021. Importantly, my business partner has a federal and state conviction for marijuana, and we ticked the boxes for a conditional license.

Unfortunately, our preferred region is included in the lawsuit, preventing any movement for the moment.

The conditional licenses are strict.

Another important caveat in this story regards conditional licenses. Namely, what they do and don’t allow. For example, the CAURD license stipulates that retailers can’t choose a specific street address or neighborhood for the dispensary. Additionally, if a location is provided and accepted, the applicant is not allowed to move locations during the four-year conditional period. In a nutshell, the conditional license is quite restrictive.

My team was initially upset by the license delay. After all, we met the criteria and planned on being the first legal dispensary in our city. The industry leaders in cannabis are usually those who arrive first and lead the pack. We felt the conditional license could help us get an important leg up on the competition.

On further reflection, however, the legal pause might benefit us in the long run. At the moment, conditional licenses in our territory aren’t going ahead, and stores aren’t yet opening. There’s still a level playing field. Moreover, we may now have the opportunity to apply for a regular retail license with less strict rules. The problem is that further information on retail licensing is not yet available.

The state must step up.

One final detail is that updates for applicants remain few and far between. Meanwhile, the state remains slow to react on key issues. For example, the regular retail license rollout was meant to happen around the start of this year. As yet, there’s no online portal with information to prepare applications. It’s in the best interest of our industry and all stakeholders this happens as soon as possible.

Moreover, New York continues to battle with the gray market. There remain scores of illicit cannabis stores which pose a competitive threat to the incoming regulated industry. “Sticker” stores, for example, that gift cannabis to customers who buy stickers or other small goods are rife.

If legal cannabis is going to work – especially with taxes and comparatively higher prices – customers need a reason to move away from the black and gray markets. This requires consistent enforcement across the entire state and not just in New York City.

Please don’t get me wrong. I’m still very excited about the arrival of legal cannabis in New York. We’ve waited decades for legalization and it’s finally here. Likewise, the idea to preference people with prior cannabis-related criminal offenses is, on the face of it, positive. The execution, though, is what needs improving. Let’s all hope these teething problems are fixed and quickly.

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