Are you wondering how to open a dispensary in New York? This page is dedicated to keeping you up to date on the latest news and information relevant to opening a cannabis business in New York. This includes helpful insights on what is to come next.
New York, on Wednesday, March 31st became the 15th state to legalize recreational cannabis. This means that one of the largest potential markets for cannabis has opened up.
According to the state governor’s office, the approach involves a comprehensive regulatory approach involving:
- Creating an office of “Cannabis Management” specialized in regulation for medical, adult, and hemp programs
- Social equity licensing opportunities
- Egalitarian adult-use market structure and help facilitate access to capital
- Technical assistance and incubation for equity entrepreneurs
- Intent to correct past harms of communities disproportionately affected by cannabis prohibition
During this year, we believe more details will come to learn how to open a dispensary in New York, the requirements, application process, and associated costs. We will be adding these details to this page as new information is announced. Here’s what you need to know now to be ready.
New York’s Path To Recreational Legalization
Marijuana was poised to be legalized in 2020, but New York was unexpectedly hit with the COVID 19 epidemic, which has prioritized the state’s attention. While this slowed down cannabis legalization it became a powerful driver in the push to legalize. This is also a factor to keep in mind with the likelihood of legalization in other states.
Firstly COVID 19 has been projected as a 243 billion dollar loss to New York’s economy, according to the state budget’s office. Losses of this size put a major strain on the state budget, finding its revenue.
Secondly, criminal justice reform is more popular than ever, and there has never been more pressure to decriminalize cannabis.
In the most recent news affecting legalization and the rollout of the cannabis program, New York Gov. Andrew Cuomo announced on August 10, 2021 his resignation, a week after his harassment scandal. His replacement will be Lieutenant Governor Kathy Hochul, New York’s first female governor.
What does that mean for New York’s coming recreational cannabis?
New York’s legalized marijuana program was reportedly delayed because Cuomo has stalled nominating regulators. No marijuana sales can transpire in the state unless there are regulators in place to set the rules and make the decisions. According to lawmakers, it will take a year or more for cannabis sales to begin in New York under Cuomo’s leadership.
On September 22, Governor Hochul revealed her final two appointees to regulate the state’s adult-use marijuana market, completing the New York marijuana regulatory board. Reuben McDaniel, president and CEO of the Dormitory Authority of New York State, and Jessica Garcia, assistant to the president of the Retail, Wholesale Department Store Union, were both named by Gov. Hochul. Lt. Gov. Hochul has pledged that getting the state’s marijuana sales program off the ground will be a top priority.
We anticipate that the appointment of Lt. Governor Hochul to Governor could have a positive impact on the state’s adult-use cannabis early roll out and speed of New York’s cannabis program’s growth. In an interview, she commented that legalization is “long-overdue” and “we need the money.” So much political capital will be gained by embracing adult-use cannabis as her first success stories. It would not be surprising if the ball starts rolling rapidly.
How big is the opportunity?
Most experts agree New York may be one of the hottest cannabis markets in the United States. According to the New York Comptroller, legalization may help the state make the 3.1 billion dollars. Brightfield Group, a Chicago-based research firm, puts it at 2.2 billion dollars by 2023 if legalization were to occur by 2021, making New York the second-largest cannabis market! The common sense notion is that the size of the state’s population, along with wealth, and open culture, makes it clear that the opportunity for earnings is huge.
Local Cannabis Restrictions & Laws
There are certain counties where there is a possibility that marijuana sales will not be allowed. These include the counties of Columbia, Chemung, Nassau, Putnam, and Suffolk. Furthermore, there is a possibility of Cattaraugus and Oneida counties being included as well. While there aren’t any definitive laws put in place just yet, we will keep this page updated as more information is available.
According to New York’s Marijuana Regulation and Taxation Act, local opt-out applies only to Retail and On-Site Consumption. Other types of licenses cannot opt-out. A town, city or village determined to outright ban or restrict marijuana must adopt a local law requesting prohibition of dispensaries or consumption lounges in their jurisdiction.
Medical Marijuana Program Opportunities
The first move to legalize medical marijuana was In 2014, with the Compassionate Care Act. At this time, only five licenses were granted and no new licenses have been granted since the deadline of June 5th, 2015. At that time there were 43 applicants who applied to manufacture and dispense medical cannabis. The law initially allowed 5 organizations to register with each organization allowed to operate 4 dispensaries state-wide.
Since this time, there have been no new medical marijuana licenses granted or plans to focus on medical-only. The focus has been exclusively on full legalization. Based on 2020 state government proposals, medical cannabis will be managed and regulated by the proposed cannabis management office.
Application Fees & Registration Costs
While this is no indication of the costs associated with the recreational use, here are the costs associated with application from 2015:
Applicants must submit a:
- Non-Refundable Application Fee of $10,000
- A $200,000 registration fee. This will be refunded only if applicant is not issued a registration.
Recreational Use Legalization
As stated, New York has become the 15th state to legalize recreational marijuana. On March 31st, 2021, Governor Andrew M. Cuomo signed into law a bill to legalize recreational cannabis for adults 21 years old and older. The full language of the bill can be viewed here: The Marihuana Regulation and Taxation Act.
Here are the key takeaways from the act:
- The act legalizes recreational cannabis for adults over 21 years old.
- We can expect retail sales of cannabis by 2022.
- As for personal use, it will also allow up to six cannabis plants at home. Up to 12 plants will be possible in a household with more than one adult.
- A system for licensure will be created (we will be updating this page as information comes in) for growers, process manufacturers, distributors, retailers (dispensaries), and co-ops.
- Another very relevant detail is that vertical integration will be prohibited. Vertical integration is the control of the full supply chain such as a business that operates a grow, manufacturer, and retail store. The only exception to this rule appears to be existing medical cannabis businesses and cannabis microbusinesses.
- Cannabis Delivery Services are allowed under this bill
- Social Consumption Sites (cannabis lounges) will also be allowed.
Who is responsible for the regulation of Cannabis in New York?
Regulation will be under the management of the newly created Office of Cannabis Management. This office will be part of the New York State Liquor Authority but operate independently. They will be responsible for adult-use, medical, and hemp policy. The Cannabis Control Board will oversee this office which will include five appointed members. Three would be appointed by the governor and one each to the senate and assembly respectively.
According to the Marihuana Regulation & Taxation Act, there will be eleven adult-use cannabis license types. These includes:
- Adult Use Cultivator – Permits the acquisition, possession, distribution, cultivation, and sale of cannabis to processors;
- Adult-use Nursery – Permits the sale, production, distribution of cannabis clones, immature plants, cannabis seeds, and other agricultural products used for the planting, propagation, and cultivation of marijuana by licensed adult-use cultivators, cooperatives, microbusinesses, or registered organizations;
- Adult-use Processor – Permits acquisition, possession, processing and sale of cannabis from adult-use cultivator to licensed distributors;
- Adult-use Distributor – Permits acquisition, possession, distribution and cannabis sale from cultivator, processor, cooperative, microbusiness, or RO to licensed retail dispensaries, delivery and on-site consumption sites;
- Adult-use Cooperative – Permits the acquisition, possession, cultivation, processing and sale from the adult-use cooperative to licensed distributors, on-site consumption sites, registered organization and/or retail dispensaries;
- Adult-use Microbusiness – Permits limited cultivation, processing, distribution, delivery, and sale of own adult-use cannabis and cannabis products
- Adult-use Retail Dispensary – Permits acquisition, possession, sale and delivery of cannabis from retail dispensary to cannabis consumers
- Adult-use On-site Consumption – Permits the acquisition, possession, cultivation, processing and sale from the adult-use cooperative to licensed distributors, on-site consumption sites, registered organization and/or retail dispensaries;
- Adult-use Delivery – Permits the delivery of cannabis and cannabis products to cannabis consumers
- Registered Organization Adult-use Cultivator Processor Distributor Retail Dispensary – Permits a registered organization to have the same privileges and conditions as adult-use cultivator, processor, distributor and retail dispensary licensees.
- Registered Organization Adult-use Cultivator Processor Distributor – Permits a registered organization to have the same privileges of adult-use cultivator, processor, and distributor licensees
The bill sets out with a goal of having 50% of licenses given out to “social equity applicants”. This means individuals from communities disproportionately impacted by cannabis prohibition, minorities, women-owned businesses, service disabled veterans, distressed NY farmers and service-disabled veterans.
Lt. Governor Hochul expressed support for the importance of social equity provisions in the state’s new legalization law and being on the right side of history.
In the upcoming weeks and through 2021, we anticipate many new events that will affect how quickly this happens and what the requirements will look like to start a marijuana dispensary and when the state will start accepting license applicants. By adding yourself to our New York Cannabis Mailing List (Below), we will keep you updated on all relevant news that matters and not so easy to find news and comments based on New York Legalization below. This includes but is not limited to:
- How much will it cost to open a dispensary in New York?
- What are the requirements to get a marijuana business license and open a dispensary in New York?
- What special programs will be available?
- And more
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