As Another Legal Challenge Looms, New York's Marijuana Program Remains A Must-Watch Emerging Market In 2024

Two companies, Variscite New York Four LLC and Variscite New York Five LLC, filed a lawsuit against New York's Office of Cannabis Management (OCM), arguing the state's cannabis licensing program unfairly favors residents, in violation of the Dormant Commerce Clause. 

The two companies are demanding priority consideration due to their previous conviction and secured retail locations.

Applicants with retail spaces feel misled by OCM's process, as only a small percentage will receive licenses via a lottery system, reported Kate Lisa. 

NYS Cannabis Market And Future Prospects

Legal challenges have stalled the industry, leaving local cannabis farmers with excess stock. The OCM plans to issue 250 licenses to applicants with store space soon, aiming to balance the market.

In New York, the cannabis market is expecting significant expansion with the potential opening of over 1,000 recreational stores, building upon the current 31 stores and 400 Conditional Adult-Use Retail Dispensary (CAURD) licensees.

This growth presents substantial opportunities, especially for Multi-State Operators (MSOs), who can enter the recreational market. The state could host up to 600 or even 3,600 stores, depending on market density comparisons with California and Colorado.

However, the short-term outlook for wholesale opportunities in the recreational market appears less promising due to the well-stocked nature of existing stores and current cultivation capacity.

Despite these challenges, analyst Pablo Zuanic noted companies like Curaleaf Holdings, Inc. CURLF and The Cannabist are well-positioned in the recreational wholesale market, with existing cultivation and manufacturing capacities.

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