It is safe to say that the New York cannabis market has been embroiled in controversy since the passage of the Marihuana Regulation and Taxation Act (the “Act”) on March 31, 2021. The Act was supposed to provide the framework for a blossoming legal cannabis industry in New York, but obstacles have been encountered at every turn.

Following the passage of the Act, the Office of Cannabis Management (OCM) established the Conditional Adult-Use Retail Dispensary (CAURD) program, allowing justice-involved individuals to be the first entrants into the New York adult-use cannabis market. At the end of 2022, Governor Hochul announced her bold ambitions for the state to help open 20 CAURD dispensaries per month throughout 2023. Here we are in Q4 of 2023, though, and—by our count—New York is about 180 dispensaries short of this goal. While there are over 1,000 illegal dispensaries (yes, really!) throughout the state, there are less than 20 legal, regulated dispensaries. 

How do you open a business? For one, you need money. In the case of CAURD licensees, they were supposed to receive assistance through the $200 million Social Equity Cannabis Investment Fund (the “Fund”), which was to provide “turn-key” dispensaries that the licensees would pay off over time. The only problem was that the Fund didn’t receive any private capital commitments until June 30, 2023. This left CAURD licensees with little support in finding real estate and building out their facilities. These obstacles and delays have led to trouble for cultivators as well because they have grown thousands of pounds of excess weed that they are now unable to sell. Then, in August 2023, an injunction was granted in the matter of Fiore v. New York State Cannabis Control Board, et al., prohibiting the OCM from processing, approving, or investigating pending applications for CAURD—in other words, preventing any new CAURD dispensaries to open.

So wait—I thought you said legal dispensaries are coming to New York?

Ok, so here is the scoop: On September 12, 2023, New York’s Cannabis Control Board announced new adult-use cannabis regulations, which provide that the general public may begin applying for adult-use cannabis licenses on October 4, 2023. The regulations also provide that registered organizations will be able to enter the adult-use marketplace, two years earlier than the MRTA initially contemplated. 

We expect the new regulations to provide considerable momentum throughout the New York cannabis industry by simultaneously allowing new cannabis operators to enter the market, while also providing some tacit encouragement to reach a resolution to the litigation. It is for these reasons that we see renewed excitement in the New York cannabis industry for the rest of the year and beyond.

Ice Miller’s national cannabis practice is here and ready to assist your team in making a smooth entrance to the New York cannabis market! Give our team a shout to learn more. 

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.