The regulations seek to correct what other states that have legalized marijuana may have failed to do: ensure underserved communities and minority businesses benefit from the industry.
“It feels surreal,” Durham said of receiving one of the licenses.
Durham, who lives in Binghamton, was one of just 36 “judicially involved” individuals, companies and non-profit organizations to receive provisional approval from state cannabis regulators on Monday for a conditional retail pharmacy license for adult use. The move sets the stage for him to open one of the first legal marijuana dispensaries in his state region, which borders Pennsylvania.
And the new licenses bring New York — where illicit sales have increased since Albany lawmakers allowed marijuana for recreational use by adults in 2021 — one step closer to legal sales statewide. The pharmacies could open before the end of the year, according to regulators.
The state Cannabis Control Board on Monday provisionally approved pharmacy licenses for 28 individuals and companies, making it the first of 150 to be awarded to applicants who have both a marijuana bias and business experience. These licensees will now be associated with a retail space and financial support a new $200 million social equity fund.
Allan Gandelman, president of the New York State Cannabis Growers and Processors Association, said the state’s approach is unique, not only in terms of who will receive the licenses, but also in terms of the fact that social justice applicants are first be they receive. In other states, larger companies are the first to receive licenses, making it difficult for smaller social justice dispensaries to compete.
“It’s important from a social justice perspective, but even more important from a market perspective: getting people into the market first is huge,” he said.
New York lawmakers insisted the program first help those hurt by illegal marijuana, which were disproportionately minority communities.
“It shouldn’t escape anyone that this really is the first of its kind [program] everywhere,” said Jen Metzger, a former state senator and member of the Cannabis Control Board. “We’re really leading with justice here.”
Durham, who also has a construction business, said he was initially “really scared to even try to get involved in the marijuana industry” based on what’s been happening in other states. But he ultimately decided to apply because New York had structured his program, and said he saw how unfair arrests for illegal marijuana possession had become.
“There’s been a lot of trouble with law enforcement and younger black men when it comes to using marijuana as an excuse to basically interfere in people’s lives,” he said. “It was basically one of those situations that happened – it happened more than once. It’s actually something that’s pretty normal in my family.”
Nicholas Koury, who was also selected for one of the state’s first dispensary licenses in Manhattan, said he applied because he “has always had a passion for cannabis.”
“I love the idea of being a part of bringing it to our communities in a safe, honorable and respectful way,” he said in an interview.
Koury, who was arrested in 2017 for having cannabis in his car, said he wanted his eventual storefront to “create a safe environment and an environment that will help shift the stigma surrounding cannabis from a negative to a positive.”
In another first, the New York model is reserving an additional 25 of its initial pharmacy licenses for nonprofit organizations that work with ex-convicts. However, these licensees are not eligible for Social Justice Fund monies.
Among those who secured one of eight nonprofit licenses granted provisional approval this week was Housing Works, a New York City-based organization dedicated to ending homelessness and AIDS.
Charles King, the organization’s CEO, said Housing Works is committed to opening a dispensary that will employ “justice-related” people. There are also plans to launch a vocational training program to help these individuals eventually open their own cannabis business.
“I think that’s the ultimate fulfillment of what the state wants to see in terms of community-based organizations doing these endeavors,” he said in an interview.
LIFE Camp, a New York City-based community organization focused on violence prevention, meanwhile, plans to use its nonprofit dispensary license to expand its social justice work, including reinvesting revenue from its retail cannabis sales into communities disproportionately affected by subject to state drug laws.
“The state benefited from the destruction of our community and the destruction of individuals through the ‘criminalization’ of marijuana and cannabis sales in the ’80s and ’90s,” LIFE camp founder Erica Ford said in an interview. “Now it’s a billion-dollar industry — and you’ve destroyed communities as a result. So without question, the mandate is that we invest and help rebuild and repair some of these communities.”
However, Ford criticized the state’s decision not to extend the start-up grant to non-profit licensee recipients. She called it “a disservice to the success they want to see from the nonprofits.”
King said Housing Works has enough seed capital to move forward with a pharmacy and is aiming to lease a 4,000-square-foot retail space in Lower Manhattan that could open as early as next month.
“We would certainly like to use the lead time to establish our brand,” he said. “We’re starting with one site, that’s all the board would approve in the first push. But we are actually hoping to have at least two, possibly three locations by this time next year and are also looking at the possibility of on-site consumption.”
LIFE Camp, meanwhile, hopes to open a brick-and-mortar pharmacy by early next year. In the meantime, it’s exploring the possibility of launching supply sales — an option that state regulators said will allow all CAURD licensees to start selling cannabis “almost immediately.”
“With all of our dispensary licenses, delivery activity is also authorized,” Chris Alexander, executive director of the Office of Cannabis Management, told reporters Monday, noting that at least one retail location will be open by 2023. Licensees will be informed about how they engage in delivery activity before their retail location becomes available.”
There is one complicating factor: a lawsuit was successful Earlier this month, the state was banned from issuing licenses in five regions — the Finger Lakes, Central New York, Western New York, the Hudson Valley and Brooklyn. The state fights the ruling, but the outcome could prevent some regions of the state from opening marijuana stores.
David Feder, a New York City cannabis corporate attorney and founder of Weed Law, which represents one of the early licensees, said while it’s still unclear how the state will implement supply sales for dispensary licensees, “it’s doable to get this done before the end of the year .”
“People are a bottleneck – because we’re so close,” he said.