NY Cannabis: Sales won’t start until 2023 due to regulatory uncertainties

By Nicolas Jose Rodriguez

Shortly after former New York Governor Andrew Cuomo, who Marijuana Regulation & Tax Act (MRTA) Legalization of cannabis for adults on March 31, 2021, the legislature passed the Cannabis Management Office (OCM) regulated by a Cannabis Control Board (CCB) to monitor and implement the law.

After six months of inactivity (and the resignation of Governor Cuomo), the MRTA was finally signed on September 1 under the new governor of the state Kathy Hochul who duly appointed a chairman for the NY Cannabis Control Committee (CCB) and a Managing Director of the Cannabis Management Bureau (OCM).

Photo by Michael M. Santiago / Getty Images

Seemingly all the best for the industry, adult cannabis sales are far from a reality.

New chiefs in the city

After the State Senate approved Gov Hochul’s candidate for chairmanship of the CCB, the former was a member of the Brooklyn Congregation Tremaine Wright, as well as her nomination as managing director of the OCM, Christopher Alexander, the hope was that the The long-awaited legal cannabis industry, which is on its way to becoming one of the largest in the country, would finally get going.

Patience is a virtue.

Adult cannabis sales are unlikely to start until the first half of 2023 at the earliest, predicts Cantor Fitzerald’s Pablo Zuanic.

RELATED: New York Senate Approves Nominees to Get Marijuana Legalization Back On Track

Several questions “remain in the air”, such as the possible legal challenges for the proposed hybrid “two-tier” system and whether there will be cultivation restrictions from municipalities and counties that only allow one multi-state operator (MSO) to open a cannabis store in the cities.

According to Zuanic, “the lack of liquidity and the lack of banking reform are likely to continue to limit institutional investor participation in MSOs, regardless of banking policy.”

With the MSOs ETFs Down 19% in the past three months (S & P500 + 7%), and federal action on the Cannabis Administration Opportunity Act (CAOA) is unlikely by mid-2022, “Zuanic said that for now,” the federal news is likely “to be the main catalyst the group.”

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Key questions for the near future

To date, it is not clear how many retail licenses will be issued and whether there will be a cap on the number of stores allowed and how these issues will of course affect the current pharmacy economy. The question also arises of whether pharmacies are allowed to sell cannabis flowers and whether a home delivery service is allowed.

Cultivation: It is also not clear whether there will be a limitation on cultivation and, if so, how the capacities can be expanded.

Another important set of questions concerns access to industry and market participation, such as priority in the licensing process. And Zuanic pointed out that one wondering what the cost of the cannabis business in New York will be.

RELATED: Will New York Governor Kathy Hochul Move Legal Cannabis? She says yes

According to current rules With respect to medical marijuana, those with newly issued cultivation / production licenses are not allowed to hold distribution / retail licenses. The incumbent medical licensees will, however may have both retail and production licensesZuanic warns about “a sticking point that could lead to lawsuits and delay the start of the program”.

This article originally appeared on Benzinga and was republished with permission.