ALBANY — New York’s first marijuana retailers could open their doors later this year, with licenses initially reserved for merchants who have been arrested on marijuana offenses, or who are closely related to people who have.
The state announced the decision Thursday, along with a plan to license hemp farmers to grow marijuana for recreational use starting this season. Applications for cultivation licenses can be submitted starting March 15.
Gov. Kathy Hochul said the details of the farm-to-retail Seeding Opportunity Initiative are unique among states that have legalized marijuana sales for non-medical use.
“The regulations advanced by the Cannabis Control Board today will prioritize local farmers and entrepreneurs, creating jobs and opportunity for communities that have been left out and left behind,” she said in a prepared statement.
Farmers who receive an Adult Use Conditional Cultivator License will need to follow quality assurance, health and safety requirements developed by the Office of Cannabis Management.
They must also take part in sustainability and equity mentorship programs to help build the equity-based model the state is pursuing in its new recreational cannabis industry. That model is rooted in the premise that disadvantaged communities suffered disproportionately in the war on drugs and should now benefit — gain equity — from the legalization of marijuana sales.
A key part of the requirement for the first round of retail licenses is that applicants must have a marijuana-related conviction in New York state prior to March 1, 2021, or have a parent, spouse, child or dependent with such a conviction. They must also have experience operating a small business in New York state. There is no racial or ethnic requirement, but a significant percentage of New Yorkers charged with marijuana possession in decades past have been Black or Hispanic.
Regulations would also allow retail licenses for nonprofits that could show sufficient involvement in the restorative justice effort the state is promoting.
Still up in the air amid 2022-2023 budget negotiations between Hochul and the Legislature is the governor’s proposed Social Equity Cannabis Investment Program.
It calls for $200 million in industry licensing fees and private equity to be used to reduce barriers that might prevent equity entrepreneurs from opening recreational marijuana dispensaries. The state Dormitory Authority would use its leasing and construction services to site dispensaries at prime locations and renovate them to meet regulations.
Chris Alexander, executive director of the state Office of Cannabis Management, held a news conference Thursday after the Cannabis Control Board meeting to provide more specifics on the plan to give convicted marijuana offenders priority for the first retail licenses:
- The rules for retail licenses will go through a 60-day comment period before being codified, but it’s anticipated the process will move quickly enough that the first tranche of licenses can be issued and the first dispensaries can open late this year.
- Conviction on other drug charges, such as narcotics sale, might disqualify a prospective marijuana dispensary operator who meets most other qualifications, because there are standards of good conduct in the requirements.
- There shouldn’t be a shortage of people with both marijuana convictions and small-business experience, because there were almost 1 million marijuana arrests in New York over the decades.
- The state Marijuana Regulation and Taxation Act of 2021 set a goal of equity entrepreneurs receiving 50% of all licenses; this first round that is 100% set-asides is a very small portion of the anticipated total. (Published estimates predict 100 to 200 licenses in the first round.)
- Companies that already operate medical marijuana facilities in New York will be included in the new recreational market, they just won’t be part of the first round. (“Equity will lead, and those who have been most impacted will go first.”)
- Roughly 150 to 200 hemp farmers are expected to apply for licenses to grow marijuana.
Asked about the idea of former Mexican drug lord Joaquin “El Chapo” Guzman applying for a New York marijuana license — current life prison sentence notwithstanding — Alexander said that’s not an accurate representation of the multitudes of convicted New York marijuana offenders.
He said 90% were convicted of violation-level offenses, possession of a small baggie of weed or a single joint, perhaps discovered during one of the innumerable stop-and-frisk encounters between police and people of color in New York City.
Without invoking the image of El Chapo, critics such as Assemblyman Chris Tague, R-Schoharie, say the first round of retail licenses should not be reserved for those with criminal convictions. Nor, he said, should they get part of the proposed $200 million seed fund.
“We have always heard since we were kids crime doesn’t pay,” Tague said in a news release Thursday. “Well that has all changed today, and now in New York it does.”
He wants the money to instead go to distressed farmers, as was discussed during legislative negotiations that cleared the way for the state’s nascent recreational marijuana marketplace.
“Our farmers are in a tougher position than ever, and it’s despicable that the promise made to them by our state’s Democratic leadership has been torn apart for the sake of helping people who broke our laws and inflicted real harm on rural and urban communities alike,” Tague said.