The cannabis market in New York has been a hot topic for discussion over the past few years. After the legalization of medical marijuana in 2014 and the subsequent decriminalization of recreational use in 2021, many were eagerly anticipating the opening of an adult-use market in the state. However, due to various legal challenges and delays, this process has taken much longer than expected.
This all changed in May, when the New York State Office of Cannabis Management (OCM) announced a major policy shift. The original plan had been to delay access for larger companies, known as Multi-State Operators (MSOs), for another two years before allowing them into the adult-use market. However, this timetable was accelerated, and MSOs were recently granted access before the end of the year, as reported by Green Market Report.
The delay in allowing MSOs access to the adult-use cannabis market in New York was largely due to lawsuits, one from veteran-owned cannabis companies who claimed that the licensing excluded them.
In another lawsuit halting the licensing program, several MSOs, including Acreage Holdings and Curaleaf, filed their own lawsuits against the state, claiming that they should not be excluded from the market due to their size and experience. These lawsuits were recently settled with the OCM, allowing MSOs to enter the recreational market earlier than expected.
The settlements also include provisions for social equity applicants, aiming to promote diversity and inclusion in the industry.
Approval of MSOs for Adult-Use Sales
As the adult-use market in New York prepares for its official launch, six medical marijuana companies have been given the green light to also sell recreational cannabis. These companies per Green Market Report include:
- Columbia Care NY LLC
- Curaleaf NY LLC
- Etain LLC, which is owned by Riv Capital
- NYCANNA LLC, which is owned by Acreage Holdings Inc.
- PharmaCann of New York LLC
- Valley Agriceuticals LLC, which is owned by Cresco Labs
The OCM has also implemented requirements and limitations for these initial sales. These include reserving at least 50% of shelf space for non-MSO cannabis brands and a cap on the number of dispensaries each MSO can open in the first year. This was done to address concerns about diversity and inclusion in the market, as well as ensure that smaller operators have a chance to thrive. However, some have raised concerns about the impact on smaller businesses in the market and the potential dominance of MSOs.
The OCM has stated that they will closely monitor the situation and make adjustments as needed. With these measures in place, it is hoped that the recreational market in New York will provide opportunities for a diverse range of businesses to flourish.
End of Growers Showcases Program
In an effort to support smaller cannabis companies affected by the slow rollout of licensed retailers due to the lawsuits, the OCM implemented a temporary program called the Growers Showcases. This allowed small businesses to sell their products at designated events while they waited for full access to the market.
The program was a success, with many smaller companies able to showcase and sell their products to consumers. With the recent settlement allowing MSOs into the market earlier than expected, the program will be coming to an end.
However, the success of this program has highlighted the need for more flexibility in event regulations and a way for smaller companies to participate in industry events even after full access to the market is granted for MSOs.
The OCM will likely take this into consideration when developing future regulations for cannabis events in the state. In order to promote a diverse and inclusive market, it will be important for regulations to provide opportunities for all types of businesses, regardless of size or resources. This way, the industry can continue to thrive and evolve in New York.
Overall, the recent decision to allow Multi-State Operators (MSOs) access to the adult-use cannabis market in New York before the end of the year has been met with mixed reactions. While some see this as a necessary step for the industry’s growth and development, others argue that it goes against the initial plan to prioritize smaller businesses and promote diversity and inclusion.
The delay in allowing MSOs access was due to lawsuits and legal battles, preventing smaller businesses and social equity applicants from fully participating in the market. And now with the settlements made to allow MSOs early entry, there are concerns about the impact on these smaller companies.
While provisions have been put in place to support smaller businesses, such as reserving shelf space for non-MSO brands, there are still valid concerns about the potential dominance of MSOs and the missed opportunities for smaller businesses that had to wait for so long.
Moving forward, it will be important for regulations to continue promoting a diverse and inclusive industry in New York. This includes considering the impact on smaller businesses when making decisions and providing opportunities for all types of companies to thrive. Only then can the cannabis market in New York truly reach its full potential.
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