Are you wondering how to open a dispensary in New York? This page will keep you up to date on the latest news and information relevant to opening a cannabis business in New York. This includes helpful insights on what is to come next.
On Wednesday, March 31st, 2021, New York became the 15th state to legalize recreational cannabis after Gov. Andrew Cuomo signed the Marihuana Regulation & Taxation Act (MRTA). This means that one of the largest potential markets for cannabis has opened up. It’s just a matter of time until you start seeing a cannabis dispensary nearby. Assuming the Cannabis Control Board’s 18-month schedule is followed, recreational dispensaries should be able to operate legally by the summer of 2023 at the latest.
According to the state governor’s office, the approach involves a comprehensive regulatory process involving:
The MRTA contains measures to expand the Medical Cannabis Program as well. On February 17th, 2022, the New York State Cannabis Control Board authorized the proposed regulations for New York’s medicinal marijuana program. The new regulation, which will be out for public comment for 60 days, concerns product packaging and labeling and other efficiencies for producers. The new rules will incorporate aspects of the new Marijuana Regulation and Taxation Act (MRTA).
On March 10, 2022, the CCB proposed rules for conditional adult-use retail dispensaries. Only justice-involved candidates in the state may get conditional adult-use dispensary licenses. A “justice-involved” person is one with prior cannabis-related offenses or direct family members with prior cannabis-related offenses, who have prior company ownership and operating experience. The proposed rules will go into effect once a Notice of Adoption is published in the New York State Register.
On March 11th, 2022, Gov. Hochul announced that the first licenses to establish the newly authorized marijuana retail stores in the state later this year would be reserved for those with past marijuana-related crimes. Social equity candidates will be given the first 100 to 200 retail marijuana licenses in the state. Although there is still a public comment period on the policy, state authorities anticipate that licenses will be granted by autumn.
On June 1st, 2022, state authorities voted to adopt a draft of guidelines for the packaging and marketing of legal cannabis products. The proposed rules would set the conditions for the sale of recreational marijuana products, which are anticipated to be available for purchase by the end of this year. The draft regulations from the New York Cannabis Control Board can be viewed here.
This year, we believe more details will come to learn how to open a dispensary in New York, the requirements, the dispensary application process, and associated costs. We will be adding these details to this page as new information becomes available. Here’s what you need to know now to be ready.
In recent years, former Gov. Andrew Cuomo and Democratic legislators sought to legalize marijuana, but those attempts failed. In 2019, for example, legalization crumbled because of differences over how to govern the industry and manage revenues. Former Gov. Cuomo promised in 2020 and 2021 to pass the legislation. After years of unsuccessful attempts and stalled efforts, the state of New York finally legalized recreational marijuana in March 2021.
On August 10th, 2021, New York Governor Andrew Cuomo was replaced by Governor Kathy Hochul, due to a harassment scandal.
What does the appointment of Kathy Hochul as Governor mean for New York’s coming recreational cannabis?
New York’s legalized marijuana program was reportedly delayed because Cuomo has stalled nominating regulators. No marijuana sales can transpire in the state unless there are regulators to set the rules and make the decisions. According to lawmakers, it will take a year or more for cannabis sales to begin in New York under Cuomo’s leadership.
Lt. Gov. Hochul has pledged that getting the state’s marijuana sales program off the ground will be a top priority. On September 22nd, 2021, Gov. Hochul named Reuben McDaniel, III, and Jessica Garcia as her final two appointees to regulate the state’s adult-use marijuana market, completing the New York marijuana regulatory board.
Gov. Kathy Hochul said on January 5th, 2022, during her State of the State speech, that the state would create a $200 million fund to assist social equity applicants who are pursuing adult-use cannabis company licenses. New York is working to make the state’s cannabis market the most diverse and inclusive in the nation, and this fund will provide startup finance to social equity applicants as part of its efforts to do so.
We anticipate that the appointment of Lt. Governor Hochul to Governor could have a positive impact on the state’s adult-use cannabis early rollout and the speed of New York’s cannabis program’s growth. In an interview, she commented that legalization is “long-overdue” and “we need the money.” She will gain much political capital by embracing adult-use cannabis as her first success stories. It will not be surprising if the ball starts rolling rapidly.
Most experts agree New York may be one of the hottest cannabis markets in the United States. According to the New York Comptroller, legalization may help the state make the 3.1 billion dollars. Brightfield Group, a Chicago-based research firm, puts it at 2.2 billion dollars by 2023 if legalization were to occur by 2021, making New York the second-largest cannabis market! The common-sense notion is that the size of the state’s population, along with wealth, and open culture, makes it clear that the opportunity for earnings is vast.
One of the provisions of the MRTA gave local governments the option of opting out of the state-issuing licenses for marijuana dispensaries and on-site consumption lounges until December 31st, 2021. A town, city, or village determined to outright ban or restrict marijuana must adopt a local law requesting the prohibition of dispensaries or consumption lounges in their jurisdiction.
Now that the deadline has passed, out of New York’s 1,520 municipalities, 764 decided to opt out of dispensaries, and 883 opted out of consumption sites. Please view the list of municipalities that have taken the choice to prohibit the establishment of adult-use marijuana stores and on-site consumption lounges in their jurisdiction here.
So, how much do you need to start a dispensary? Here are the costs and capital requirements associated with opening a dispensary.
To open a dispensary in New York, you should be eligible for a conditional adult-use retail license. ‘Justice involved’ individuals will be the state’s first licensed retailers.
Application and License Fee: In New York, it costs $2,000 to get a conditional adult-use retail license. These fees can’t be refunded.
Real Estate & Renovation
You can buy or lease cannabis real estate to run your cannabis businesses. Because New York is such a large state with diverse property and rental values, it’s essential to do your research as to where you’d like to open your dispensary business. These are the costs for New York cannabis dispensary real estate:
It is also necessary to factor in the construction and renovation of the property to comply with standards, maximize store flow and reflect your brand image. According to Grow America Builders, renovation of smaller dispensaries costs between $350,000 and $500,000, mid-sized dispensaries between $500,000 and $750,000, and large dispensaries above $750,000. In addition, a renovation of an existing building can cost $350,000 – $1,000,000.
You might be wondering how profitable a dispensary is and how much an owner makes?
A Factbook found that a dispensary can make an average of $974 per square foot of dispensary space each year. In addition, Statista research estimates the average dispensary could generate up to $1.8 million in profit from approximately $3 million in revenue.
According to data published by MMJ Business Daily, 15% of dispensary owners reported annual revenue of less than $100,000, 27% reported sales of between $100,000 and $250,000, 15% reported sales of between $500,000 and $1 million, and over a quarter of dispensaries reported annual revenues of more than $1 million.
As more information develops regarding New York’s Adult Cannabis program, we will weigh our thoughts on the state’s specific profitability.
Here are some of the dispensary open now in New York and their annual revenue:
At the moment, only people who have been convicted of crimes related to marijuana in New York will get the first licenses to open cannabis dispensaries in the state.
To open a dispensary in New York, you or a family member must have a prior cannabis-related offense and have prior company ownership and operating experience. People who are considered to be “justice-involved” are able to apply for a conditional adult-use retail dispensary license.
The conditional adult-use retail dispensary license is a subclass of the retail dispensary license. It is only accessible to applicants who fit the qualifying requirements and may get New York State aid in the form of a loan or help to identify and to obtain a dispensary site.
These dispensaries will be the first to operate in the state by the end of 2022, while others may follow in early 2023. The amount of retail licenses the state will issue depends on market demand, authorities said.
A conditional adult-use retail dispensary license is good for four years and must be renewed every two years. Prior to the expiry of conditional licenses, license holders may seek to transition to a standard retail dispensary license, as prescribed by the Office in anticipated adult-use retail dispensary rules that are currently under preparation.
Under the Cannabis Control Board’s proposed rules, applicants seeking a conditional adult-use retail dispensary license must meet the following requirements:
This section will be updated with new information once further opportunities become available.
According to Chris Alexander, director of the Office of Cannabis Management, the OCM aims to begin accepting applications for cannabis licenses by the end of 2022.
Meanwhile, here’s some information on the medical marijuana program applications. A registered organization application must contain information such as:
The first move to legalize medical marijuana was in 2014, with the Compassionate Care Act. Only five licenses were granted at that time, and no new licenses have been given since the deadline of June 5th, 2015. Forty-three applicants applied to manufacture and dispense medical cannabis. The state law initially allowed five organizations to register with each organization authorized to operate four medical marijuana dispensaries statewide. As of August 2021, there are a total of 10 registered organizations.
Since then, no new medical marijuana licenses have been granted. The focus has been exclusively on full legalization. Based on 2020 state government proposals, medical cannabis will be managed and regulated by the proposed cannabis management office.
As stated, New York has become the 15th state to legalize recreational marijuana. On March 31st, 2021, Governor Andrew M. Cuomo signed a bill to legalize recreational cannabis for adults 21 years old and older. Here’s the whole language of the bill: The Marihuana Regulation and Taxation Act.
Here are the key takeaways from the act:
Regulation will be under the management of the newly created Office of Cannabis Management, and they will be responsible for adult use, medical, and cannabinoid hemp industries. The Cannabis Control Board will oversee this office, including five appointed members. Three would be appointed by the governor and one each to the senate and assembly, respectively.
According to New York’s Marijuana Regulation & Taxation Act, the Cannabis Advisory Board will help create the social and economic equity plan and support the Cannabis Control Board in developing laws for the broader program. On June 22nd, the appointment of additional members to New York’s Cannabis Advisory Board was announced by Governor Hochul. This board will work in conjunction with the Office of Cannabis Management to develop a legal cannabis business in New York that is equitable and welcoming to all people.
According to the Marihuana Regulation & Taxation Act, eleven adult-use cannabis license types will be available. These includes:
Adult Use Cultivator License
“Cultivation” refers to the cultivation of cannabis plants, including their growth, cloning, harvesting, drying, curing, grading, and trimming.
A cannabis cultivator license permits the acquisition, possession, distribution, cultivation, and sale of cannabis to processors.
A person can only have one cultivator license at a time. A cultivator can have one processor and one distributor license, but only for distributing their own products.
It’s not allowed for growers to own or have any interest in a retail license.
Adult-use Nursery License
Nursery refers to a licensee who produces only cannabis clones, seeds, and other agricultural products for licensed adult-use cannabis cultivators, microbusinesses, cooperatives, and registered organizations to plant, propagate and cultivate their marijuana plants.
An adult-use nursery license permits the sale, production, and distribution of cannabis clones, immature plants, cannabis seeds, and other agricultural products used for the planting, propagation, and cultivation of marijuana by licensed adult-use cultivators, cooperatives, microbusinesses, or registered organizations.
One nursery license may be held by an adult-use cultivator.
Adult-use Processor License
Concentrated cannabis extraction and/or compounding, blends, extractions, infusions, or other manufacturing of concentrated cannabis and/or cannabis products are referred to as “processing.”
An adult-use cannabis processor license permits the acquisition, possession, processing, and sale of cannabis from adult-use cultivators to licensed distributors.
No one can own more than one processing business license. A processor can also get a distributor’s license so that they can sell their own products.
It’s not allowed for processors to own or have any interest in a retail license.
Adult-use Distributor License
A “distributor” is defined as any individual who sells cannabis products wholesale.
An adult-use distributor license permits acquisition, possession, distribution, and cannabis sale from cultivator, processor, cooperative, microbusiness, or RO to licensed retail dispensaries, delivery, and on-site consumption sites.
A person may not have more than one distributor license at the same time. In the cannabis retail tier, distributors are not permitted to own or have any involvement in a licensee.
Adult-use Cooperative License
An adult-use cooperative license permits the acquisition, possession, cultivation, processing, and sale from the adult-use cooperative to licensed distributors, on-site consumption sites, registered organizations, and retail dispensaries.
A cooperative license should be structured under cooperative principles, including democratic governance by members, one vote per member.
There should be no more than one cooperative license per individual. Cannabis retail licenses may not be owned by cooperatives.
Adult-use Microbusiness License
“Microbusiness” refers to a person who has a license to grow, process, distribute, and sell cannabis.
An adult-use microbusiness license permits limited cultivation, processing, distribution, delivery, and sale of own adult-use cannabis and cannabis products.
A person may not have more than one microbusiness license at the same time. No microbusiness may have an interest in or ownership in any other sort of adult-use license.
Adult-use Retail Dispensary License
“Retailer” refers to any individual who sells any cannabis product to cannabis customers in a retail location. “Retailer” refers to any individual who sells any cannabis product to cannabis customers in a retail location.
An adult-use retail dispensary permits acquisition, possession, sale, and delivery of cannabis from the retail dispensary to cannabis consumers.
No one may own more than three retail marijuana dispensary licenses. Retail licensees are prohibited from owning or holding an interest in a licensee in the processing, cultivation, or distribution tiers.
Adult-use On-site Consumption License
The term “on-site consumption” refers to the act of consuming cannabis at a location that has been licensed by the Cannabis Control Board.
An on-site consumption license permits the acquisition, possession, cultivation, processing, and sale from the adult-use cooperative to licensed distributors, on-site consumption sites, registered organizations, and retail dispensaries.
A person may not have more than three on-site consumption permits in his or her possession. Licensees for on-site consumption are not permitted to have any ownership or interest in a licensee in the cultivation, processing, or distribution tiers of the cannabis industry.
Adult-use Delivery License
An adult-use delivery license permits the delivery of cannabis and cannabis products to cannabis consumers.
A delivery license cannot have more than twenty-five persons offering full-time compensated delivery services to cannabis users every week.
A delivery license may only be owned by one individual at a time. Other adult-use license types may not be owned by a delivery licensee.
Registered Organization Adult-use Cultivator Processor Distributor Retail Dispensary License
A license permits a registered organization to have the same privileges and conditions as an adult-use cultivator, processor, distributor, and retail dispensary licensee.
The site of adult-use retail dispensaries operated by registered organizations will be restricted to three of the organization’s medical dispensaries, and the organization will only be authorized to distribute its own products.
No registered organization may own or hold any other adult-use license types.
Registered Organization Adult-use Cultivator Processor Distributor License
A license permits a registered organization to have the same privileges as an adult-use cultivator, processor, and distributor licensee.
There can be no interest in or ownership of any other adult-use license type from a registered organization.
The bill sets out to have 50% of licenses given out to “social equity applicants.”This means individuals from communities disproportionately impacted by cannabis prohibition, minorities, women-owned businesses, service-disabled veterans, distressed NY farmers, and service-disabled veterans.
Lt. Governor Hochul expressed support for the importance of social equity provisions in the state’s new legalization law and being on the right side of history.
As stated by Freeman Klopott, the Office of Cannabis Management’s director of communications, the office will continue to move forward as swiftly as possible while also ensuring that they do things the right way and provide equitable chances in which other states have failed.
On June 22nd, Governor Kathy Hochul made an announcement on the next measures that will be taken to advance equity in New York’s rapidly expanding cannabis business. The Social Equity Impact Ventures, LLC, a leading minority-led investment team, is selected as the sponsor and manager of the $200 million New York Social Equity Cannabis Investment Fund.
In the upcoming weeks and through 2022, we anticipate many new events that will affect how quickly this happens, what the requirements will look like to start a marijuana dispensary, and when the state will begin accepting license applicants. By adding yourself to our New York Cannabis Mailing List (Below), we will keep you updated on all relevant news that matters, and not so easy to find news and comments based on New York Legalization below. This includes but is not limited to: