Would doubling first-round dispensary licenses by the New York State Office of Cannabis Management (OCM) eliminate Midtown’s illegal grey market?
Yesterday, the OCM proposed increasing state cannabis dispensary licenses from 150 to 300. According to an OCM press release, Manhattan will receive 44 of the 150 licenses, up from 22.
“This extension will allow more businesses to engage in the initial wave of this market, allowing them to profit on the growing demand for cannabis products,” said Cannabis Control Board Chair Tremaine Wright.
More enterprises entering this sector will increase innovation and competition, improving user experiences. New York’s cannabis market development will benefit everyone in this dynamic industry.”
“New York is doing something remarkable when it comes to establishing our cannabis sector, and now we’re tripling the impact of our Conditional Adult-Use Retail Dispensary program,” said OCM Executive Director Chris Alexander.
“It’s been amazing to witness the positive atmosphere behind our efforts to benefit entrepreneurs who suffered under New York State. We will continue creating actual possibilities for talented individuals who have been kept out from legal cannabis marketplaces nationwide.”
Several New Yorkers responded to the announcement with skepticism, citing a delayed rollout of licenses. Since marijuana legalization in March 2021, Manhattan has only three licensed dispensaries.
“Hochul predicted 100 dispensaries by December 31 last year. “I didn’t realize she meant 2098,” tweeted one commentator. Another added: “You understand there are thousands of dispensaries in this state already?
Your economics 101 ignorance makes them unlicensed. Demand-supply.” NY Cannabis Insider editor Brad Racino said: “By the end of this month, Kathy Hochul’s state budget planned to have received $56 million from adult-use cannabis taxes. In January, the state collected $20,000 in taxes.
A legal dispensary has yet to be revealed or permitted in Hell’s Kitchen, but dozens of grey market stores have filled the West Side with smoke, confusing locals and shoppers.
W42ST assigned Catie Savage to examine all local smoke shops—tobacco, cannabis, and “other”—last month. She found more than 30 dispensaries, many of which were “weed bodegas”—New York’s fastest-growing unlawful operation.
Easily identified by their sometimes jaunty, colorful interior decor and creative names, “weed bodegas” often resemble high-budget, legally licensed shops, but their lack of ingredient safety, price, and security regulations, as well as stolen market share from legal shops, have led local lawmakers to view the rapidly generating stores as deeply detrimental to the city’s legal dispensary development.
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New Yorkers claim that the combination of the sluggish legalizing process and the city’s past enforcement policy in which police would raid a shop, only to find it reopened the next day have created an environment where grey businesses may continue to grow up like…weeds.
Going through Hell’s Kitchen, where shuttered stores convert into smoke shops on a daily basis, there was no hint of a slowing – the 10th Avenue Strand Han’s Cleaner is closed to be replaced with a giant “PINK TREEZZZ” dispensary sign.
At a February 7 press conference, DA Alvin Bragg, Mayor Eric Adams, City Council Members Gale Brewer, Erik Bottcher, and other legislators declared a new, eviction-based initiative to shut down grey market enterprises, which they argued not only stole profits from justice-affected operators of legal shops but endangered the public by selling unregulated, sometimes contaminated marijuana and by marketing and selling to minors.
OCM spokesperson Aaron Ghitelman told W42ST: “We understand the urge for things to happen quickly and all at once, New Yorkers have been excitedly waiting for a legal cannabis sector since Colorado and Washington first legalized cannabis in 2014.
We always urge optimistic entrepreneurs not to put the wagon before the horse. We carefully regulate and protect this business. New York’s two-tiered market allows all operators to compete and succeed.
This is not a market that will be dominated or monopolized by a few well-capitalized competitors, but one that gives all who enter a meaningful opportunity at success.”
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