New York state's leading medical-cannabis companies are expressing their frustration as they continue to be excluded from the adult-use market after more than two years. The CEOs of Curaleaf, Green Thumb Industries, Acreage, and PharmaCann have criticized the Office of Cannabis Management under Governor Kathy Hochul, arguing that its actions are jeopardizing the success of New York's cannabis program.
According to the Office of Cannabis Management, approximately 2,000 retail dispensaries are needed to adequately serve the New York market. However, the companies warn that by early 2024, there will be fewer than 100 dispensaries operating, leaving a significant gap in supply.
The legalization of adult-use cannabis in New York in 2021 has resulted in an influx of illegal stores inundating the market with unregulated cannabis products. These illegal retailers have highlighted concerns regarding the safety and quality of their products, with some instances of sales to minors. Moreover, the presence of these illicit establishments has also impacted the business of licensed medical dispensaries.
Despite the legalization of cannabis in the state over two years ago, existing medical-pot companies have not been granted any permits. The delay arises from the state's focus on issuing licenses to social-equity applicants through the Conditional Adult-Use Retail Dispensary Program (CAURD).
The CEOs argue that the Office of Cannabis Management has disregarded the successful strategies employed by other states with adult-use programs, such as Maryland. They assert that existing medical operators should be permitted to transition into the adult-use market.
As of now, there has been no official comment from Governor Hochul's spokesperson regarding the CEOs' concerns and demands.
Read Also: New York Issues First Retail Cannabis Licenses to Business Owners with a Past Conviction
Medical Operators Call for Immediate Issuance of Licenses
Currently, the state law permits 11 medical operators to establish three adult-use retail dispensaries each. The companies argue that this falls far short of constituting a monopoly. These concerns will likely be discussed during the upcoming meeting of the state's Cannabis Control Board on September 12th.
While the Office of Cannabis Management recently approved 212 licenses, bringing the total number in the state to 463, only a few licensed shops are currently operating. This is primarily due to the significant startup costs and challenges in securing suitable real estate for retail businesses.
In addition, the state's cannabis program has encountered legal obstacles, including a lawsuit filed by four military veterans in the state supreme court. The veterans allege that the state is violating the law by prioritizing licenses for individuals with prior marijuana convictions rather than disabled veterans. Although a temporary restraining order on 30 licensees was lifted by State Supreme Court Justice Kevin Bryant, an injunction remains in place for issuing new licenses until the lawsuit is resolved. The next hearing on the matter is scheduled for mid-September.
Also read: HHS Recommendation to Reschedule Cannabis Keeps Pot Stocks Hot, but Questions Remain
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