Will New York’s Adult-Use Cannabis Licensing Repair Drug-War Harms?

    New York State legalized adult-use cannabis through the legislature in early 2021, and is slowly moving forward with implementation. Currently, advocates and officials don’t expect that dispensaries will actually open for many months, if not longer. When we get there, how equitable will the state’s new adult-use market be?

    That rests largely on the licensing process. In April, New York’s Cannabis Control Board approved the state’s first ever cannabis licenses, called “conditional cultivator” licenses. On May 19, it approved dozens more of these, bringing the total to 146. “Conditional” licenses will expire after about two years, so approved businesses will later have to apply for a final license.

    Wei Hu, an attorney and founding partner of MRTA Law, a specialized cannabis firm, told Filter that the state will soon approve 56 more conditional cultivators, before opening applications for a second category: “conditional cannabis processor”. Both license categories are prioritized for existing CBD and hemp farmers, whose industry was hit hard in 2019 by a national price collapse. 

    But next in the pipeline are the first dispensary licenses—and these will be reserved exclusively for people directly impacted by the drug war.

    New York’s cannabis law includes several provisions focused on repairing harms of past cannabis prohibition. But fulfilling that promise will be difficult, no matter how good the law is on paper. I asked Hu about New York’s progress toward creating an equitable cannabis industry. 


    Alexander Lekhtman: We’re seeing conditional cultivator licenses now, expect conditional processor licenses soon, and then the first retail licenses will follow. Can you tell us more about how will this work?

    Wei Hu: Those are the three licenses that New York state has contemplated—one is up for application, one will soon be up, and one will soon be up for “adoption” of these regulations in the state register.

    There’s been a lot of press coverage around the “conditional adult-use retail dispensary” licenses. They’re going to justice-involved… I like to call them “injustice-involved” individuals.

    That means they or their parents, step-parents, spouse, children, step-children or dependents have had a marijuana conviction. That plus residence in New York state at the time of conviction, plus a business ownership requirement of at least owning 10 percent in a business that’s profitable for two years.

    “Medical marijuana companies are going to sit on the sidelines—they’re the last to come into the adult-use market.”


    Is this required by law?

    New York state’s MRTA [Marijuana Regulation and Taxation Act] puts an aspirational goal of at least 50 percent of licenses going to social justice or economic equity applicants—of all license categories.

    The injustice-involved people are a subset of that. Under the MRTA, they have preferences. Those will be the individuals who will apply and prevail in obtaining [retail] licenses for the first round in New York state.


    New York legalized medical marijuana back in 2014. That industry has not been equitable at all, and some very large companies could have a significant early-mover advantage over new entrants now the state is going fully legal. We’ve seen that in neighboring Connecticut. What will happen with New York’s medical marijuana companies?

    They’re going to sit on the sidelines—they’re the last to come into the adult-use market. The timing and participation of the medical operators will be solely determined by the Cannabis Control Board—and this current board will not allow the medical operators in until everyone else is in.


    What other licenses, if any, will be available this year? We should ultimately have distributor, manufacturer, delivery and micro-business licenses, to name a few.

    None of that is currently available for application. We’re all waiting with bated breath to see them in regulation.


    When can growers have cannabis products actually ready for sale?

    The growing season here is October. You’re seeing mid-October for cultivation, then you have drying, curing, lab testing, then delivery to retail chains. From the supply side, things could be available by November or December. But the challenge is having the brick-and-mortar stores to open doors around the same time.


    New York is moving slowly on this, compared to New Mexico, for example, which got stores open within 12 months after legalizing. Of course, some justice-minded advocates favor going slow over rushing. When should we expect retail sales to open?

    That’s the $20 million question. I’ve talked to upstate cultivators—they’re leasing 50-foot freezer trailers already, in anticipation of delays. Originally we anticipated fall of 2022, but we need a lot of things to go right.


    How will injustice-involved applicants—many of them, presumably, also disadvantaged in other ways—be able to get real estate in this very expensive business?

    Chris Alexander, executive director of the Office of Cannabis Management, said he wants [locations for these applicants] to be “turn-key.” The [New York state] Dormitory Authority will be refurbishing and equipping over 200 sites throughout New York. There’s nine geographic regions where people will be competing for licenses, with 200 licenses apportioned among them.


    The state’s going to foot the bill for the injustice-involved and the operators will lease the property. There’s no upfront lease or real estate cost.


    If the state successfully creates those 200 sites, how could that speed the process along?

    You may be looking at January or February 2023 [to start sales]; those are not impossible dates.


    What, if any, will be the up-front expenses for equity applicants looking to operate these properties?

    The first round is very expensive for real estate, so the Dormitory Authority is doing the build-out. There’s no private property for the injustice-involved. The state’s going to foot the bill and the operators will lease the property. There’s no upfront lease or real estate cost.


    What should a prospective injustice-involved cannabis business owner be on the lookout for the rest of this year?

    It will be delays in the regulation. Everything in life is about timing. Applicants should be aware of the timeline, when they need to apply, when they’ll have more information of what this industry will look like.



    Photograph by Alexander Lekhtman.

    • Alexander is Filter’s staff writer. He writes about the movement to end the War on Drugs. He grew up in New Jersey and swears it’s actually alright. He’s also a musician hoping to change the world through the power of ledger lines and legislation. Alexander was previously Filter‘s editorial fellow.

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