New York To Open Adult-Use Marijuana Licenses To Multistate Operators

New York’s adult-use marijuana regulators have decided to expand their licensing program, making it accessible to a broader range of applicants.

This move would enable major multistate operators to enter a market currently dominated by unlicensed dispensaries and a limited number of small entrepreneurs, following regulators’ efforts to prioritize social equity applicants in launching a legal marijuana market.

New York’s Cannabis Control Board voted on Tuesday, September 12, in favor of allowing non-social equity applicants to apply for licenses to cultivate, manufacture, and sell adult-use cannabis. This would allow medical marijuana operators in the state, such as Curaleaf, Acreage Holdings, Columbia Care, and Cresco Labs, to enter the legal market.

This decision means that multistate operators could enter what experts believe could become the largest cannabis market on the East Coast, expected to reach $7.07 billion by 2025.

As part of the approved resolutions by the Office of Cannabis Management on Tuesday, regulators will start accepting applications for retail or microbusiness licenses from October 4 through December 23. Additionally, they will also accept applications from registered organizations, but the specific timeframe for this is yet to be determined and will be announced by the OCM at a later date.

“Today marks the most significant expansion of New York’s legal cannabis market since legalization, and we’ve taken a massive step towards reaching our goal of having New Yorkers being able to access safer, regulated cannabis across the state,” said Chris Alexander, Executive Director of the OCM in a press statement.

Since New York legalized adult-use marijuana in March 2021, regulators have awarded initial retail licenses through the Conditional Adult-Use Retail Dispensary (CAURD) program. These licenses are intended for individuals who have prior marijuana convictions and were directly or indirectly involved in the war on drugs before legalization.

However, the CAURD program was mired in legal battles that delayed the creation of the legal market and faced criticism from large companies holding medical licenses in the state who sought to enter the adult-use market. In fact, a lawsuit was filed by some of the same medical marijuana companies, who, in March, sued the state under the name Coalition for Access to Safe and Regulated Cannabis. The CCB’s vote, therefore, may annul the litigation.

Furthermore, the implementation of the CAURD program was slowed due to the pace of social equity licensees in opening their businesses, which was hindered by limited funding and bureaucratic challenges. This situation has also been worsened by the proliferation of numerous illegal dispensaries that now dominate the market.

In fact, New York now has about 23 operational legal dispensaries out of the 463 licenses granted after nearly nine months since the first sale in December. Meanwhile, thousands of illicit dispensaries thrive across the state.

The new rules allow conditional licensees to apply for a full license before their conditional licenses expire in June 2024. Furthermore, the CCB’s vote would speed up the process for larger companies. Companies currently holding medical licenses in New York can now potentially open a recreational dispensary next to one of their medical dispensaries by the end of this year. This decision has sparked protests from small entrepreneurs who have asked the state to keep big competitors out as they work to open enough stores to compete with illegal dispensaries.

The CCB’s vote comes at a moment in which social equity applicants are still waiting to open their businesses due to bureaucratic delays and ongoing legal issues surrounding the CAURD program.

Conceived as the most progressive adult-use marijuana legislation in the U.S., the Marijuana Regulation and Taxation Act that legalized marijuana in New York aimed to guarantee at least half of the licenses to social equity applicants. However, with the entry of multistate operators in the legal market, it remains to be seen if New York will be able to keep its promise.

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