Applications for legal cannabis businesses have been launched by the Office of Cannabis Management, but the development of a fully functioning recreational market will be a gradual process.

After a prolonged wait of over two years, the state’s Office of Cannabis Management has, at last, started the licensing process for all businesses aspiring to participate in the legal cannabis industry. For New Yorkers who anticipated that this move would swiftly pave the way for easy access to recreational marijuana, it appears that there is still a significant path to traverse before that aspiration materializes.

On October 4th, the Office of Cannabis Management officially unveiled a roughly two-month application period for businesses interested in securing licenses to operate retail cannabis businesses. Until this point, the agency had solely issued conditional retail licenses to select social equity applicants. Nevertheless, with the approval of new regulations last month, New York is making significant progress in the direction of creating a lasting cannabis market. Chris Alexander, the Executive Director of the office, has expressed his excitement about the commencement of the application process and underscores the significance of educating a wide range of interested individuals to ensure widespread access to this opportunity.

While this development is expected to bring significant growth compared to the past two years, cannabis attorney Lauren Rudick advises enthusiasts to moderate their immediate expectations. Officials anticipate issuing between 1500 to 2000 licenses during this initial wave of applications and approvals. Although this is a substantial increase from the current count of conditional retail license holders, it still represents just a fraction of the potential of a fully realized legal cannabis market. Additionally, even after licenses are granted, most businesses will likely require several additional months to open their doors. Rudick underscores that this procedure is lengthy and susceptible to legal challenges.

The introduction of adult-use cannabis and the state’s licensing processes have already been entangled in numerous legal disputes, including one that led to a state judge issuing an injunction preventing licensed businesses from commencing retail operations. Rudick anticipates that expected lawsuits will further complicate the already extensive process.

Alexander acknowledges that his agency is striving to adhere closely to the 2021 state law that legalized recreational cannabis and established the framework for the legal market. Nonetheless, he acknowledges that New York’s licensing system is not impervious to the legal issues that have afflicted cannabis markets nationwide. He underscores that the guiding principle is unwavering adherence to the law in facilitating this opportunity.

Currently, there are fewer than two dozen legal retail cannabis stores operating in New York State, while unlicensed businesses continue to expand within the market. In addition to announcing the new application window, Governor Kathy Hochul has declared new enforcement efforts to combat the illicit market. However, Rudick believes that resources should shift away from enforcement and instead focus on reducing the barriers to entry for small businesses and equity applicants seeking to establish storefronts in New York. She argues that heightened legal competition will inherently reduce illicit sales.

The legislation legalizing cannabis provides priority consideration for social equity applicants, including women- and minority-owned businesses, veterans, distressed farmers, and individuals impacted by past marijuana enforcement. The law establishes a goal for 50% of licenses to be awarded to such applicants and implements various programs to aid them in the application and financing process. Alexander affirms that the Office of Cannabis Management is currently focused on providing this kind of assistance, especially now that the application window is open. He stresses the need for comprehensive support from the application process to education, fees, and post-licensure activities in order to ensure the success of these applicants.