The cannabis industry recently celebrated, with New York state regulators recently awarding 30 more recreational marijuana licenses to local qualifiers. However, despite these 30 recreational marijuana stores now being able to operate, adult-use retail in critical locations across New York is still being blocked, thanks to a pending lawsuit.
According to news reports, a federal judge recently ruled that the New York regulators will have to delay the issuing of licenses until the lawsuit filed by a Michigan-based applicant is finally resolved.
So far, the Office of Cannabis Management has now licensed 66 retailers in the state of New York. This phased rollout clearly determines which retailers have the best chance to be successful based on being the first movers in a particular area. It also triggers some concerns within the broader cannabis industry.
Date Set For Retail Operations To Qualifiers Featuring These Criteria
Some licensed retailers and individuals include Ten Cees LLC, Indoor Trees Corp., Jupiter Cafe, Eco Sesh, Humble County LLC, Pure Blossoms LLC, and Budding Industry Group LLC. More names can be found in the released document.
Fortunately for adult cannabis users, two retailers have received licenses and have already started operations in Manhattan, with a third retailer opening its doors soon. Out of the 16 licenses issued in New York City, eight were awarded in Manhattan. Out of these eight, four were awarded to retailers in the Bronx and four in Queens. Opening dates for these retailers are still unknown. However, opening dates are said to be released soon.
In Brooklyn and four other areas upstate, licensed dispensaries awarded licenses have yet to open, with the process, unfortunately, stalling due to the lawsuit. The lawsuit was filed by an out-of-state company that alleged New York’s licensing scheme violates federal law and favors New Yorkers.
Nonetheless, qualifying individuals awarded the adult-use retail licenses either had a previous cannabis conviction and a history of running a successful business or were a nonprofit organization with a history of serving people involved with the criminal justice system. These nonprofits also had at least one “justice-involved” board member.
Shortcomings Of The Dormitory Authority
According to the published news reports, “Twenty-eight of the licenses awarded Wednesday went to qualified individuals. Those licensees are permitted to seek out their own real estate or operate in a “turnkey” location set up by the state Dormitory Authority.”
The Dormitory Authority of the State of New York, the agency managing funds disbursement and assisting with real estate and funding, has been searching for good retail locations throughout the state of New York. More specifically, the agency searched local municipalities that have opted to allow retail dispensaries.
This assistance and real estate support for social equity applicants has, however, triggered much concern among local entrepreneurs and real estate brokers. Those concerned are worried about real estate agents working on behalf of the state and how this will inevitably increase competition and prices for smaller operators who are also on the hunt for retail properties. This adds to the existing woes and challenges faced by smaller retailers. Altogether, this may create more competition within the broader industry, however, it remains to be seen in the future.
Furthermore, mandatory setbacks make it more difficult for clients to enter into long-term leases, with landlords favoring long-term deals with the state over private business leases.
More to follow as more news is published on the matter.
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