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New York Cannabis Retailers Left In Limbo – What Should Happen Next?

THE rollout of New York’s recreational cannabis market has been anything but smooth. Earlier this year, a federal court upheld an injunction blocking the state’s cannabis dispensary rollout in five regions.

Even though the state recently announced it plans to double the number of conditional licenses issued, those affected regions will have to sit on the sidelines as the rest of the state begins to ramp up recreational sales. To make matters worse, New York’s grey market continues to thrive.

To say the process is frustrating is an understatement. This month marks two years since the state legalized recreational marijuana. Likewise, for my business partner and me, March marks two years of pursuing the retail license. Unfortunately, we reside in one of the affected areas and don’t know what’s next.

Would-Be Retailers In Limbo

As the co-founder of a CBD business in Buffalo, my finger is on the pulse of what’s happening in cannabis in New York. It was hugely exciting to see the state move ahead with legalizing recreational cannabis in March 2021. Since then, I’ve worked closely with my business partner – who has a state and federal conviction for marijuana – and lawyer to prepare our application.

Last summer, would-be store owners finally received information about the retail application process from the Office of Cannabis Management (OCM). Under the Conditional Adult-Use Retail Dispensary (CAURD) licensing system, individuals with prior marijuana-related convictions in the state – people like my business partner – would be given priority to operate the first retail dispensaries for legal cannabis sales. This initiative aims to provide opportunities for those who have been impacted by previous drug policies to participate in the newly regulated market. After the CAURD licenses, regular recreational retail licenses would follow. But the situation has since become more complex.

Four months ago, a federal judge barred the OCM from issuing any CAURD licenses in the Finger Lakes, Central New York, Western New York, Mid-Hudson and Brooklyn regions. Why? Because an applicant challenged the requirement that licenses be issued only to “justice-involved” individuals with past marijuana convictions with a significant presence in New York. As a result, applications in those regions – including our native Buffalo – are now on hold.

It’s Now A Waiting Game

The situation is uncertain and we’re not sure what comes next. Some of my colleagues have received conditional cultivating and processing licenses, but there’s no news from the OCM about conditional retail licenses in the five affected regions. Nor have we received updates about the regular round of retail licensing that was supposed to open up early this year. It’s been two years and tens of thousands of dollars in legal fees and we’re still waiting.

At first, my team was disappointed by the delay. We had done everything we were supposed to do but still fell short. However, with time, we see the delay as a potential positive. With no conditional licenses currently being issued in our region due to ongoing court drama, there’s an even playing field among all possible stores.

Further, the strict regulations that come with the conditional retail license may not be ideal for us. For example, we wouldn’t be able to choose a specific street address or neighborhood for our dispensary, and we wouldn’t be allowed to move locations during the four-year conditional period if a location is provided and accepted. So, moving ahead with the regular license at the same time as everyone else in our territory may actually be better for us in the long run.

What Should Happen Next

Looking ahead, there are some things the state can do to improve this situation for applicants. First, there needs to be clarity surrounding the regular round of licensing. The conditional round is in a holding pattern and it doesn’t make sense to keep waiting to release information. So far, there’s no official detail about the regular license. All stakeholders deserve this insight to get their applications ready as soon as possible.

Likewise, the state needs to strengthen its approach to illicit cannabis. There are scores of “sticker” stores across the state currently operating without much legal enforcement. These places offer gift cannabis to customers who buy stickers or other small goods. If legalized and regulated cannabis is going to work – especially with tax structures and comparatively higher prices – there must be consistent enforcement to give customers a reason to move away from the black and gray markets.

Let’s be honest: the journey towards legalization was always going to take a lot of work. And while it’s commendable that the state wants justice-involved individuals to play a significant role in the legal cannabis market, the conditional license system has created even more legal hurdles for the OCM and retailers alike.

But, despite the challenges, we should remain optimistic about the future of legal cannabis in our state. After all, our industry has been fighting for decades to get to this point and we have finally achieved recreational legalization. As retailers, we must continue to work closely with authorities and do our best to navigate any initial hurdles with the hope that they will be resolved quickly. Time will tell.

This article is by Scott Mazza, Co-Founder and COO of Buffalo’s Vitality CBD.

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