New York officials launched legal recreational marijuana sales by promising many of the first retail licenses to people with prior drug convictions, hoping to give people harmed by the war on drugs a chance to succeed before they Competitors will crowd.
But more than nine months later Since sales began, only about two dozen state-licensed dispensaries have opened their doors. Legal challenges over the state’s permitting process have left more than 400 provisional license holders in limbo. Marijuana growers are reeling because there are too few stores to sell their crop.
State regulators are now expanding the market amid those problems. They recently opened a 60-day general application period to grow, process, distribute or sell marijuana, and expect to issue more than 1,000 new licenses. The new rules will also allow companies licensed to grow and sell medical marijuana in New York to enter the recreational market.
These measures are expected to increase the number of legal dispensaries in a market now dominated by black market sellers who simply opened unlicensed retail stores. But the prospect of competing with medical providers worries some farmers and retailers who fear being pressured by companies with deeper pockets before they have a chance to establish themselves.
“My concern is that they have all the money to bleed us dry,” said Coss Marte, whose opening of the CONBUD dispensary in Manhattan was delayed by a lawsuit against state regulators. “They are vertically integrated. So now what they could do is… grow their own product at the cheapest price and basically outbid all the farmers, all our products and all our prices.”
Critics blame New York’s slow retail growth in part on bureaucratic issues, such as delays in creating an “equity capital” fund. $200 million to help applicants open stores. The rollout was also hampered by lawsuits on behalf of people and companies excluded from the first wave of retail licenses.
Marte’s store was among those temporarily prevented from opening by a judge after a group filed a lawsuit on behalf of disabled veterans, saying they were wrongly excluded from applying for a license. Marte, who has a drug arrest in his past, was paying rent for a store he couldn’t open.
A judge recently ruled that the Marte store and several others could open. But the fate of many other provisional license holders, like Carson Grant of New York City, was unclear. After months of delays in opening his store in Queens, he was debating whether to reapply for a license in this general round.
“It’s very difficult emotionally,” he said.
Reginald Fluellen, senior consultant for the Cannabis Social Equity Coalition, blamed the state for a failed launch.
“They have failed miserably to give justice-involved people the kind of head start, the kind of foothold in the marketplace that they promised,” Fluellen said.
Under the new regulations, medical marijuana providers could begin retail recreational sales at one of their existing dispensaries starting December 29. They could begin selling recreational marijuana at two more dispensaries six months later. The price of entry for those companies is steep: a $20 million licensing fee, $5 million of which must be paid up front. But several companies are expected to join.
“We expect New York to be the center, or one of the centers, of legal cannabis on the East Coast,” said Curaleaf CEO Matt Darin. “That’s why we are very optimistic and have invested a lot of capital and time to be able to maximize the opportunity.”
Curaleaf, which operates in several states, has already invested $50 million in New York, most of it in a recently expanded indoor cultivation facility south of Albany that now serves the medical market. There, rows of plants mature in brightly lit rooms where humidity, temperature and nutrition are tightly controlled, a scene in stark contrast to the fields and greenhouses that have defined New York’s adult-use market since the start of the year. crop last year.
Curaleaf will be able to double the size of the facility to 64,000 square feet, or about 1.5 acres (0.61 hectares), if the market dictates, said Joe Holland, executive vice president.
To protect against retail monopolies, medical providers will be limited to three outlets. And in a nod to farmers, their stores will initially have to dedicate half of their shelf space to products grown and processed by independent companies.
Still, critics say the state should have given economically and socially diverse entrepreneurs more time to succeed before allowing in larger competitors.
Joseph Calderone of Grateful Valley Farm near the Pennsylvania border compared it to small hardware stores competing with big box stores. Large indoor facilities, he claimed, can produce multiple crops a year. Meanwhile, farms having trouble selling their crops are “on the brink of failure,” he said.
“We were given a good opportunity to grow. They asked us to do that,” she said. “We kept our promise. The State did not keep its promise.”
Bureau of Cannabis Management Executive Director Chris Alexander said the new regulations maintain New York’s commitment to social and economic equity, while keeping the market more competitive than in other states. That includes giving priority consideration to social and equity applicants in the current round.
While he acknowledged there was some “frustration” in getting retail stores open, Alexander said the state has shown that a market supplied by small farmers can work.
“We have some of the best performing dispensaries in the country here in New York,” Alexander 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.
“I think there’s enough business to go around,” said Christian Chavez, CEO of Statis Cannabis Co. He said sales have been good since they opened their Bronx dispensary in July. “I think it will be quite a while until this market becomes saturated in New York.”
2023-10-12 13:09:39
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