Is New York giving false hope to the marijuana industry?
When New York State voted for full-fledged recreational weed in 2021, the industry bubbled over the market's prospects. They have carefully devised a plan to convert existing medical pharmacies into recreational pharmacies, assuming they jump through the air and spend hundreds of thousands. Given the existing population and a large tourist population, people were willing to invest. At the last minute, New York changed everything and today there are 23 legal operators and over 1,500 unlicensed dispensaries in New York making hundreds of millions every month. And pay no state or city taxes.
Is New York giving marijuana industry another false hope as the state Supreme Court intervenes?
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New York City has proven unable to shut down unlicensed pharmacies. They have recently turned to a unique solution by issuing fines or imposing temporary closures at the rate of one to two cases per week. Instead of focusing on expanding legal retailers, they have implemented a policy that penalizes landlords with hefty fines if they allow unlicensed dispensaries in their buildings. It doesn't matter whether the landlord knows the true nature of the deal in advance. And now things have become even more chaotic.
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A New York judge approved the settlement of a lawsuit brought by a group of service-disabled veterans. The court granted the group a provisional license, paving the way for more than 400 provisional licensees to open marijuana dispensaries. The new entrepreneurs would have to compete with existing retailers. Veteran stores can finally open after a painful and expensive wait. Most likely, they will miss the cash-rich Christmas season.
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By granting new licenses to this group, the state must now focus on relieving delinquent provisional licensees as directed by the court. New applicants have to wait even longer for admission. It appears that April is the current target for net licensing, and it is drawing criticism.
A representative of the New York Cannabis Retail Association told a media outlet that 30 members of his association were on the verge of bankruptcy and could not wait until April. The 1,500 pharmacies are stocked with an estimated $500 million worth of products. It appears that some of this comes from the illegal market, which only increases revenue for the black market.
It quickly became apparent that there was a lot of demand in the market, but New York will still have a long way to go to resolve the mess it has created and acclimate consumers to new purchasing habits.