News, Politics

New York to Open Adult-Use Cannabis Retail to Multistate Operators

September 15, 2023 08:00 am ET Estimated Read Time: 3 Minutes
New York to Open Adult-Use Cannabis Retail to Multistate Operators

A recent New York vote could make space for the largest adult-use cannabis market on the East Coast. New York regulators voted Tuesday to allow the state’s medical cannabis operators to apply for adult-use retail licenses. 

Essentially, this vote means that the multistate operators who acquired the majority of the state’s “registered organization” permits may now enter what could be the largest cannabis industry market on the East Coast. 

What Does This Vote Mean for the New York Cannabis Market?

Regulators will begin to accept applications from qualified organizations seeking a retail or microbusiness license starting Oct. 4. These applications will close Dec. 23. 

The vote, confirming a proposal from May by the New York Office of Cannabis Management (OCM), carries significant implications. 

Litigation aimed at expanding licensing opportunities for all applicants may become irrelevant. This lawsuit was initiated by some of the same MSOs who previously sued the state in March, operating under the banner of the Coalition for Access to Safe and Regulated Cannabis.

Secondly, the state’s social equity applicants and existing license holders are feeling abandoned and let down. Many among them are still awaiting the opportunity to open their establishments due to bureaucratic delays and ongoing legal challenges, which have hindered the state’s ambitious Conditional Adult-Use Retail Dispensary (CAURD) program.

This vote occurred one week after the CEOs of four multistate operators passionately appealed to New York Governor Kathy Hochul for expedited entry into the state’s adult-use market.

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Nevertheless, Barry Carmody, a spokesperson for the New York Medical Cannabis Industry Association (NYMCIA), explored the historic nature of this vote at a Cannabis Control Board meeting in Albany: “Today marks a pivotal step toward expanding and sustaining the state’s medical program and creation of an economically viable and equitable adult-use cannabis industry in New York.”

Ongoing Litigation Shadows New York’s Adult-Use Licensing Process

While this vote will impact multistate cannabis operations, several lawsuits are still at play that will affect the final legislation. 

OCM is facing two separate pending lawsuits, one from the state’s Management Services Organizations and another by a group of veterans previously shut out by the CAURD program. 

These “service-disabled” veterans filed a suit against cannabis regulators earlier this year that challenged the constitutional legality of the CAURD program. This lawsuit argued that CAURD’s system of issuing licenses to certain social equity applicants violated state law while excluding veterans from these application benefits. 

Will This Vote Affect New York Cannabis Small Business? 

Cannabis farmers and small business owners in New York spoke back to the OCM about how this legislation will impact their operations. Essentially, many small cannabis business owners feel as though the vote favors “big cannabis,” squashing the efforts of state-based organizations. 

The Cannabis Association of New York (CANY) represents these smaller and state-based cannabis businesses. As such, CANY is pushing for three changes to the existing legislation:

  1. Move to eradicate the state’s illicit market 
  2. Implement identical canopy limits on small businesses and registered organizations
  3. Reform the state’s potency tax that charges higher tax rates for cannabis concentrates.

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