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Frustration Mounts Among New York’s License Applicants as Authorities Continue Fight Against Illicit Market

In a recent online informational webinar hosted by the New York Office of Cannabis Management (OCM), stakeholders expressed discontent and contemplated legal action after learning about the state’s plans for issuing marijuana business licences.

According to Green Market Report, the webinar revealed that permits for 250 retailers and 110 microbusinesses are set to begin being issued after the Cannabis Control Board’s meeting on January 24.

However, the lack of clarity on the number of licenses for other categories has left applicants uncertain.

During the application window from October 4 to December 18, the state received 6,875 applications from cannabis entrepreneurs, covering various license types. Fagon stated that over 1,000 licenses would be issued in the coming months from this pool.

A contentious issue emerged when Fagon announced that the applications would be reviewed in numerical order until reaching the target of 250 retailers and 110 microbusinesses. Applicants not selected within this initial tranche would have to reapply in the future, incurring additional fees and uncertainty.

Stakeholders, including military veteran Phillip Barody, who invested around $40,000 in the application process, expressed disappointment, feeling misled by previous indications that the state would issue up to 1,000 retail permits. Barody and others are now considering legal action to recoup their expenses.

The OCM faces potential legal challenges, with Mr Barody predicting a wave of lawsuits in the coming weeks. The confusion stems from the OCM’s decision to include non-social equity applicants in a randomized queue alongside those with demonstrable harms from the war on drugs.

The ongoing delays to the roll out of New York’s legal cannabis market are also continuing to drive growth in the number of unlicensed sellers.

Yesterday, Governor Kathy Hochul announced plans to intensify the state’s crackdown on illegal cannabis businesses with a proposed legislation that includes significantly higher fines for shop owners refusing entry to state regulators. In response to the surge in unlicensed marijuana outlets, Hochul aims to make fines a substantial deterrent rather than just a cost of doing business.

The fines for non-compliance would quintuple, escalating from the current $4,000 to $20,000 for a first refusal and $8,000 to $40,000 for subsequent instances under the proposed law.

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