What’s next for the introduction of legal cannabis in New York in 2023?
A week after the state landed its first cannabis sale, the next steps in New York’s legal cannabis adoption are still up in the air.
Last week, regulators and consumers cajoled the birth of the long-awaited adult market. Thousands waited in line to join the historic leap forward, just in time for the New Year. But the Hempire State’s new billion-dollar baby now faces major growing pains through 2023.
The legislature has delivered on most of its promises, including burning social justice into the DNA of the state’s adult-use program. But there’s still work to be done if New York really wants to redefine how states approach legalization from a legislative and regulatory perspective.
Here are the many steps ahead of New York’s new legal cannabis market in 2023, from providing supplies to settling a federal lawsuit from a disgruntled dispensary claimant.
High prices, but many alternatives
Shoppers lined the block to shop at Housing Works on Day One and during peak hours during the week. But some customers are already complaining about high prices.
Carts sold at Housing Works for astronomical prices on day one (over $50 for 0.5 gram carts and about $100 for 1 gram carts). Sure, the flower is fairly priced ($40 to $60 per 3.5 grams), but options are limited. And no one feels comfortable paying $30-$35 for edibles or $18-$50 for pre-rolls.
With those prices, Housing Works should be on track to meet its first-year revenue goal of $1 million. Luckily, while the adult market develops and prices normalize, there are medicinal, gray, and native options.
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Ultimately, pricing is shaped by regulatory constraints that prohibit undue influence by highly leveraged multinational operators. Regulations that limit interference by incumbents aim to give consumers the power to choose which brands are successful.
Last week, Senator Liz Kruger said that Leafly lawmakers were investigating how California and other markets lost ground to the illicit market. Sen. Kruger and members of the state’s Cannabis Committee said on the first day of sales that they intend to learn from other states’ mistakes. Accessible prices will be an important part of New York’s fight to lure buyers away from unlicensed establishments, some with contaminated meat while others offer premium West Coast quality with no local taxes.
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First legal deliveries and more legal storefronts
First, the state must bring delivery services online through exclusive third-party partner Dutchie. So far, none of the 63 licensees have been allowed to start delivery sales.
Next, New York must build dozens of brick-and-mortar businesses to join Housing Works, currently the only licensed adult dispensary open for business in the state. The housing authority (DASNY) is responsible for the process, but the bureau still hasn’t met the December 30, 2022 deadline to release a report on its efforts to raise $200 million for the state’s new dispensaries.
Social justice and public comment
In addition, there are regulatory hurdles and deadlines that the state is facing in the coming weeks. The state is currently trawling through “hundreds of pages of notes” to produce a social and economic justice plan that was due January 1, 2023 under the Marijuana Regulation and Taxation Act (MRTA). The MRTA legalized cannabis in New York in March 2021, laying a clear foundation for how and when regulators need to get things rolling. The proposed final regulations were published in late 2022 and are open to public comment before finalization.
New York’s Office of Cannabis Management (OCM) told Syracuse.com it is analyzing data to identify locations “of more than 1.2 million arrests to analyze communities disproportionately affected by the drug war,” it said Klopott, and the agency will file the overdue report on its social justice-related activities by the end of this week. An OCM spokesman said the full social justice plan will be released in the first quarter of 2023.
Lawsuit blocking New York pharmacy approvals
An active federal lawsuit continues to block the issuance of 63 pharmacy licenses in Brooklyn and four other regions of the state. OCM officials have expressed confidence that the injunction currently preventing the state from issuing conditional issuance licenses for adult use will be resolved in the coming months. The plaintiff told Leafly that it was not their intention to “manage” the licensing process for other operators. Until the lawsuit is resolved, cannabis buyers and potential dispensary owners in affected areas (Brooklyn, Finger Lakes, Central NY, Western NY and Mid-Hudson) will have to wait for dispensaries to open.
Leafly spoke to Alex Norman, a concerned applicant, who said he wasn’t concerned about the delay. He’s simply positioning his company, Budega NYC, for other cannabis opportunities, including branded products and a consumption lounge.
The raid continues with more raids
In November, Leafly reported on the first law enforcement raids on unlicensed cannabis stores. Over the course of two weeks, a task force assembled by Mayor Eric Adams seized 100,000 products and $4 million in cash from unlicensed stores. New York cannabis pioneers like Norman, Juancarlos Huntt and Shiest Bubz have distanced the legacy market, which is the first line to obtain licenses, from the illegal unlicensed businesses that abuse loopholes in the MRTA’s enforcement to position themselves as… to dispense licensed pharmacies.
Neighborhood rivalry is brewing
New Jersey beat New York by about 8 months on the first day of adult sales. And from June through September 2022, the state’s weed sales were up 46% sequentially. In the third quarter alone, the Garden State reportedly sold $116,572,533 worth of legal weed in just 20 open dispensaries. The Cannabis Control Board of New Jersey recently failed in an attempt to dip New York’s limited first day launch into a now-deleted tweet that read, “Aww… we did 12 on our first day but congratulations on that one, it is sweet! Congratulations NYC!”
Competition can produce excellence. Hopefully this friendly rivalry will result in high times and low prices for cannabis lovers in New York and New Jersey alike. Not to mention, Connecitcut will be competing in the Tri-State race next week when adult sales officially begin on January 10th. Ready, set, smoke!
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