New York is preparing to launch its adult-use cannabis market, and the state has finally closed applications for retail storefronts. Over 900 applications have been submitted to open a retail storefront in the state. The window for submitting applications opened on August 25th and concluded on September 26th, and sales could begin within the next few months. However, only 150 retail licenses will be available, leaving almost 85% of applicants out at least $2,000.
The Requirements For Licensing
To qualify for a conditional adult-use retail dispensary license, New Yorkers must meet the following requirements:
First, applicants must be a business that is owned by a justice-involved New Yorker or a close family member of such a person. Applicants are not individuals; rather, they are entities. This means that at least thirty percent (30%) of the applicant must be owned by an individual who is/has been convicted of a marijuana-related crime, a dependent of someone convicted of a marijuana-related crime, or someone who had a dependent convicted of a marijuana-related crime. Applicants must submit the proof in order to be considered.
Secondly, applicants must prove they have qualifying business experience. A qualifying business is one that made a profit in two (2) of the three years it was in operation. Any business, regardless of the services provided, the structure of the business, or the location, can qualify.
They also must prove a significant presence in New York State. Significant presence requires that the person in sole control and at least thirty percent (30%) ownership of your retail dispensary have residency (live in), assets (vehicles, land, etc.), real property (this includes primary, secondary, and/or rental homes), a bank account, or some other connection with or in New York State.
The Road To Justice
New York’s approach to dispensary licensing is different from other states, which have either barred people with certain criminal convictions or set aside a portion of licenses for people affected by the drug war. While many have implemented justice applications, New York is unique in exclusively opening up conditional licenses to justice applicants.
New York has a relatively straightforward application process that does not explicitly address applicants’ criminal records. However, some of the requirements may present barriers to entry for potential applicants.
Stephanie Schuman, a lawyer for a New York law firm that specializes in cannabis, said the application questions were straightforward, but that the process could be difficult for applicants to navigate, especially those who have been imprisoned for a significant period of time and have yet to catch up to technological advancements.
America’s Penal System And Its Effect On Potential Licensees
The criminal justice system also makes it really hard for people to get jobs. Nearly 65 million Americans are convicted criminals, and with this comes restrictions on jobs, housing, education and public assistance in many jurisdictions.
For almost every state, jail time isn’t enough: there are almost always collateral consequences to convictions, which can include loss of voting rights, loss of professional licenses, and in many cases, loss of public benefits. When it’s hard to find a job, it’s hard to get to the point where you can afford a $2,000 application fee, and it’s even harder to accrue capital to start a business.
It’s also likely that those who have suffered through the criminal justice system will have bad credit from years of imprisonment. That makes it hard to secure bank loans — another barrier to proving business acumen, a requirement for the cannabis license.
We hope to see New York State’s adult-use cannabis thrive. While small businesses are the backbone of the industry, and we appreciate NY’s goal to improve equity and access to the cannabis market, there are still some issues that have not been adequately considered. For example, the state has provided no timeline for when operations can start, only loosely stating that it could be anywhere from the end of this year to the beginning of next. This makes it difficult for applicants to secure retail spaces and investments as they anticipate a possible delay in operations.
Overall, this is a bit of a messy transition. We anticipate more difficulties and bumps in the road in the upcoming months. However, there is still hope for NY state’s cannabis market: it’s projected to be a multi-billion dollar industry!
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