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5 questions NY’s cannabis industry faces in 2023

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In the last 12 months, New York has taken steps in rolling out its legal cannabis industry, and though it’s made progress, there are still outstanding questions.

Not every part of the rollout went as planned: The state had planned to open 15-20 dispensaries by year-end in turnkey locations provided by the state. Each region of New York was supposed to be awarded its first group of retail licensees. Cultivators and processors were growing and planning on having places to sell their products.

But instead, one New York City dispensary will be open by Jan. 1, litigation halted licenses in some areas of the state and more cultivators and processors have since been awarded licenses.

Here are five questions New York’s cannabis industry still faces in 2023.

What’s the status of the fund?

New York’s $200 million Social Equity Cannabis Investment Fund was seeking requests for proposals for a bank to handle the funds, but it canceled that search in November.

A spokesperson for the Dormitory Authority of the State of New York told Cannabis Insider that the fund would be selecting its own partner.

At the latest Cannabis Control Board meeting, retail licensees were seeking guidance on how to tap into the fund for build out.

When will more locations be open, and where will they be?

New York state has awarded 36 retail licenses so far. The first is set to open in New York City this week. It’s not yet clear when other dispensaries will open their doors.

The state originally planned to have 15-20 turnkey retail dispensaries open by year-end, but teams working on build-out weren’t announced until Nov. 18 and the Office of Cannabis Management announced that licensees could submit their own dispensary locations for approval.

Housing Works, a nonprofit conditional adult-use retail dispensary licensee, will open its dispensary Dec. 29 at 750 Broadway in the Astor Place neighborhood in Manhattan.

There’s still a lawsuit blocking other regions from awarding retail licensees. What’s next?

A federal judge temporarily ordered New York state to halt the awarding of the first conditional adult-use retail dispensary licenses in five areas of the state in November.

The order is pending a resolution — meaning that unless the parties hold a hearing on the issue or if the judge decides to dismiss or modify it, the injunction will remain in place.

Ryan McCall, an associate at Tully Rinckey PLLC in Albany, said in his experience, injunctions can last anywhere from one to six months — but could be longer or shorter.

Without local dispensaries, the cultivators in places like Western New York are left to find other ways to sell their products. The state argued in its motion filed Nov. 22 that many of the cultivators are family farms that invested a lot to enter the industry.

Some applicants have asked the Cannabis Control Board to release a list of potential licensees in the areas affected by the litigation so they can begin to further prepare business plans.

When will delivery operations start?

CAURD licensees are permitted to start by selling and delivering directly to consumers. CAURD licensees can be approved to operate a delivery operation for up to 12 months after their license is granted, according to guidance from the state Office of Cannabis Management. They cannot submit an application for a temporary delivery-only license after their dispensary is open.

It’s something that Albany region CAURD licensee Matthew Robinson is actively pursuing.

But licensees have asked the Cannabis Control Board for further guidance on delivery, including where their delivery location can be and training, and advertising/marketing on social media.

What about the ‘gray market’ that’s still operating?

Chris Alexander, executive director of the state’s Office of Cannabis Management, said at the board’s Dec. 21 meeting that the New York City Sheriff’s joint task force had confiscated $4 million in illicit cannabis products from 53 locations, including 600 pounds of cannabis flower and more than 28,000 THC edibles and pre-roll products.

Alexander said receiving a cease-and-desist letter from OCM for selling illicit products could impact the ability to get a license in the future.

The state has also launched a dispensary verification tool to post in storefronts to help customers identify which dispensaries are licensed by the state.

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