Your Take: Confusion and Frustration Surrounding New York’s Retail Rollout will be Short-Lived

Those leading the CCB and the Office of Cannabis Management are capable, determined, and well-intentioned.

This story was written in partnership with Crain’s New York, the trusted voice of the New York business community. 

by David N. Feldman, Skip Intro Advisors

David N. Feldman, Skip Intro Advisors

The main thrust of New York’s Marijuana Regulation and Taxation Act, or MRTA, is to promote social equity in the rollout of legal weed in New York. Women, minorities, disadvantaged farmers, disabled veterans and “justice-involved individuals” (those with prior low-level cannabis convictions) were to be favored. Big cannabis and big business—which included the 10 medical marijuana providers already established in the state—were mostly deprioritized.

The new Cannabis Control Board started off with a bold and innovative program to provide a jump-start on adult-use production by allowing existing licensed hemp growers and processors to receive temporary limited licenses to produce recreational product in advance of permanent licensing. Although some of the regulations were confusing, the program generally was applauded.

There also seems to be broad agreement among those in the industry about the importance of promoting and supporting social equity players. But there’s a line being drawn at whether to do so at all costs. Many, for example, saw the CCB’s decision to issue the first 150 or so dispensary licenses to not-for-profits with a social equity mission or individuals with prior New York marijuana convictions as a positive. Some wondered why other social equity players, such as disabled veterans, are somehow less deserving of this priority.

The CCB also planned to provide real estate (through the state Dormitory Authority of the State of New York) and funding (through the new $200 million so-called Webber-Willis Fund) to these players. The locations, however, apparently have not yet been acquired by the state. The fund, so far, does not seem to be operating or fundraising, and its principals have been accused by media outlets of conflicts of interest.

The state also is fighting a lawsuit from an individual whose conviction was in Michigan, claiming it is unconstitutional for New York to exclude those with convictions from other states.

And those aren’t the only complaints. Some have expressed frustration about delays, pointing out that it took almost two years to open the first dispensary in Manhattan, and delivery services have yet to be commenced. Some have complained about high prices in the first store, run by Housing Works, which must compete with the so-called “legacy” or illicit market—players New York City Mayor Eric Adams recently began cracking down on.

All that said, the individuals leading CCB and the Office of Cannabis Management it oversees are capable, determined and well-intentioned. Most stakeholders believe that real estate, funding and confusing regulations will be sorted out in the months ahead. The balance between promoting social equity and assuring an industry run by smart and hard-working operators is expected to be found.

In a few years, the sausage indeed will be made, and what likely will be the largest cannabis retail market of any U.S. state will emerge and thrive.

The bigger question for another day: What happens when federal legalization eliminates interstate barriers?

David N. Feldman is the co-founder, president and CEO of Skip Intro Advisors.

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