New York Cannabis Industry Update: Revised Rules, Summit And Enforcement Provisions

New York cannabis regulators issued revised marijuana industry rules on Wednesday in response to more than 3,500 public comments. They will be subject to a 45-day public comment period, reported Green Market Report.

Some of the rules from the Office of Cannabis Management's document and highlighted by New York-based lawyers Jeffrey Hoffman and Michelle Bodian include:

• Starting December 29, 2023, the ten licensed registered organizations in New York - multistate operators that control the medical marijuana market - will be permitted to enter the recreational cannabis retail market. This is a significant shift from the original plan, which stipulated that the ROs must wait three years before joining the recreational market.
• Those applying without a pre-determined location seeking a license would be provided a provisional license following the submission of initial information on their business and the applicant’s eligibility.
• The first co-located recreational and medical dispensary for each RO will cost $5 million in licensing fees. Those businesses will be allowed to kick off their second and third recreational shops six months later, in June 2024.
• Microbusinesses will have the opportunity to purchase up to 500 pounds of biomass annually. Those operators would be able to acquire additional quantities in the event of crop failure.
• For the first time, licensed retailers could designate an indoor area within their dispensary as a consumption site.

"While the revised regulations did not include all of the changes the industry was hoping for, having near final form regulations means the we have our roadmap [in particular with regards to permissible funding] and we can start preparing clients for applications that we anticipate opening in the fall," Bodian, a partner at cannabis law firm Vicente LLP told Benzinga.

Interactive Cannabis Workshop

Meanwhile, the revised rules come ahead of NY Cannabis Insider’s industry summit scheduled for May 18 at The Desmond Hotel in Albany.

According to Syracuse, the conference is the first of its kind in 2023 where cannabis growers, processors and retailers, as well as attorneys, consultants and politicians will gather to learn and address issues such as a small number of stores selling recreational cannabis in the state; $0 raised for the Conditional Adult-Use Retail Dispensary program; competition between DASNY and CAURD licensees for locations and Gov. Kathy Hochul’s enforcement bill, to name a few.

Skepticism Around Hochul’s New Enforcement Provisions

Hochul signed the measure last week proposing steep fines for the unlicensed and illicit sale of cannabis across New York State. The new legislation allows OCM to issue civil penalties against unlicensed cannabis businesses with fines as high as $20,000 per day and unlicensed cannabis sales deemed a crime. The measure also includes provisions related to taxes and fraudulent and criminal actions.

However, some industry shareholders and experts doubt that Hochul’s policy change would result in clamping down on at least 1,500 unlicensed marijuana sellers in New York City alone, reported Green Market Report.

New York attorney David Feder called it nearly impossible.

”I have spoken to people that are operating these types of businesses, and what was said was, they’ll get raided, get $30,000 worth of product confiscated, they’ll receive a ticket, and then the very next day they’ll restock the shelves with another $30,000 worth of product,” Feder said.

He proposed one possible solution to the growing issue. “I truly believe the only way to fix this is to open the door up immediately to licensing for everyone,” he said.

Lauren Rudick, who is also a New York cannabis attorney, said that fines won't solve the problem either.

“Fines, they don’t work,” she said. “They don’t work up in Canada. You see illicit operators, they pay the fines, they pay their taxes, and they’re happy to stay operating.”

Photo: Courtesy of King of Hearts by Wikimedia Commons and squarefrog by Pixabay