The New York Office of Cannabis Management (OCM) recently released a comprehensive report on the first year since legal adult-use cannabis sales started. This milestone marks a significant moment for the state and its residents as it continues to navigate through the complexities of establishing a regulated cannabis market.
Explore how #NYcannabis is creating a market that values community and opportunity for every New Yorker. Don’t just take our word for it – the numbers speak for themselves. pic.twitter.com/tuuoOpg5sV
— NYS Office of Cannabis Management (@nys_cannabis) December 27, 2023
From January to December 2023, the cannabis industry in New York has experienced highs and lows. But let’s be real honest, the overall performance of the NY regulated cannabis market has been extremely hampered by everything from lawsuits halting progress of licensing to large multi-state operators (MSOs) entering the recreational market sooner than expected to inept leadership at the OCM, it’s been a rollercoaster ride for stakeholders involved. The first year’s numbers are a fraction of what was previously “predicted” in the initial years roll-out.
But with this report, we get an in-depth look at the progress made and challenges faced by the OCM in establishing a well-regulated adult-use cannabis market. Let’s dive into some of the key highlights from the report and what it means for New York.
The Growth of Retail Sales in the First Year
Despite facing challenges, the first year of legal adult-use cannabis sales in New York has been a success. According to the report by the OCM, retail sales generated a total of expected to exceed $150 million in sales for 2023 once December sales reports come in, with a steady month-over-month increase in retail storefront sales, from $2.2 million in January to $18.8 million in November.
Over 3.5 million units of cannabis products were sold, according to the report.
This includes a diverse range of products available at adult-use dispensaries, including 550 locally grown strains by New York farmers.
The introduction of the Cannabis Growers Showcase (CGS) initiative to create accessible retail avenues to alleviate the pressure on farmers to find available shelf space has also provided retail avenues for these farmers, showcasing their high-quality and unique products to consumers.
The CGS initiative has been deemed a success by the OCM. Over the course of 141 showcase days, in 43 cities and towns across the state, sales exceeded $4.8 million and 3% of the total market, which provided some relief for the smaller farmers struggling to stay afloat with the number of limited retails.
“New York Cannabis has momentum heading in to 2024 and we’ll keep working to make this market grow,” said Chris Alexander, Executive Director of New York’s Office of Cannabis Management. “We have a lot of work to do, and we have much to be proud of; now that the core market architecture is in place, my team at OCM is ready to scale and help this industry thrive across New York State.”
Retail sales were not the only program seeing growth in 2023 according to the report, over 121,900 patients registered with the Medical Cannabis Program.
One notable change in the medical program was the introduction of auto-registration, making it easier for patients to access medicinal cannabis. This was a much-needed update to the program, as many patients faced challenges in registering and obtaining their medication.
Licensing and Application Breakdown
According to the report, there were a total of 6,934 applications received during the 2023 window, with a breakdown by license type.
- 538 applications for Processor Licenses
- 372 Applications for Cultivation Licenses
- 351 Applications for Distribution Licenses
- 1349 Applications for Microbusiness Licenses
- 4324 Applications for Retail Dispensary Licenses
- Of these, over 55% were Equity Applicants, totaling 3826 Applications
The OCM also touts the number of licenses issued in the report, with nearly 6,200 licenses, permits, and registrations issued.
- 279 Adult-Use Conditional Cultivator Licenses
- 40 Adult-Use Conditional Processor Licenses
- 463 Conditional Adult-Use Retail Dispensary Licenses
- 5,404 Cannabinoid Hemp Licenses and Permits
- 10 Registered Organizations approved (9 renewed, 1 new, 1 of the original RO renewals is still pending)
- 6 Registered Organizations approved to participate in Adult-Use
Enforcement Against “Illicit Market”
Enforcement is a crucial aspect of the adult-use cannabis market in New York. As we all know, it is no secret that there are thousands of non-licensed retailers operating in the state, making it challenging for legal companies to compete. To address this issue, Governor Hochul signed new enforcement legislation in May 2023, giving additional power to the Office and the Department of Taxation and Finance to enforce regulatory requirements and crack down on illegal sales.
Since implementing a new operational model, the Enforcement Team has conducted 369 inspections, including 103 re-inspections, of locations suspected of selling cannabis without proper licensing. The results have been significant, with over 305 notices of violation/orders to cease being issued. Additionally, more than 11,600 pounds of illicit products with an estimated street value of over $56 million have been seized.
Overall, the first year of legal adult-use cannabis sales in New York has been a rollercoaster ride. Turbulent would be an understatement, with challenges and obstacles at every turn. However, amidst all the chaos and uncertainty, one thing remains clear – there is immense potential for growth and success in this industry.
The data provided by the Office of Cannabis Management shows that despite the challenges, the market continues to expand and thrive. With proper enforcement and regulations in place, New York is on track to becoming a leader in the legal cannabis market. Exciting times lie ahead for both businesses and consumers alike as we witness this industry’s growth and evolution in the state of New York.
At the time of this being published, the New York OCM released their full first-year report with TONS more information. You can find that here.
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