New York recently legalized adult-use cannabis in March 2021, encouraging social equity applicants to apply for licenses before the MSOs would be allowed to sell adult-use cannabis as well as MMJ. This has since caused a lot of delays in the rollout of retail sales due to several lawsuits and bureaucratic holdups.
Four multistate operators (MSOs) are now asking the Governor of New York, Kathy Hochul, to allow them immediate access into the market, citing government “ineptitude” that has caused this stagnation in their plans.
“The state’s ineptitude is endangering New Yorkers who wish to use cannabis safely and legally while also hurting taxpayers,” said the letter, signed by Matt Darin, CEO of Curaleaf; Brett Novey, CEO of PharmaCann; Ben Kover, CEO of GTI and Denis Curran, CEO of Acreage.
The letter from the MSOs also reminded Hochul that multistate operators are limited to up to three retail locations statewide and that tax revenue from sales at MSO-owned stores would fund social equity businesses.
All four companies are members of the Coalition for Access to Safe and Regulated Cannabis, which sued the state in March in a bid to access the adult-use market. According to court filings per the New York Post, discovery from the state is due next week.
It appears that these MSOs are trying to come in as the “saviors” of the industry and as though they are working for the good of the people. It remains to be seen how this request plays out and the possible effects it could have.
Background on New York’s Adult-use Cannabis Market
New York legalized adult-use cannabis in March 2021 through the Marijuana Regulation and Taxation Act. This act allowed the sale of up to three ounces of dried flower, or equivalent cannabis products, by persons aged 21 and older. It also created an Office of Cannabis Management (OCM) that was charged with overseeing a regulated, taxed market for adult-use and medical cannabis.
The plan was that social equity applicants would have priority over MSOs when it came to issuing licenses. However, due to red tape and lawsuits, this has caused delays in the application process as well as the rollout of retail sales. As a result, even though New York is currently one of the most populous states in the US, only a small handful of dispensaries are open for business, and limited access to cannabis products.
As of now, it looks like the cannabis industry in New York will be at a standstill until the current lawsuit filed by disabled veterans against the state is resolved. The suit, which was filed earlier this year, claims that these veterans have been effectively left out of the licensing process.
The current state of the New York market has resulted in difficulty for many companies who have applied for licenses, which has been compounded by the actions of the multistate operators. With their recent request to the Governor, it appears that these MSOs want to bypass this system and be one of the next licenses issued in the state, which could potentially cause more delays as well as further inequality among license holders.
It will be interesting to see how this situation plays out and if the MSOs are successful in their request for immediate access to the market. Only time will tell what implications this could have on the cannabis industry in New York and beyond.
MSO’s Finally Make Their New York Play Crystal Clear
It seems multistate operators (MSOs) have finally made their intentions known in regard to the New York market with a letter sent directly to Governor Kathy Hochul. They are asking for immediate access into the market, citing government “ineptitude” and “intransigence” that has caused stalling in their plans.
The four MSOs requesting access to the New York market include Acreage Holdings, Curaleaf Holdings, Green Thumb Industries, and PharmaCann. The letter sent to Hochul also reminded her that multistate operators are limited to up to three retail locations statewide and that tax revenue from sales at these stores would fund social equity businesses.
The push by MSOs to gain access to the New York market is likely due to their involvement in the Coalition for Access to Safe & Regulated Cannabis, which filed a lawsuit against the state of New York in March. The coalition argued that the state’s failure to process applications with speed was “arbitrary and unconstitutional.” They also claimed that the state was infringing upon their constitutional rights by blocking them from entering the adult-use market.
“Claimed” Benefits to New York Cannabis From MSO’s Themselves
The MSOs that sent a letter to Governor Hochul also “claimed” that allowing them access to the market would bring several benefits, both for consumers and the state. These include increased access to the larger adult-use cannabis market with more consumer choice and competitive pricing. Additionally, they claim it could generate more tax revenue for New York and create jobs.
However, it seems like their true intentions in requesting immediate access to the market may not be totally altruistic. By circumventing the planned state-mandated rollout, they are essentially skipping over those who have been affected most by the drug war and veterans – potentially disadvantaging them from accessing this lucrative industry.
Documents obtained by the New York Post show just how confident these MSOs are. “For years, New Yorkers have trusted us to build and grow the Empire State’s medical cannabis program,” they wrote. “Now, a decade later, our plea is simple: Direct OCM to authorize registered organizations to begin adult-use cultivation and dispensary operations without delay so the State’s legal cannabis market can thrive for all participants, creating a reliable revenue and job-generating industry for decades to come.”
The MSOs’ request to Governor Hochul for immediate access to the New York adult-use cannabis market raises some eyebrows. It seems that their intentions may not be completely altruistic, and they are willing to bypass the state-mandated rollout in order to get ahead of everyone else, including veterans and those affected by the drug war.
Ultimately, the decision rests with Governor Hochul, and it will be interesting to see what she decides. Whatever the outcome, priority should be given to those who have been most impacted by prohibition. After all, this is an opportunity for cannabis to become a force for good in New York – not just another greedy grab for profits from multistate operators.
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