Cannabis and Real Estate in New York

David Goldsmith

All Powerful Moderator
Staff member
I'm seeing not only tons of sales on the street (if you haven't been to Washington Square Park lately there's a ring of vendors surrounding the fountain ⛲) but unlicensed retail establishments are popping up all over downtown Manhattan. The head of New York State Office of Cannabis Management, Christopher Alexander, is claiming unlicensed establishments will be barred from ever receiving a license but I don't believe him.

High Times

New York Cracking Down on Unlicensed Weed Dealers​

New York’s Office of Cannabis Management last week identified more than 50 businesses that the agency says are selling cannabis illegally.

With legal sales of recreational cannabis in New York still months away, state regulators are cracking down on unlicensed businesses that have jumped the gun and are already selling weed. Last week, officials with the New York Office of Cannabis Management (OCM) publicly identified 52 businesses that have been sent cease-and-desist orders directing the shops to stop all illicit cannabis sales.
“You are hereby directed to cease any, and all, illegal activity immediately,” read the cease-and-desist letters quoted by The Gothamist. “Failure to cease this activity puts your ability to obtain a license in the legal cannabis market at substantial risk.”
The OCM added that the identified retailers were falsely depicting their businesses as licensed cannabis dispensaries. OCM Chair Tremaine Wright said in a press release that unlicensed sales, including via businesses that provide ostensibly free marijuana products with the purchase of other merchandise, are illegal and pose a health risk to the community.
“There are no businesses currently licensed to sell adult-use cannabis in New York State. Selling any item or taking a donation, and then gifting a customer a bag of untested cannabis does indeed count as a sale under New York’s Cannabis Law,” Wright said in a statement from the agency. “You need a license to sell cannabis in New York. Licensed sales and a regulated market are the only way New York’s customers will be assured that the cannabis products they are purchasing have been tested and tracked from seed to sale. Sale of untested products put lives at risk.”

Businesses Face Permanent Ban from Legal Weed Industry

The cease-and-desist letters sent by the OCM note that continued illicit sales of marijuana by the identified retailers will make the businesses ineligible to receive a cannabis business license from the agency in the future. If the business storefronts named by the agency fail to end operations immediately, they will be referred to Cannabis Control Board “for permanent barring from receiving any cannabis licenses in New York State,” the agency stated.
“These stores are masquerading as licensed, regulated businesses, but they are nothing of the sort. They aren’t creating opportunity, they are creating confusion – New Yorkers think they’re buying a high-quality, tested product when they aren’t,” said Chris Alexander, executive director of the Office of Cannabis Management. “Not only are these stores operating in violation of New York’s Cannabis Law, but they also are breaking state tax and several municipal laws. I look forward to working with other regulatory bodies across the state to hold these stores accountable for their flagrant violations of the law.”

The identified businesses were originally sent cease-and-desist orders in February, advising them that their operations were illegal under the Marijuana Regulation and Taxation Act (MRTA), which was passed by New York lawmakers last year. The OCM announced the regulatory action at the time but declined to publicly identify the affected retailers. But after pressure from local media, the OCM made the list of storefronts that had been warned by the agency available last week.
“We have an obligation to protect New Yorkers from known risks and to strengthen the foundation of the legal, regulated market we are building. We will meet the goals of the MRTA to build an inclusive, equitable and safe industry,” Wright said in February. “Therefore, these violators must stop their activity immediately, or face the consequences.”

More Retailers Being Investigated

The OCM also noted last week that it has received information from law enforcement and the general public about additional retailers who may be selling cannabis in violation of the law and will be reviewing the tips for possible additional regulatory action. The agency added that until sales of adult-use begin at licensed retailers, which is expected to happen later this year, the only legal way to procure safe, lab-tested cannabis is through the state’s regulated medical marijuana program.
“New York is building the most equitable cannabis industry in the nation, one that prioritizes those communities most harmed under cannabis prohibition. Stores selling unregulated cannabis products without licenses undercut those efforts. Plain and simple,” said Damian Fagon, OCM chief equity officer. “Illicit stores don’t contribute to our communities, they don’t support our public schools and they don’t protect consumers. That’s why we’re working with partners across [the] government to investigate these operations and hold them accountable.”
One of the operations identified last week by the OCM is the Empire Cannabis Club, which has two locations in Manhattan. At Empire, customers purchase a daily or monthly membership to the club and receive cannabis from the club. Steve Zissou, a lawyer representing Empire, said that the company is confident that its operation is legal under the MRTA, which defines what constitutes a “sale” of cannabis and specifically allows the transfer of up to three ounces of cannabis “without compensation.”
“Empire’s business model is based on that,” said Zissou. “It’s a non-charitable, not-for-profit cannabis dispensary that does not receive compensation for the transfer of cannabis.”
The attorney added that Empire is prepared to defend its position in court if necessary.
“There’s an old saying: If you want peace, prepare for war,” Zissou said. “And so Empire wants peace, but they’re prepared for war if and when it comes.”
 

David Goldsmith

All Powerful Moderator
Staff member
Cannabis goes legit: Real estate sees green in budding industry

Process is “riddled with regulations and roadblocks” for retail landlords and tenants​

After its retail properties took a hit during the pandemic, Delshah Capital decided to explore a burgeoning new industry. The New York real estate firm listed three of its Downtown storefronts on 420 Property, a site for cannabis space.
It has since received “a bunch of inquiries,” mostly from smaller operators, said Chad Roberson, partner at Delshah. But he is hesitant, seeing them as risky tenants facing entrenched obstacles.
One is competition from the illicit cannabis trade, now considered a gray market because enforcement has all but stopped. Another is financing: Because the product remains illegal at the federal level, traditional loans are not an option.

“As a landlord, you’re asking me to consider a cannabis tenant who’s going to have a way higher fixed cost structure than the gray market,” Roberson said. “And then you’re telling us we can’t get bank financing?”
Despite these issues, some believe that cannabis will be the next industry to save retail.

“It’s almost like having a medical client or urgent care client. Their business will never close,” said Colby Piper, RIPCO’s cannabis real estate specialist. “I almost consider them lifelong tenants.”
Because mail-order marijuana is not legal and dispensaries are considered essential businesses, brokers call them Amazon- and pandemic-proof — protected from two forces that have eroded brick-and-mortar retail.
Still, dispensary owners need to bring several crucial elements together: space, a license and customers. In the cannabis industry, that is no small feat.

Building owners warm up​

Delshah is one of many New York commercial landlords anticipating an influx of licensed cannabis dispensaries following the state’s March 2021 enactment of the Marijuana Regulation and Taxation Act. But building owners weren’t always so open to the idea.
For months before the law passed, Lee & Associates broker Greg Tannor said they were dismissive of his pitch to bring in a dispensary. But he persisted.

“We brushed it off and I said, ‘You know what? This is actually going to happen. You shouldn’t really be laughing at us,’” Tannor said. “And sure enough, a bill passed.”
Now, with the first licenses expected to be issued before the end of the year, sentiment is shifting about what is projected to become a $1 billion industry in 2023.
“[Landlords] are getting more interested,” said Piper. “They are, I like to say, canna curious.”
To get a license, dispensary owners must first secure retail space. Retailers and landlords have started to seek each other out. The properties Delshah listed are in the Meatpacking District and East Village, neighborhoods with high foot traffic.
“It goes back to the basics of real estate,” said Ryan George, founder of 420 Property, noting that a dispensary site should have good exposure to shoppers because advertising is “obnoxiously expensive.”
Dispensary owners must also consider a site’s vulnerability to robberies — buyers tend to use cash — and more mundane issues, such as whether it has 3,000 to 5,000 square feet of operating space, George said.

Space race​

The new marijuana law dictates that dispensaries cannot be within 500 feet of a school or 200 feet of a place of worship. In a city with upwards of 1,800 schools, 5,000 churches and 1,000 synagogues, eligible retail space gets winnowed down quickly.
“No other state has said, ‘We’re going to raise $200 million and build dispensaries for you.’”
Jeffrey Hoffman, cannabis attorney
On top of that, the city’s 59 community boards can influence the way licenses are distributed by suggesting increases to the school and religious buffers, which would shrink the number of potential sites even more.
If prospective retailers find a prime spot, they still have to contend with the possibility that someone may beat them to it. That someone might be the state of New York.
State lawmakers budgeted $200 million to build out 150 dispensaries by 2024. The Hochul administration’s Seeding Opportunity Initiative aims to reduce the prohibitive startup costs for entrepreneurs with prior marijuana convictions and their family members — those most directly affected by the war on drugs.

Jeffrey Hoffman, cannabis attorney
“No other state has said, ‘We’re going to raise $200 million and build your dispensaries for you,’” said Jeffrey Hoffman, a cannabis attorney. “When I saw this, I knew New York was going to be very serious about the social and economic equity component.”
CBRE is working with the state Dormitory Authority to scope out dispensary sites. Those locations will receive the first dispensary licenses in the state, essentially giving the state dibs on retail cannabis space.
Owners with tenants not participating in the program will have to wait — and hope — for them to snag licenses, and cross their fingers that the state does not set up a location down the block.
The location-first rule poses another risk in that dispensary owners need to secure and prepare a space without knowing if the license will be granted. “You have to be basically prepared to lose that money, because it’s a very competitive application process,” Tannor said. “And not everybody is going to win.”
But property owners can write leases that mitigate their liability if a tenant does not pan out. To figure out the best way, Tannor says he created a “secret sauce” based on conditions facing tenants and landlords.
“We have the worst of all worlds: a huge amount of cash coming in, but no banking.”
Jim Landau, NYC Cannabis Industry Association
“Some people are starting to pay rent now, or a fraction of the rent,” Tannor said. “Others are plunking down a good amount of security deposit. Some other operators are taking a free ride until the application period opens up. It depends on what keeps you up at night.”

Making bank without banks​

One thing that keeps building owners and new businesses up at night is interest rates. Cannabis loans tend to be costly because federal institutions will not touch them. Some politicians are calling for the Small Business Administration to give cannabis operations equal access to financing, but for now, pricey private loans tend to be the only option.
“Those rates are 200 to 400 basis points above bank financing,” Roberson said. “It’s really expensive. It’s a risky proposition.”
Landlords who have an eligible property with no mortgage are best positioned to lease to a cannabis dispensary because it removes a loan from the equation, said RIPCO’s Piper.
But real estate relies heavily on debt, which can complicate if not prevent a cannabis deal.
“Right now, what we have is the worst of all worlds,” said Jim Landau, a cannabis attorney and director of the New York City Cannabis Industry Association. “There’s a huge amount of cash coming in, but no banking.”

Competing in the gray area​

The incipient regulated industry will be competing with the legacy market — weed dealers with little overhead who have been selling to a loyal customer base for decades.
Legal players, meanwhile, face steep startup costs. “As a general rule of thumb, I tell people, don’t attempt to open a cannabis business without at least a million dollars liquid,” said 420 Property’s George. And given the risks to landlords, cannabis retailers’ rents are likely to be expensive as well.
Because of these factors, not many dealers are likely to go legal.
“You have to be prepared to lose that money, because it’s a very competitive application process.”
Greg Tannor, Lee & Associates
“The structure of the gray market has a long track record and is highly liquid,” Delshah’s Roberson said. “People that are going to have to pay a couple hundred grand for a dispensary license, they’re just going to say, ‘It’s not worth it.’”
Gray market sellers who operate too visibly, like the 66 that were handed cease-and-desist orders this year by the state’s Office of Cannabis Management, can expect to be shut down once licenses go out in earnest and the tax dollars start flowing, Hoffman said.
“Just like the State Liquor Authority is not going to allow an unlicensed bar that is operating openly and notoriously, the regulatory body for cannabis will act likewise,” he predicted.
But nimble operators, some of whom want to go legit but see no clear path under the state’s regulations, will remain competitive.
Given marijuana’s widespread use, the prospect of legalization in New York generated optimism that the industry would bring an infusion of investment and fill the pockets of dispensary operators and their landlords.
But between the government’s social-equity goals, licensing framework and gray-market enforcement challenge, a cloud of uncertainty has formed. “We know very little about how [the dispensaries] will operate,” Hoffman said.
The listing site founder agreed.
“The cannabis business is not for the faint of heart,” said George. “A lot of people have gotten into it thinking it was going to be easy money, and it’s really difficult. It’s an industry that’s riddled with regulations and roadblocks.”
 

David Goldsmith

All Powerful Moderator
Staff member

New York Marijuana Regulators Approve First Processor Licenses And Cannabis Testing Rules Ahead Of Retail Sales Launch​

New York marijuana regulators on Monday approved the first round of cannabis processor licenses, as well as additional cultivators, as the state gets closer to launching adult-use sales.
Members of the Cannabis Control Board (CCB) also gave the green light to proposed laboratory and sampling regulations and approved the hiring of a policy director, John Kagia, who has worked for the marijuana industry analytics firm New Frontier Data.

The board on Monday accepted 15 licenses for existing hemp businesses seeking to process marijuana and extract cannabinoids. This marks the first approvals for that adult-use license type in New York.

CCB also approved emergency regulations for marijuana laboratory testing standards, a move that allows regulators to “immediately open the application window” for testing facilities, CCB Chair Tremaine Wright said.
Medical cannabis testing facilities will automatically be able to start analyzing marijuana for adult-use sales under the rules. The regulations further require the establishment of a “state reference laboratory to test when needed for quality assurance matters and to assist with laboratory method development.”

These are the latest steps that regulators have taken as New York prepares to open the first recreational shops. People who were directly impacted by the drug war will get initial retail licensing priority, and CCB said last week that applications for those conditional licenses will be accepted starting on August 25.
In order to qualify for a conditional adult-use marijuana retail license, applicants must have faced a conviction for a cannabis-related offense prior to the enactment of legalization in the state, or have a direct relative with such a conviction, and they must also have experience operating a qualifying business.
The definition of a qualifying “justice-involved” individual was also expanded to include people who were arrested for marijuana but convicted for a lesser offense, which advocates view as a positive step that will broader the applicant pool.
The application will be available online at the New York State Business Express site. Prospective applicants are being encouraged to begin compiling the required documents before the portal opens this month. The application period for this license type will be open for just a month, closing on September 26.
CCB has also been approving numerous conditional cultivator applications, which are being granted to existing hemp businesses in the state. Gov. Kathy Hochul (D) signed a bill to create the conditional cultivation licenses in February.
On Monday, regulators approved 19 more cultivator licenses, for a total of 242.

With respect to retailers, Office of Cannabis Management (OCM) Executive Director Chris Alexander said last month that the OCM diligently reviewed and responded to public comments on the proposed rules for conditional retailers, but there’s still been some frustration among stakeholders who feel that the input was not thoughtfully incorporated.
For what it’s worth, a recent poll found that most New Yorkers voters are against that proposal to prioritize retail licenses for justice-involved people.
Separately, OCM also recently publicized dozens of cease and desist letters that they have sent to businesses accused of illegally selling marijuana as the state prepares to launch its adult-use market.
But there’s been skepticism about the accuracy of the office’s enforcement targets. Some businesses that were named as operating illicit marijuana shops say they never received the notice; others, including one event and catering business, say that were wrongfully targeted, denying that they’ve been involved in cannabis sales.
As it stands, adults 21 and older can possess and publicly consume cannabis, as well as gift marijuana to other adults as long as they aren’t being compensated.
In June, CCB also approved a series of proposed rules for marijuana packaging, labeling, advertising and testing requirements.
During April’s CCB meeting, regulators also approved revised regulations to allow medical marijuana patients to grow their own plants for personal use following a public comment period on initial rules that were proposed last year.
In general, the rule would allow registered patients and caregivers to grow up to six plants, only three of which could be mature. They could possess up to five pounds of cannabis derived from those plants, which is consistent with the state’s adult-use legalization law.
Meanwhile, New York lawmakers recently sent a budget proposal to the governor’s desk that includes provisions to let marijuana businesses take state tax deductions that are available to other industries despite an ongoing federal ban on cannabis. That was signed into law.
Sen. Jeremy Cooney (D) filed a standalone bill in December seeking a similar carve-out for the state’s burgeoning cannabis market. Assemblymember Donna Lupardo (D) followed suit in her chamber. Cooney also filed a bill in May to allow regulators to disclose certain information about cannabis licensees to financial institutions to promote marijuana banking.
Hochul has repeatedly emphasized her interest in efficiently implementing the legalization law.
The governor released a State of the State book in January that called for the creation of a $200 million public-private fund to specifically help promote social equity in the state’s burgeoning marijuana market.
That proposal was also cited in the governor’s executive budget, which was released in January. The budget also estimated that New York stands to generate more than $1.25 billion in marijuana tax revenue over the next six years.
Hochul said that while cannabis business licenses have yet to be approved since legalization was signed into law last year, the market stands to generate billions of dollars, and it’s important to “create opportunities for all New Yorkers, particularly those from historically marginalized communities.”
OCM has also been putting out PSAs to promote public education about the marijuana policy change, including a first-of-its-kind taxpayer-funded marijuana ad that aired in most of New York during an NBA Finals game last month. The PSA boldly addressed the racially discriminatory harms of cannabis criminalization and highlighted steps that state regulators are taking to right the wrongs of prohibition.
CCB also wants the opportunity to showcase its marijuana PSA campaign on the social media app TikTok, but it was told by the company previously that it could not use the platform because of its existing ban on the use of the word “cannabis.” The department recently sent a letter to TikTok, requesting a policy change for government marijuana-related ads that concern public education.
Here are some other ways that New York lawmakers and regulators are working to promote drug policy reform as the state prepares to implement retail marijuana sales:
Last month, Hochul announced that the state had awarded $5 million in funding to community colleges to support the development and improvement of courses and programs specifically meant to help people secure jobs in the marijuana industry.
The New York Senate approved a bill in June that would require public health insurance programs to cover medical marijuana expenses and clarify that private insurers are allowed to do the same.
Both chambers of the state legislature have passed a measure to encourage businesses to use hemp materials for packaging, construction and other industrial purposes.

The state Department of Labor separately announced in recent guidance that New York employers are no longer allowed to drug test most workers for marijuana. Even prior to the enactment of legalization, New York City officials had established a local ban on pre-employment drug testing for cannabis.
A recent legal directive from the New York City Law Department (NYCLD) has put police and firefighter drug testing policy in the spotlight after a document that was leaked from the New York Police Department (NYPD) signaled that officers would no longer be subject to pre-employment, random or scheduled screening for cannabis because of the legal analysis.
A firefighters union claimed credit for the new directive, saying that it was responsive to inquires that it made to the city.
Separately, the mayor of New York City says he’s looking into the idea of authorizing marijuana to be grown in greenhouses on the rooftops of public housing buildings—an ambitious proposal that’s unlikely to sit well with the federal government, which provides funding to support the NYC Housing Authority (NYCHA).
A New York senator filed a bill in May that would legalize what would essentially be licensed community marijuana gardens for people who aren’t able to cultivate cannabis at their own homes.
Also that month, a New York Assembly committee advanced a bill to establish a statewide safe consumption site program, allowing regulators to authorize facilities where people could use currently illicit drugs in a medically supervised environment.
Meanwhile, a New York lawmaker introduced a bill last year that would require the state to establish an institute to research the therapeutic potential of psychedelics.
Another state legislator filed legislation in December to legalize psilocybin mushrooms for medical purposes and establish facilities where the psychedelic could be grown and administered to patients.
 

David Goldsmith

All Powerful Moderator
Staff member
Mayor Adams, Department of Small Business Services Announce new Initiative to Equitably Grow Cannabis Industry in NYC
Video available at:

NEW YORK — New York City Mayor Eric Adams and New York City Department of Small Business Services (SBS) Commissioner Kevin D. Kim today announced the launch of Cannabis NYC, a first-of-its-kind initiative and suite of services to support the equitable growth of the cannabis industry in New York City — a key pillar of Mayor Adams’ Blueprint for New York City’s Economic Recovery. Housed at SBS, Cannabis NYC will support cannabis entrepreneurs and their workers as the industry develops. The initiative will work with industry stakeholders to create good jobs, successful small businesses, and sustainable economic opportunities, while also addressing the harms of cannabis prohibition. Cannabis NYC services will also include the city’s first-ever technical assistance for cannabis license applicants, as well as other business services to take entrepreneurs beyond licensing to a thriving operation.
“Today, we light up our economy and launch Cannabis NYC — a first-of-its-kind initiative to support equitable growth of the cannabis industry in New York City,” said Mayor Adams. “The regulated adult-use cannabis industry is a once-in-a-generation opportunity for our underserved communities that have, for too long, faced disproportionate rates of drug-related incarceration to get in on the industry on the ground floor. Cannabis NYC will plant the seeds for the economy of tomorrow by helping New Yorkers apply for licenses and understand how to open and successfully run a business, while simultaneously rolling equity into our economy by giving those who have been justice-involved and those with a cannabis conviction a chance to succeed. This is about creating good jobs, successful small businesses, and finally delivering equity to communities harmed by the ‘War on Drugs.’”
“Whether you’re interested in opening up a cannabis dispensary or in the many other business and employment opportunities that will soon be available, Cannabis NYC is ready to help you get to work,” said Deputy Mayor for Economic and Workforce Development Maria Torres-Springer. “With a meaningful focus on equity, Cannabis NYC will help push our city toward a robust economic recovery with new and high-paying jobs and hundreds of millions in revenue to be reinvested in those communities most harmed by the ‘War on Drugs’ and the current pandemic.”
“Cannabis NYC is ready to help New Yorkers succeed in this budding industry,” said SBS Commissioner Kim. “New York City and state will work hand-in-hand to deliver on our shared social equity goals, support the transition of legacy operators to the legal market, and turn the page on the ‘War on Drugs.’”
“For generations, communities of color across our city have experienced the compounding social and economic impacts of the ‘War on Drugs.’ The end of prohibition and the emerging New York cannabis industry opens avenues for change and prosperity,” said Mayor's Office of Equity Commissioner Sideya Sherman. “Getting started is the first step. With Cannabis NYC, New Yorkers now have a one-stop shop for navigating the licensing process, access to no-cost services, and ongoing support as the industry continues to evolve. We're excited for this new chapter and what it means for those individuals and communities most harmed.”
“New York City Economic Development Corporation is proud to work with our city and state partners to create an equitable adult-use cannabis industry in New York,” said New York City Economic Development Corporation President and CEO Andrew Kimball. “Cannabis NYC will help businesses and our local economies through job creation, while prioritizing investment in communities of color and supporting those who have been most adversely impacted by cannabis enforcement.”
Today’s announcement comes ahead of the opening of the state’s first-ever cannabis retail dispensary license application later this week and advances a key plank of Mayor Adams’ economic recovery plan, which calls for a partnership with state and local leaders to build the nation’s most equitable cannabis industry.”
“This administration is committed to putting equity at the center of the new legal cannabis market, which is why the Mayor’s Office of Criminal Justice is committed to working with our partners at SBS to educate New Yorkers along the public safety continuum on participating in the industry,” said Deanna Logan, director, Mayor’s Office of Criminal Justice. “We look forward to working in partnership with our sister agencies to remedy some of the negative impact of past cannabis policy.”
“The introduction of legal cannabis sales and consumption in New York brings in a new era of fairness and equity with welcomed economic and social opportunity for all,” said Ariel Palitz, executive director, Office of Nightlife at the Mayor’s Office of Media and Entertainment.
The first phase of Cannabis NYC will focus on ensuring that justice involved New Yorkers are able to apply for and secure retail licenses from the state. As legal cannabis businesses open their doors in the coming years, the initiative will expand to include a broad suite of business and technical support services tailored to the industry, as well as networking opportunities and efforts to establish Cannabis NYC as a global brand. The city is also exploring how to best connect cannabis entrepreneurs who may struggle to access traditional business capital with financial support.
Not only will Cannabis NYC boost the city’s economy and provide New Yorkers with new job opportunities, but it will also do so while addressing the harm done to Black and Brown communities during cannabis prohibition. The expected size of New York City’s emerging regulated adult-use cannabis will be historic, with estimates of up to $1.3 billion in sales by 2023, and between 19,000-24,000 jobs created over the next three years.
Over the next month, New York State’s Office of Cannabis Management will accept applications for Conditional Adult-Use Retail Dispensary (CAURD) licenses to be distributed to qualifying businesses owned by justice-involved individuals or their parent, legal guardian, child, spouse, or dependent. CAURD licensees will be positioned to be the first legal cannabis retailers open in the state, setting an equitable foundation for the adult-use cannabis market from the outset.
To advance the state’s ambitious equity goals and help New Yorkers interested in applying for CAURD licenses, Cannabis NYC will provide:
  • Application Support: Answer questions about CAURD application requirements, hold educational webinars, and work with license applicants to complete the application during the month-long application period from August 25, 2022 – September 26, 2022.
  • Support Beyond the License: Connect aspiring cannabis entrepreneurs to no-cost services, along with technical assistance, to support successful businesses.
  • Long-Term Industry Support: Expand programming as the industry grows to connect New Yorkers to good jobs and build strong businesses in the cannabis industry, as well as ancillary industries that do not “touch the plant.”
New Yorkers can learn more about Cannabis NYC online or by calling 888-SBS-4NYC (888-727-4692).
“I applaud Mayor Adams and his administration for establishing this initiative,” said New York State Senator Diane Savino. “Building on our work in Albany, creating the medical cannabis program, and now the birth of adult use will be complicated for many. It is vitally important that we help entrepreneurs navigate the process and stand up the legal regulated market and send the message that we will not ignore the illicit market.”
“When New York legalized marijuana, we wanted to do it right,” said New York State Senator Brad Hoylman. “The long-awaited rollout of our restorative and community justice-based cannabis licensing program will prioritize communities of color and help fund public schools. I applaud Mayor Adams and Commissioner Kim for establishing Cannabis NYC to help businesses through this exciting new process. I look forward to all marijuana sold in our state being legal and properly licensed, come from New York growers, and taxed accordingly.”
“The passage of the MRTA was a historic step toward justice and repairing the harm inflicted on communities of color by decades of inequitable drug enforcement,” said New York State Senator Jamaal Bailey. “I’m grateful that Cannabis NYC will build on the progress made at the state level by prioritizing opportunities for disproportionately impacted communities to participate in the new legal industry while taking important steps to invest in local economies, create job opportunities, and reduce barriers to access for entrepreneurs and small businesses. New Yorkers will have a critical resource in Cannabis NYC as we continue to build an equitable legal cannabis industry and level the playing field for those most impacted by the war on drugs.”
“It's great that Mayor Adams and Small Business Services Commissioner Kim are doing real ground-level work to help set up sound local businesses in the new adult-use cannabis field, especially for people who were harmed by our previous criminalization of cannabis,” said New York State Assemblymember Richard Gottfried. “This commonsense approach should be a model for other localities.”
“I’ve witnessed my family members be arrested and prosecuted for a plant my white counterparts used recreationally without repercussion,” said New York State Assemblymember Chantel Jackson. “It is time to right the wrongs of our failed drug enforcement system and create clear and easy pathways for the most negatively impacted groups to profit from cannabis. I support the mayor’s decision to launch Cannabis NYC, as a way to ensure Black and Brown groups own part of the emerging commercial cannabis industry.”
“I am proud of the progress our state continues to make in advancing our social equity agenda for legacy families that were most impacted by the marijuana prohibition,” said New York State Assemblymember Stefani Zinerman. “Earlier this year, we passed a budget that includes $50 million to support the Cannabis Management Program that assists socially and economically disadvantaged individuals with establishing retail cannabis dispensaries. It's great to have my hometown and the state's largest municipality as true partners in this work. I look forward to working with Mayor Adams and Commissioner Kim to connect local entrepreneurs and cannabis practitioners to the new Cannabis NYC program. We have an opportunity to empower the next generation of cannabis entrepreneurs to create new sources of employment on the local level and economic freedom and healing in the 56th Assembly District and throughout five boroughs. This initiative will continue supporting our city's and state's recovery from the ravages of the pandemic that makes New York City a leader in building an equitable and sustainable cannabis industry.”
“I commend Mayor Adams for not just seeing the potential economic opportunities of the cannabis industry, but also making equity an important pillar of that industry’s growth in New York City,” said Brooklyn Borough President Antonio Reynoso. “Although the disproportionate impacts of drug-related crimes we’ve experienced within our Black and Brown communities can’t be erased, Cannabis NYC will help to correct some of those generational wrongs. Whether it’s for a cannabis business or other industries, we should all be thinking of ways to bridge the inequities too many people in our communities face when starting a small business. The only way to build bigger and more sustainable communities is to provide equal opportunities to all.”
“Once underground, the cannabis industry is coming into the light, and it is important that our borough take full advantage of the social and economic benefits to our communities,” said Bronx Borough President Vanessa L. Gibson. “The legalization of cannabis is an opportunity for us to undo the damage caused by years of disproportionate mass incarceration and prosecution of Black and Hispanic New Yorkers who have suffered under unfair drug laws and policies for years. I want to thank Mayor Adams, New York City Small Business Services Commissioner Kim, and all of the advocates for prioritizing equity and justice with the creation of Cannabis NYC and I look forward to working with them in ensuring the Bronx is a part of this important initiative.”
“The blossoming cannabis industry offers significant socioeconomic potential for Queens and for New York City,” said Queens Borough President Donovan Richards Jr. “That is why my office has been active when it comes to cannabis-related outreach, and I look forward to working with all our partners to ensure the mission of the Cannabis NYC program is realized. It is critical that we build an industry rooted in fairness that prioritizes communities that have long felt the sting of inequitable marijuana enforcement. With these steps announced today, I’m confident our city is taking seriously the importance of doing just that.”
“Mayor Adams’ Cannabis NYC initiative is a step towards restorative justice as the city is investing in marginalized communities that have been disproportionately affected by punitive marijuana laws,” said New York City Councilmember Julie Menin, chair, Committee on Small Business. “These services in New York City provide opportunities in an upcoming industry by taking an equitable approach that uplifts individuals and the families of those who have been affected by former marijuana convictions.”
“Not only will Cannabis NYC boost the city’s economy and provide New Yorkers with new job opportunities, but it will do so while addressing the harm done to Black and Brown communities during cannabis prohibition,” said New York City Councilmember Amanda Farías, chair, Committee on Economic Development. “The expected size of New York City’s emerging regulated adult-use cannabis will be historic and will not only directly help our city continue to equitably recover, but also help ensure we have a way to secure the future of our economy — both in revenue and jobs. This initiative is personal to my district of the Bronx and I thank Mayor Adams for his attention to those who have been most affected by the past criminality of cannabis in this city and across the country. Cannabis NYC is community forward and centers the needs of communities like mine. Thank you Mayor Eric Adams and Commissioner Kim, I look forward to working together to continue to build the nation’s most equitable cannabis industry right here in New York City for the people of New York City.”
“I applaud Mayor Adams and Commissioner Kim for committing resources that will ensure equity and stability in the emerging cannabis market,” said New York City Councilmember Gale Brewer. “The Cannabis NYC Initiative will support entrepreneurs as they navigate the complexities of an evolving industry that could generate over $1 billion in sales by 2023. This is a unique opportunity to create good paying jobs and bolster our economy.”
“Our city and state are on the frontier of the cannabis industry and a major aspect of that is supporting hiring and entrepreneurship efforts,” said New York City Councilmember Kamillah Hanks. “This new initiative will get the ball rolling on ensuring and promoting equity in this blooming industry in New York. Cannabis NYC will work to right the wrongs for so many community members who have fallen victim to the war on drugs while assisting and encouraging a robust new arm of our city’s economic recovery.”
“The state’s legalization of cannabis is a tremendous opportunity for New Yorkers,” said New York City Councilmember Marjorie Velázquez. “As such, we must ensure our business owners are well equipped with the necessary tools to operate their businesses legally and that our community’s concerns are addressed in the process. The Cannabis NYC initiative will also allow more equitable and attainable opportunities for entrepreneurs and business owners who have been impacted by the Justice system, closing the gap on the disparities faced. I commend the mayor and his administration on this initiative and look forward to working together.”
“The Bronx Cannabis Hub was created to provide New Yorkers most impacted by cannabis prohibition with vetted and reliable cannabis services and education, said Cristina Buccola, co-founder, The Bronx Cannabis Hub. “We look forward to working with Mayor Adams, SBS, and Cannabis NYC across our incredible city to deliver on the equity goals of New York’s cannabis program.”
“Building an equitable industry in New York City is no small feat and we are proud to stand in support of Mayor Adams and the Cannabis NYC initiative as it provides tangible resources for those seeking to enter the cannabis industry but have been historically turned away due to lack of access,” said Kaliko Castille, board president, Minority Cannabis Business Association.
“As New York’s adult-use cannabis industry kicks into gear, it is crucial we have partners on the local level who share our goal of ensuring that this industry is one that is equitable in opportunities for both ownership and good, union jobs,” said John R. Durso, president, Local 338 RWDSU/UFCW. “Mayor Adams’ Cannabis NYC initiative is just that — by supporting workers and entrepreneurs alike, we are making sure that this new and emerging industry is one that will help everyone succeed.”
“The adult-use cannabis industry will be one of the largest generators of wealth in New York at least for the next two decades — and we must ensure that the marketplace provides room for diversity, equity, and inclusion,” said Jeffrey Garcia, co-founder, Latino Cannabis Association. “Thank you to Mayor Adams and SBS Commissioner Kim for implementing the Cannabis NYC initiative to help our communities, which have suffered far too long from the impacts of prohibition, to now benefit from legalization.”
“New York City waits for no one, and Mayor Adams and Commissioner Kim have taken cannabis by its root, stem, and leaf,” said Bertha Lewis, founder and president, The Black Institute. “Through education, technical assistance and legal oversight they are leading the nation in ensuring that ‘social equity’ is real and working. Cannabis is an industry and not just a nickel bag. New York state could have no better partners than this dynamic duo. This announcement today codifies the New York City commitment to lead and be a model for the nation.”
“The Harlem Business Alliance is dedicated to black economic empowerment,” said Regina Smith, executive director, Harlem Business Alliance. “As one of the Black communities most harmed by the federal war on drugs and the state’s Rockefeller laws, we strongly believe that our people must benefit economically from the legalization of the billion-dollar marijuana industry. Without tremendous resources from the city and state — especially startup capital and intensive culturally-competent, community-based, business development services — this will not happen. HBA is eager to work closely with the Adams administration to ensure that thousands of successful thriving businesses are grown to support the financial backbone of the Black community.”
 

David Goldsmith

All Powerful Moderator
Staff member

N.Y. Medical Marijuana Giants Struggle to Break Into Recreational Market​

Large operators want in on the state’s new retail industry. A potential multimillion-dollar fee stands in the way.
When New York State awarded the first of 10 licenses to grow and sell medical marijuana in 2015, the winning bidders rejoiced at the opportunity to control a lucrative, untapped market — but they knew that greater spoils lay ahead.
If New York were to legalize recreational cannabis, the medical marijuana companies would be well positioned to dominate the market, much as they have in states like Illinois and Arizona.
But New York took a different approach, promising to put those who had been harmed by the war on drugs first in line for retail licenses, with the application process opening Thursday.

That approach has left the 10 medical marijuana licensees and those companies with an interest in their business — nearly all of which are large, multistate operators — scrambling. Some have donated to Gov. Kathy Hochul’s campaign, and nearly all have hired lobbyists, spending more than $2 million this year in the hopes that they can make the best of what some have projected to be a $6 billion market.

The focus of their campaign is a fee, required by the state’s cannabis law, that operators must pay in order to sell marijuana outside the medical program. Early discussions have touched on a potential fee of $20 million per operator; unsurprisingly, the medical marijuana industry wants to lower that figure.
“It needs to be grounded in the economic realities of the market,” said Ngiste Abebe, president of the New York Medical Cannabis Industry Association and an executive at Columbia Care, one of the medical operators in New York. While operators were “excited” to support social equity, she said she “would love to see the economic analysis that justifies $20 million.”

The decision to give preference to members of communities that have been affected by the nation’s antidrug laws shook players in New York’s struggling medical marijuana industry, many of whom were banking on the profits they would earn in the recreational space.

In the lead-up to the passage of the 2021 cannabis law, the industry lobbied the state hard to give it first shot at recreational sales, arguing that, as established operators, they were best positioned to quickly capture and convert the illicit market.

One industry-funded report even went so far as to project significant tax losses for the state if medical operators were held back.

But lawmakers held firm, insisting that social equity candidates — defined as women, minorities, distressed farmers, veterans and those affected by the war on drugs — should be given a real chance to prosper.

The industry won a key provision, however: In exchange for a fee, each of the 10 medical operators would be allowed to open three recreational dispensaries, making them the only vertically integrated players in New York’s marketplace. The fee would then be used to seed the businesses of social equity candidates.

But New York’s cannabis law doesn’t say anything about how much the fee should be or when it should be set. And while officials have begun to release regulations focusing on other aspects of the emerging industry, the license fee remains largely a mystery.
The regulatory uncertainty is already taking a toll: The cannabis company Ascend Wellness recently announced it would abandon plans to acquire MedMen’s New York medical marijuana operations.

Medical companies are not without leverage in this fight, however: The state will need their weed to help fill the shelves of the first social equity shops.
While the state has licensed more than 200 hemp farmers to cultivate marijuana outdoors and in greenhouses, there are limits to the quantity and type of product that can be produced in that way.

If retail shops open without sufficient supply, some worry it could turn users off from the legal market for good — an existential threat. “We definitely need the supply coming from the R.O.s,” said Chris Alexander, the executive director of the state’s Office of Cannabis Management, referring to the 10 “registered organizations” that are licensed to distribute medical marijuana in New York.

Medical operators are more than happy to sell off some their wholesale product to the new retail shops in order to head off this problem. But any sale would be contingent on the setting of that special fee — an act that would signal an end to this rare period in which New York’s legal cannabis market is dominated by small entrepreneurs.
Mr. Alexander said that while regulators were “sensitive” to operators’ perspectives, the ultimate decision on the fee would largely be based on the needs of the social equity program.
“The only real guidance we have is the requirement that it’s a sufficient amount to fund the equity program, or at least the upfront needs,” he said. “So that’s kind of the guiding factor.”

He added that the medical operators’ entry into the recreational market would likely be conditioned on assurances that they continue to prioritize medical patients, perhaps by reserving a certain quantity or ratio of product for them.
Operators and patients have long complained of draconian regulations and taxes, which have made medical marijuana less accessible and more expensive than illicit market offerings. And while some of those restrictions have been loosened in recent years, New York’s operation has never seen the success of medical programs like Florida’s, which boasts 600,000 patients and growing (New York’s patient count is 124,000 and falling).
At the same time, the illicit market is thriving in New York, some of it in plain sight.
“The state needs to roll out a cannabis program that sets up its licensees, including the R.O.s, to meaningfully compete with the illicit market,” Ms. Abebe said.

“They need to set up an attractive marketplace,” she added. “To date, we haven’t seen that understanding or commitment.”

To account for these challenges, operators are pushing for a structure that would tie a part of the fee to the success of their businesses, so that the state would share in the industry’s profits. They are also hoping to pay over a matter of years, as opposed to upfront, to allow the market to stabilize. One such proposal would amount to roughly $3 million per operator, all told.
The question is not if the fee issue will be resolved, but when. And time is ticking: The fee will need to go through the full regulatory process and be approved by the state’s Cannabis Control Board, with enough time to raise and process a crop to meet demand.
“It is a lot of moving pieces,” Mr. Alexander said of the timeline. “I feel like sometimes I’m the bear at the circus with the plates.”
 

David Goldsmith

All Powerful Moderator
Staff member

Puff, puff, lease: Illegal cannabis retailers popping up like weeds​

Do marijuana sellers put commercial landlords at risk?​

Shlomi Bagdadi had to figure out what to do about all the pot.
The founder of Tri State Commercial Realty was inundated with calls this summer from smoke shop operators looking to lease retail space in the buildings he represents.

Smoke shops are a classic genre of the New York corner store, shoebox spaces where you can buy a soda, a bag of chips and a bong all in one place.

But in just a few months, they’ve become some of retail’s biggest space takers after adding a lucrative new item to the menu: cannabis.
While the state sputters toward opening its first legal dispensaries, smoke shops have become some of the most popular — if illegal — tenants in town.
Bagdadi called an executive meeting to figure out how to handle the new demand, because while customers clearly value a convenient place to buy cannabis, landlords aren’t so enthused. Some worry about unpleasant odor or customers; others fear legal issues.

It has become an open secret in New York that smoke shops often sell cannabis under the table. The sales represent an all-cash revenue stream with millions of potential customers; a third of city residents reported using cannabis in a city survey.
Lease requests are pouring in, not only from experienced operators and stores looking to expand, but also first-timers who sense a money-making opportunity.

But as the state’s regulations continue to change, even lawyers are not certain whether landlords are safe in renting to bona fide dispensaries, let alone the clearly illegal ones.
“There’s a lot of gray area right now,” said Michael Robotti, an attorney for Ballard Spahr and part of the team that prosecuted Mexican druglord Joaquín “El Chapo” Guzmán Loera.

But to many commercial landlords and retailers, that’s a risk worth taking. Hungry for deals after the Covid downturn, cannabis has New Yorkers seeing green in more ways than one.
Lease now, ask later
Smoke shops operate in a gray market. While selling cannabis without a license is illegal, enforcement of that particular rule all but stopped when the state legalized cannabis for recreational use last March.

Yet cannabis is still illegal at the federal level, making it difficult for operators to get traditional bank financing.
Meanwhile, New York’s dispensary rollout, and indeed its entire legalization process, has been sluggish from the start. Dispensaries cannot operate without a product to sell, so establishing regulations and licensing for cannabis cultivators and wholesalers came first. Each step has been slow, with lengthy weigh-in periods from the public and the state’s Office of Cannabis Management.

As customers wait for dispensaries to open, smoke shops are filling the demand.
It’s hard to know just how many smoke shops there are. They’re a distinct subspecies of the New York corner store — a close relative of bodegas, delis, convenience stores, newsstands, gas stations, groceries and grills. But state and city registration forms don’t include a checkbox for the type of store that sells gas mask bongs.

Take the state’s active tobacco retailers map: While it includes smoke shops, it also counts delis, groceries, convenience stores and hundreds of shapeshifting “stands” and “others.”
Some 5,476 shops are licensed to sell tobacco in the five boroughs, according to state data. That number falls to around 1,700 after filtering out delis and supermarkets. While pinpointing the exact definition is hard, as a Supreme Court justice once said of pornography, you know it when you see it.

As New York rolls out its cannabis dispensary program, unlicensed sellers have turned neighborhood smoke shops into 24-hour dispensaries. Their musk is so strong that even Mayor Eric Adams has taken note.

“The No. 1 thing I smell right now is pot,” Adams said at a recent press conference, discussing an uptick in 311 complaints about the odor.

The trend began in the early days of the pandemic, according to David Abrams, founder of commercial broker masonre. With desk workers staying home, two types of businesses were still looking to lease: Quick-service restaurants and smoke shops.
“They were calling on everything,” Abrams said. While institutional landlords sat and waited for rents to come back to normal, fast dining and smoke shops snatched up the smaller types of storefronts that rent for $10,000 to $20,000 per month.

The cannabis gray market started small, but two years on, the steady cash has some thinking bigger. Bagdadi says he recently got a call from a smoke shop operator asking to lease one of his clients’ retail spaces near Madison Square Garden. The storefront typically rents for almost $1 million a year.
“How are they going to afford that?” Bagdadi thought. “Like, what are they selling? Jewelry, diamonds?”

The smoke shops that sell cannabis are capitalizing on the state’s slow rollout of its dispensary program: Bureaucrats are sifting through applications for dispensary licenses and no storefronts for legal shops have been leased, so illegal ones are filling the void.
“Bottom line, it’s ‘Get the real estate, and hope in the next little bit it will be legal,’” Abrams said.

Liability in question
It remains unclear what liability landlords face for renting to smoke shops that illegally sell cannabis.
“This is just another thing that owners have to be cognizant of when they’re entering into leases,” said Alexander Lycoyannis, an attorney at Rosenberg & Estis who has written about leasing to cannabis retailers. “If the lessee is selling, the lessee is liable, and the building owner is also liable.”

The city has largely declined to go after illegal cannabis sellers. The lax enforcement could end once the legal shops are up and running, which could render shop owners and their landlords vulnerable.
Last week, a pair of lawmakers wrote a letter asking the Police Department to crack down on stores selling cannabis without a license. Pressure will only intensify as legal dispensaries open and the illicit ones begin to cost the state tax revenue.

“There’s going to be a real incentive for the state to try and stamp out the illegal marketplace, and I would expect that you would start to see enforcement up and running again,” said Robotti. “I do think there is a risk of criminal exposure going forward.”
 

David Goldsmith

All Powerful Moderator
Staff member
While something definitely needed to be done, I'm not a fan of how the Office of Cannabis Management is handling things. This will end badly. I think we are at "badly" already with the entire cannabis situation in NYC.

These Are New York’s First Recreational Marijuana Retailers​

Cannabis regulators in New York State have said they hope to have the first retail locations for recreational marijuana in operation by the end of the year.

New York took a significant step on Monday toward launching a legal market for recreational cannabis by approving 36 businesses and nonprofits for licenses to operate the first retail dispensaries in the state.
The state Cannabis Control Board voted on Monday to award the licenses to 28 entrepreneurs and eight nonprofits, closing a seed-to-sale supply chain that is expected to allow legal sales to begin in the state despite a legal challenge to the licensing program. Regulators also released 282 pages of draft regulations laying the foundation for the broader market.
State officials awarded licenses to recipients chosen from a pool of 903 applicants who were mostly people previously convicted of cannabis-related offenses or their close relatives, as well as a few nonprofits that serve people with histories of arrest or incarceration.
The licensing effort was designed to help the state meet its goal of prioritizing people in communities that were heavily targeted during the war on drugs for opportunities in the legal cannabis industry. Like the rest of the country, marijuana prohibition in New York mostly swept Black and Latino residents into the criminal justice system despite similar levels of use across all races.

Tremaine Wright, the chairwoman of the board, called the vote on Monday “a monumental moment.”
“Not long ago, the idea of New York legalizing cannabis seemed unbelievable,” she said. “Now, not only have we legalized, but we’re also building a legal adult-use market with an equity-driven approach.”
The Office of Cannabis Management, which develops regulations under the control board’s supervision, said most of the licenses went to people in New York City and on Long Island. Freeman Klopott, the agency’s spokesman, said 19 of the 28 licenses granted to individuals were awarded to people who belong to racial and ethnic minority groups, while 20 of the recipients were from areas with some of the lowest median household incomes in the country.

Naiomy Guerrero, 31, an art historian, saw one of her older brothers, Hector get arrested a handful of times for possession of marijuana during the era of Stop, Question and Frisk. The program under Mayor Michael Bloomberg saw police conduct millions of unjustified pedestrian stops and searches in predominantly Black and Latino neighborhoods like Morris Heights in the Bronx, where the Guerrero siblings grew up, before it was declared unconstitutional in 2013.
The siblings, who identify as Black Latinos, and their father were awarded a license on Monday and expect to open dispensaries in the Bronx.

“To do this for my family, to move this forward, is my life’s work,” she said. “If the true goal of cannabis in New York is to be equitable, then who better than us? Because we’ve suffered at the hands of the war on drugs. We come from the most policed neighborhoods in the Bronx.”

Those who received licenses will be required to submit additional information about their finances and business partners before their licenses are finalized. They will then be allowed to begin deliveries from locations of their choice, a shift announced on Monday that regulators said would allow operators to “generate capital and scale their operations.”

But the move suggests that the state may be struggling to provide the license holders with storefronts and loans as planned. The retail license were always meant to include a delivery option, said Jeffrey Gordon, spokesman for the state Dormitory Authority, the agency leading the leasing and design process for the storefronts. “Going forward, with a delivery model in place, we’ll be able to continue finalizing leases and financing without delaying sales,” he said.

The license holders will be jumping into a market already saturated with unlicensed sellers, including a collection of recently established storefronts throughout the state.

Axel Bernabe, chief of staff and senior policy director of the Office of Cannabis Management, said earlier this month that the first round of candidates recommended for licenses would represent the “top class” of applicants.
Once approved, state regulators would “be assisting them as much as possible to find an office, open a dispensary and start essentially dispensing the estimated 200,000 pounds of product and several hundred product lines that we are seeing coming out of conditional growers and processors,” Mr. Bernabe said on Nov. 3 at the Business of Cannabis conference.
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The draft regulations lay out fees and timelines for several other license types, including for cooperatives and more retail, as well as conditions for the state’s medical cannabis providers to enter the recreational market. The public will have 60 days to comment.

Companies that are already part of the state’s medical cannabis program would need to pay $5 million to access the retail market through wholesaling. Those that want to sell directly to the general public will need to pay at least $3 million and wait three years.
The New York Medical Cannabis Industry Association said the draft regulations raised “a number of serious concerns” and vowed to push for changes.
Guidelines governing delivery services and on-site consumption that were highly anticipated were not included, and regulators said they would become available at a later date.
New York legalized cannabis for adult recreational use last year in March, allowing for possession of up to three ounces of weed or 24 grams of concentrate for personal use. Officials have said that retail sales will begin before the end of 2022.

Licenses went to at least three New York City-based nonprofits: Housing Works, The Doe Fund and LIFE Camp.
LIFE Camp, a nonprofit founded by Erica Ford in 2002 to help reduce violence and arrests in Southeast Queens, is believed to be the first Black woman-led nonprofit to receive a license.

Ms. Ford said the vast majority of her workers, who run the gamut from marketers to violent conflict mediators, had negative experiences associated with decades of prohibition of marijuana, including having been arrested or subjected to violence. Being considered for a license, she said, gives her hope “that working together, we can make some real transformation.”

“And we want to hold the cannabis board and all of those involved in this industry to the ground of honesty,” she said.
The first wave of applicants were vying for a total of 175 licenses, which allow operators to open up to three dispensaries. A vast majority, 150, are supposed to go to businesses that the state plans to provide with turnkey locations — properties to be rented — and loans covering the cost of preparing the storefronts. The remaining 25 licenses are reserved for nonprofits.
Among those to receive a license at the meeting on Monday was Matthew Robinson, 36, a Black man and construction company owner who was arrested in 2005 in Albany with two bags of marijuana by police officers who mistook him for a suspect in a fight at a local mall. Also present was Nicholas Koury, 33, a gym owner who is of Lebanese descent, and who was arrested in 2017 after the police found four pounds of weed in his car in the Bronx.

Housing Works, a nonprofit that serves people who are homeless and living with H.I.V. and AIDS, said in a statement that the organization was “honored” to receive a license, adding that having one would help support their mission.

New York is the first state to explicitly reserve licenses for nonprofits, and it is unclear how that might affect the groups’ federal tax status since cannabis remains illegal at the federal level.

Another nonprofit approved on Monday was the Center for Community Alternatives, a Syracuse-based organization that provides alternatives to incarceration for people who have been arrested and re-entry services for people returning to society from jail and prison throughout the state.
David Condliffe, the executive director, said that granting dispensary licenses to nonprofits like his had a benefit for public safety. “The programs we provide make communities safer,” he said. “And this becomes a way that those programs can be funded without leaning on the taxpayer. It’s really important and it will enhance public safety.”

The state is temporarily blocked from issuing 63 of the licenses allocated for five regions, including Brooklyn, because of an injunction in a federal lawsuit filed by a Michigan-based company challenging eligibility requirements. The plaintiff, Variscite NY One, argues that the criteria requiring applicants to have strong ties to New York, such as a residence or headquarters, and to have a marijuana-related conviction in the state, violate constitutional protections on interstate commerce.
Regulators said they had been prepared to issue 18 licenses in the regions covered by the injunction, which include Albany, Brooklyn and Buffalo.
The state has not said whether it plans to appeal the decision.
 
These stores are really making my neighborhood less attractive, they make a bodega or a tobacco shop look positively romantic. I would love to see a rule that requires some small percentage of a shop to be non-smoking or drug related. Add some snacks for your customers to eat, or newspapers, or covid masks or flowers or anything that can connect it to the non-pot people in the neighborhood. Even a few racks of chewing gum or stationary.
 
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