An Update on Cannabis in New York

The State of New York is making progress toward legalizing recreational cannabis sales, with almost 40% of municipalities opting in, including all five boroughs of New York City. Many municipalities have opted out, however, and the state’s regulatory framework has yet to be finalized. Despite this, if regulators stay on track, licensing will begin soon and legal sales will begin next year. In the meantime, unauthorized cannabis sales are taking place throughout the state.

Where Will Adult-Use Cannabis Be Permitted in New York?

Towns in New York had until December 31^st to opt out of permitting cannabis businesses within their jurisdiction, and nearly 49% of municipalities have opted out of allowing adult-use cannabis following this deadline. Additionally, over 55% of municipalities have opted out of permitting consumption lounges.

Despite the high percentage of municipality opt-outs, municipalities in New York are still able to opt back into permitting adult-use cannabis. Since municipalities cannot opt back out once opting in, some speculate that more municipalities will begin opting in once the state releases more details on the regulatory framework of the program. Some municipalities may also want to see how neighboring municipalities that are opting in fare in the early days of adult-use cannabis sales.

In addition to New York’s state cannabis industry, the Saint Regis Mohawk Tribe launched their regulated cannabis market which will operate independently of the statewide program. New cannabis businesses licensed under the tribe’s program have submitted their own applications and have taken steps to ensure they meet approval requirements. So far, three licenses have been distributed.

What Comes Next for Cannabis in New York?

Steps have been made toward getting the state’s cannabis program operational, but New York will likely not authorize legal sales until mid 2023. Members of the Cannabis Control Board have indicated that the initial earliest legal sale date of April 2022 will likely be missed as the licensing program will likely not be finalized until next year. The state has not yet published regulations or established an application yet, but many in the state are already gearing up to secure funding and apply.

Though the official applications for cannabis business licensing have not been released, regulators have stated that they intend to reserve as many as half of all licenses for “social and economic equity” applicants. Additionally, regulators have implied that the state may not allow “dispensary chains” at this time and would prefer to license single store operators. Though new applicants may not be approved to open chain businesses, already licensed medical cannabis dispensaries in New York, which may already have as many as four locations, will now be allowed to increase to eight locations.

While the state holds off on permitting legal sales, unregulated cannabis “sales” are occurring throughout New York. Sellers mark-up the price of items such as smoking accessories, clothing, or other goods and include cannabis as a “free gift” included in the purchase. Illicit cannabis and cannabis products are sold by these unlicensed delivery services, bodegas, and street vendors and consumption occurs at pop-up cannabis lounges. In light of this emerging problem, the Cannabis Control Commission stated that these businesses are violating the law and may face legal and financial penalties.

How Can Sapphire Risk Help?

Tony Gallo and the team of application writers and consultants at Sapphire Risk Advisory Group have worked extensively in the State of New York and are prepared for the adult-use application round. Follow us on social media to stay up to date with New York cannabis industry updates!

Author

Katharine Baxter is the Lead Technical Writer and Industry News Editor for Sapphire Risk Advisory Group and is responsible for creating compliant security plans for cannabis business license applications. Katharine obtained her two Bachelor’s degrees in Journalism and Political Science and has worked in the cannabis industry for over two years. Katharine is a published author on cannabis and security and has covered topics such as cannabis security best practices and industry legal updates.