Several New Yorkers who applied to open a marijuana dispensary and already have a location secured want answers. They said they feel misled by the state Office of Cannabis Management as the state agency plans to award licenses to less than a quarter of applicants with a potential storefront.
Aspiring cannabis retailers applied for a general adult-use retail license in two batches this fall. OCM encouraged all entrepreneurs who rent or own a likely retail space to apply first in what Cannabis Control Board members have referred to as a “priority” round, which closed Nov. 17.
The opportunity for others seeking a retail license to apply without a location closed earlier this week, netting between 5,000 and 7,000 applications, according to OCM. The final number of applications is unknown as the agency weeds out duplicates and other logistics.
The state Cannabis Control Board announced earlier this month it will award 250 dispensary licenses early next year of the roughly 1,500 people who applied in the first with retail space, or just over 16%.
Applicants each pay $1,000 to submit a license application to the state office and are processed using a randomized lottery system — meaning most applications will never get a review.
“We’re confused … Everyone’s confused,” Paul Suits, of Cortland, said Thursday.
Suits applied with his brother to open the dispensary Lakehouse Cannabis in a space they own, and attended the Cannabis Control Board’s Dec. 8 meeting in Albany. The pair learned more details about the board’s planned procedure to process general adult-use retail licenses that surprised them, including the specifics of the lottery system and the fact their application may never get processed.
Board members finalized the first randomized list of applicants the first week of December, but the department has not notified applicants of their place in the queue.
“We want clarity, and we want to be able to operate a business within the rules and regulations set by the state,” Suits said. “But we’re being told, ‘Oh, just wait, just wait.’ And it’s over two years now that we’re being told to wait and we’re still waiting. And we don’t know what for.”
Multiple applicants expressed similar confusion and frustration with OCM’s process, but declined to be interviewed out of fear it could impact their chances to get a license.
Office of Cannabis Management Executive Director Chris Alexander said that applicants with a retail space will be processed first, but will not be given other priorities for approval over other applicants.
“A license, is a license, is a license,” he said Thursday. “But you know, we’re going through these folks first because they do have those locations under control.”
OCM is expected to inform the first group of applicants of their spot in the randomized list sometime next week, Alexander said.
OCM offered application support and held public community sessions in Harlem, Queens and Albany this year. But applicants say they often call or email the office and do not get a response.
Alexander said the board will issue 250 permits to start as he expects dozens more of the 463 Conditional Adult-Use Retail Dispensary program licensees to open shop in the next two months after the recent settlement of a lawsuit that halted new activity for almost four months. Another suit was filed in federal court against OCM and the control board Monday.
The board wants to err on the side of caution and issue only 250 licenses of the first group to ensure the state has enough supply of New York-grown cannabis. But farmers have complained for more than a year about sitting on hundreds of thousands of pounds of surplus flower and cannabis product from last year’s harvest and the most recent crop with a handful of legal dispensaries open to sell to.
He says the board is starting with a smaller group of permits as dozens more dispensaries are set to open in the coming months.
“We’re trying to keep a balance so that we never crash the market,” Alexander said. “Just a couple months ago… farmers had excess product that couldn’t get onto shelves. We also don’t want to be in the opposite position where shelves are empty, right, and so we try to keep balance in the supply chain.”
More than 400 CAURD licensees have the legal green light to open their dispensary doors, but many have struggled to find a suitable location.
“Our early performance thus far makes it clear that demand is not the issue in this market — retail access is,” OCM policy director John Kagia said during the Sept. 12 meeting.
New York has 37 legal marijuana dispensaries up and running, and board members have said time is of the essence to get more stores open, which applicants said made them believe OCM would greenlight applications with a secured location faster.
Applicants say the process to get a storefront secured and to apply was costly, and will hurt the chances of small businesses in New York opening their doors.
OCM uses application fees for administrative and processing costs, Alexander said, adding that cost is an expense of doing business.
“While we’re making sure the application fee is not a barrier to entry, these are still significantly sized businesses and folks are going to have to go out and raise capital to operationalize those businesses,” he said.
But several applicants said Thursday the state set a dangerous precedent by awarding plaintiffs with provisional licenses to reach an agreement in its most recently settled lawsuit. New York’s Marijuana Regulation & Taxation Act, which legalized recreational adult-use cannabis in the state in 2021, specifies that 50% of permits to go to Social & Economic Equity, or SEE, applicants, and 50% of licenses to non-equity applicants.
“It’s a goal to meet that,” Alexander said.
Multiple applicants question how the ratio outlined in the law could be satisfied with a randomized lottery system and how it would not favor certain regions of the state over others, but Alexander argues the sample size the board will pull should reflect the larger group.
The board plans to award 250 licenses to people with a store space, and about 500 licenses of the second group of general adult-use retail applicants.
The Cannabis Control Board is expected to meet and award more licenses in mid- to late January. A meeting date and location has not been set.
