The US state has promised to grant the first retail licenses to previously convicted marijuana sellers. In most cases this has not happened.
Only about 20 marijuana dispensaries previously condemned by New York authorities have opened since legal recreational cannabis sales began in the state in December of last year.
Authorities have promised many of the first retail licenses to sellers with previous drug convictions, hoping to give them a chance to succeed before competitors swoop in.
However, legal challenges to the state’s permitting process have left more than 400 provisional licensees in limbo. Marijuana growers are also stunned because there are too few stores to sell their crop.
Amid these problems, New York regulators are now expanding the market. They recently opened a 60-day general application period to grow, process, distribute or sell marijuana, hoping to issue more than 1,000 new licenses.
The move is expected to increase the number of legal dispensaries in a market now dominated by illegal sellers who have simply opened retail stores without permission.
“They have all the money to bleed us”
New rules will also allow companies licensed to grow and sell medical marijuana in the state to enter the recreational market.
But the prospect of competing with medical providers worries some farmers and retailers who fear being crushed by companies with deeper pockets.
“What worries me is they have all the money to bleed us,” said Coss Marte, who will open a dispensary in Manhattan next week after being rebuffed by a lawsuit against New York regulators. York.
“They are vertically integrated. So they could grow their own product at the cheapest price and outbid all the farmers, all our products and all our prices,” he added.
CONBUD, Marte’s store, was among those temporarily blocked by a judge after a group filed a lawsuit on behalf of disabled veterans, saying they were wrongly excluded from applying for permits. Thus, Marte, who had already been arrested for drug trafficking, found himself paying rent for a store that he could not open.
A judge recently ruled that CONBUD and several other stores can open. But they weren’t all as lucky.
Balancing fairness and competition
Like many other provisional licensees, after months of delays in opening his store, Carson Grant was wondering whether to reapply for a license during this general 60-day round. “It’s very difficult,” he said.
Reginald Fluellen, senior consultant for the Cannabis Social Equity Coalition, accused the state of a botched rollout.
“They have failed miserably to provide justice-involved individuals with the kind of market head start that they promised,” Fluellen said.
To protect against monopolies, medical providers will be limited to three points of sale. And, in a wink to farmers, their stores will initially have to devote half of their sales area to products grown and processed by independent companies.
Yet critics say regulators should have given more time for entrepreneurs from economic and social diversity to succeed before letting larger competitors enter.
Office of Cannabis Management Executive Director Chris Alexander said the new regulations maintain New York’s commitment to social and economic equity, while making the market more competitive.
Alexander acknowledged there was some “frustration” in opening retail stores, but added the state has shown that a market supplied by small farmers can work.
“We have some of the most successful dispensaries in the country here in New York,” he said.
And there is still room to grow. Regulators have estimated that New York will eventually need at least 2,000 dispensaries to meet demand.
2023-10-13 00:12:11
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