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State Pot Board Deals Out NY’s First Weed-Selling Licenses

Four each will be based in Manhattan and Queens, with three in The Bronx and two in Staten Island. It’s still not clear when any of them will open — and Brooklyn will have to wait even longer, thanks to a lawsuit.

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A Chelsea marijuana store along 8th Avenue advertised its goods, July 25, 2022.

Ben Fractenberg/THE CITY

The state’s cannabis regulatory board approved 36 of potentially 175 pot-selling licenses Monday — with at least 13 of them to be based in the city.  

The first batch of Conditional Adult-Use Retail Dispensary (CAURD) licenses given by the state Office of Cannabis Management (OCM) are exclusively for people affected by cannabis-related convictions. 

“Not long ago the idea of New York legalizing cannabis seemed unbelievable,” Cannabis Control Board Chair Tremaine Wright said before the vote. “Now, not only have we legalized, but we’re also building a legal adult-use market with an equity-driven approach that embodies the ambitious goals of our MRTA,” the Marihuana Regulation and Taxation Act.

Cannabis Control Board Chair Tremaine Wright (center) at the Office of Cannabis Management hearing on granting licenses, Nov. 21, 2022.

Jimmie McKinney for THE CITY

Of the businesses given the green light Monday, four will be based in Manhattan and four in Queens, while three will be in The Bronx and two in Staten Island, according to biographies of the recipients shared by OCM.

No licensee can yet be based in Brooklyn, and four other regions outside the city, thanks to an injunction earlier this month in a lawsuit by Variscite NY One, a Michigan-based company whose application was rejected because its owner’s conviction was from another state.

The lawsuit argues the CAURD requirement of a cannabis-related conviction goes against the state constitution. 

Eight of the 36 licenses went to nonprofit groups. 

“These are the types of the individuals and organizations that the MRTA envisioned as the bedrock of our industry,” said OCM executive director Chris Alexander during the meeting. 

No Longer Villainized

Nicholas Koury, 33, of Manhattan was among the license recipients. Growing up in East Harlem, Koury started dealing weed when he was 13 years old. In 2017, he was arrested when police found four pounds of cannabis in the trunk of his car.

“It’s a bizarre feeling that it’s something that I can hopefully start to be proud of, rather than be scrutinized for and villainized for,” Koury told THE CITY before Monday’s meeting. 

Nicholas Koury at cannabis license hearing in lower Manhattan, Nov. 21, 2022.

Jimmie McKinney for THE CITY

Koury doesn’t know yet where his dispensary will be located in Manhattan — the state will coordinate with the businesses to find dispensary spaces — or when his business will be up and running.

However, Koury, who has run a gym in Mt. Vernon for a few years and maintains a personal training business, said he’s “excited to put my business expertise to the test.” 

“I think it’s important that especially our underprivileged communities start to be on the forefront of the legalization, just because of the fact that they were on the forefront of the criminalization for so long,” he said.

Getting Off the Ground

Monday’s vote was the culmination of the goals outlined in the MRTA to address the past inequities of marijuana-related law enforcement. 

Across the state, there are 150 licenses available for private businesses, and 25 for nonprofit organizations. Of that total, 70 are allocated to New York City.

Along with cannabis-related conviction requirements, CAURD applicants also had to prove that they had at least two years of experience managing a profitable business

The state will support the CAURD businesses with ready-to-go dispensary locations set up with the help of the Dormitory Authority of the State of New York (DASNY).

Licensees will also be eligible for a loan through the state’s New York Social Equity Cannabis Investment Fund, which they’ll be able to use for construction and other fees associated with opening for business.

Unlike the private businesses, the nonprofits must also have a history of helping formerly incarcerated individuals — and will not be supported with a fully equipped retail location. 

Among the approved nonprofits were Housing Works, Queens-based Urban Upbound, and the Center for Community Alternatives. 

Gov. Kathy Hochul said in October that 20 of the dispensaries would open by year’s end. But Monday’s meeting didn’t shed any light on how the state would meet that goal. 

The recently approved licensees were not given any information about whether the state had secured their retail location. And for city-based licensees, especially in more competitive retail boroughs of Manhattan and Brooklyn, business insiders have said it would be difficult to open that many dispensaries by the end of the year.

At Least One

Speaking to the media after the meeting, OCM head Alexander did not confirm the state had secured any retail locations. He provided a scaled-down estimate of how many dispensaries would be open in the state by the end of the year: at least one. 

Licensees will be able to sell cannabis by delivery only while their locations are being finalized, and will have to complete additional paperwork for authorization. 

Key to the CAURD program is New York Social Equity Cannabis Investment Fund, which is being managed by Social Equity Impact Ventures LLC. While the state plans to generate $50 million of the fund from licensing fees and revenue, the fund manager will raise the remaining $150 million from the private sector

However, it also remains unclear how much has been raised toward the fund. Alexander directed questions about the fund to the DASNY. The agency did not immediately respond to a request for comment.

Alexander said there will likely be another board meeting in December, “where we can continue this work of rolling out the applicants.”

With just 36 of 175 licenses awarded Monday, the remainder of the more than 900 applicants have to wait until the next meeting to find out if they’ll be part of the next wave of CAURD recipients.

“I do feel hopeful,” said Howell “Howie” Miller, 52, a CAURD applicant from The Bronx who did not receive a license on Monday. “It’s the waiting process that’s weighing me down. The anticipation of getting it versus not getting it. I kind of put my life on hold.”

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