The regulations look to get right what other states that legalized marijuana may have failed: making sure underserved communities and minority businesses benefit from the industry.
“It feels surreal,” Durham said of landing one of the licenses.
Durham, who lives in Binghamton, was one of just 36 “justice-involved” individuals, businesses and nonprofit organizations to get provisional approval from state cannabis regulators on Monday for a Conditional Adult Use Retail Dispensary license. The move sets the stage for him to open one of the first legal marijuana dispensaries in his region of the state, which borders Pennsylvania.
And the new licenses put New York — where illegal sales have proliferated since Albany lawmakers approved marijuana for adult recreational use in 2021 — one step closer to finally launching legal sales across the state. The dispensaries could open before the end of the year, according to regulators.
The state Cannabis Control Board on Monday provisionally approved dispensary licenses for 28 individuals and businesses, marking the first of 150 it plans to award to applicants with both prior marijuana convictions and business experience. Those licensees will now be connected with a retail space and financial support through 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 get the licenses, but the fact that social equity applicants are the first to get them. In other states, he noted, larger companies were first to win licenses, making it hard for smaller social equity dispensaries to compete.
“It’s important from a social justice perspective, but it’s even more important from a market perspective: giving people access to the market first is huge,” he said.
New York lawmakers were insistent that the program first help those who were hurt by marijuana being illegal, which were disproportionately minority communities.
“It shouldn’t be lost on anyone that this is really the first of its kind [program] anywhere,” Jen Metzger, a former state senator and a Cannabis Control Board member, said. “We’re truly leading with equity here.”
Durham, who also has a construction business, said he was initially “really scared to even try to participate” in the marijuana industry based on what’s happened in other states. But he decided to ultimately apply due to how New York structured its program, saying he saw how unjust arrests for illegal marijuana possession had become.
“There was a lot of issues with law enforcement and younger black men when it comes to using marijuana as an excuse to basically intrude into people’s lives,” he said. “That basically was one of those situations that happened — more than one time it happened. That’s actually something that’s pretty normal in my family.”
Nicholas Koury, who has also been selected for one of the state’s first dispensary licenses in Manhattan, said he applied because he’s “always had a passion for cannabis.”
“I love the idea of being part of bringing it to our communities in a safe, honorable, respectful manner,” he said in an interview.
Koury, who was arrested in 2017 for having cannabis in his car, said he wants his eventual storefront “to create a safe environment, and an environment that helps change the stigma of cannabis from a negative to a positive.”
In another first, New York’s model also reserves an additional 25 of its initial dispensary licenses for nonprofits that work with formerly incarcerated people. Those licensees, however, are ineligible for money from the social equity fund.
Among those to secure 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 has committed to opening a dispensary that employs “justice-involved” people. It also plans to launch a vocational training program to help those individuals eventually open their own cannabis businesses.
“I think that’s kind of the ultimate fulfillment of what the state would like to see happen in terms of community-based organizations undertaking these ventures,” 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 the state’s drug laws.
“The state benefited off the destruction of our community, and the destruction of individuals from 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 destroyed communities from it. So it is, without question, the mandate that we invest and help rebuild it and repair some of these communities.”
Ford, however, took issue with the state’s decision not to extend financial startup support to nonprofit license recipients. She called it “a disservice to the success that they want to see from the nonprofits.”
King said Housing Works has enough startup capital to move forward with a dispensary and is looking to lease a 4,000-square-foot retail space in lower Manhattan that could open as early as next month.
“We certainly would love to leverage the lead time to establish our brand,” he said. “We’re starting out with one location, which is all the board would approve in the initial foray. But we’re actually hoping to have at least two, and possibly three, locations by this time next year and are also looking into the possibility of on-site consumption.”
LIFE Camp, meanwhile, hopes to open a brick-and-mortar dispensary location by the beginning of next year. In the meantime, it’s exploring the possibility of launching delivery sales — an option that state regulators said will allow all CAURD licensees to sell cannabis “almost immediately.”
“With all of our dispensary licenses, delivery activity is also authorized,” Office of Cannabis Management executive director Chris Alexander told reporters Monday, noting that at least one retail location will be open by 2023. “We’ll be sending more guidance to our licensees about how they can engage in delivery activity in advance of their retail location becoming available.”
There’s a complicating factor: A lawsuit was successful earlier this month in barring the state from awarding licenses in five regions — the Finger Lakes, Central New York, Western New York, the Hudson Valley and Brooklyn. The state is fighting the ruling, but the outcome could delay some regions of the state from opening marijuana shops.
David Feder, a New York cannabis business attorney and founder of Weed Law, who represents one of the initial license recipients, said although it’s still unclear exactly how the state will roll out delivery sales for dispensary licensees, “it’s feasible to get this done before year-end.”
“People are one pins and needles — because we are so close,” he said.