Cannabis Multi-State Operators Approved for Entry into New York’s Adult-Use Market on December 29th

In a momentous turn of events within the cannabis industry situated in the state of New York, multistate operators (MSOs) who hold valid medical cannabis licenses have been officially granted authorization by the state’s regulatory authorities. This significant decision has bestowed upon them the unique opportunity to venture into the adult-use cannabis market, with the official commencement date set for the 29th of December. Notably, this date aligns precisely with the first anniversary of the state’s inaugural launch of recreational cannabis sales.

The eagerly awaited announcement of approval by the Cannabis Control Board has been the subject of keen anticipation spanning several months. Nevertheless, it is essential to underscore that this particular decision has assumed an inherently contentious character within the ongoing narrative of New York’s recreational cannabis market.

This pivotal juncture in the market’s evolutionary trajectory closely follows a momentous legal development. On the 1st of December, the New York State Supreme Court delivered a verdict of immense consequence. Specifically, it issued a decree to lift a long-standing injunction that had, until that point, imposed constraints upon regulatory authorities, preventing them from disseminating new licenses for adult-use cannabis enterprises. This injunction had long been a focal point of legal dispute, casting a veil of uncertainty over the industry’s future. Its subsequent removal has effectively paved the way for the expansion and diversification of the adult-use cannabis sector within the state of New York.

Cannabis Control Board Grants Approvals for Registered Organizations to Enter New York’s Adult-Use Market

In the course of its convened session held on Friday, the Cannabis Control Board (CCB) issued approvals for a specific cohort of entities referred to as registered organizations, which bear a resemblance to multistate operators (MSOs) operating within the state of New York. These registered organizations encompass the following entities:

1. Columbia Care NY is affiliated with The Cannabist Co., an MSO headquartered in New York.
2. Curaleaf NY operates as a subsidiary under the umbrella of Curaleaf Holdings, a multistate operator (MSO) with its corporate headquarters in New York.
3. Etain Health, a company owned by RIV Capital, is an investment firm in Toronto.
4. NYCanna is linked to Acreage Holdings, an MSO headquartered in New York.
5. PharmaCann of New York is a division of PharmaCann, an MSO hailing from Chicago.
6. Valley Agriceuticals, a company whose parent organization is Cresco Labs, is an MSO headquartered in Chicago.

As a spokesperson for PharmaCann, Jeremy Unruh expressed their profound satisfaction at having received a recommendation from the Office of Cannabis Management for adult-use approval. In his statement, he conveyed their unwavering dedication to serving consumers in the Empire State with the highest caliber of cannabis products, a mission they have diligently pursued for nearly a decade.

It is worth noting that the Green Market Report initially disclosed these approvals.

In a previous report by MJBizDaily in June, it was underscored that the Office of Cannabis Management in the state had put forth a proposal to permit the entry of MSOs into the recreational market by year-end. This proposal effectively abolished a formerly mandated three-year waiting period that applied to the state’s ten vertically integrated medical cannabis providers, commonly referred to as registered organizations (ROs).

The waiting period was initially enacted to give social equity retailers and smaller suppliers a competitive edge by granting a first-mover advantage. Nevertheless, regulatory authorities subsequently revised their stance, aiming to expand the retail landscape and expedite business operations in response to the proliferation of unlicensed cannabis establishments in the market, particularly within New York City.

The originally intended first-mover advantage substantially reduced its effectiveness as approvals for many Conditional Adult-Use Retail Dispensary (CAURD) applicants and licensees faced prolonged delays, primarily stemming from legal disputes surrounding the licensing process and social equity provisions. This situation culminated in a complex and protracted scenario that required resolution.

Challenges Arise as New York’s Cannabis Growers Showcase Program Faces Termination

On Friday, the Office of Cannabis Management (OCM) made a significant announcement that could have substantial implications for the relatively modest group of craft cultivators in New York, potentially setting back their operations in unforeseen ways.

In a decision that goes against the preferences of smaller-scale growers, the OCM officially disclosed its intention to bring the state’s Cannabis Growers Showcase program to an end by the conclusion of the current year. This program encompasses diverse events, from setups akin to farmers’ markets to more conventional retail experiences. Its primary purpose was to support and assist cannabis cultivators in the state, specifically in selling surplus inventory that had accrued over the previous year.

By the state’s own account, the showcase program has played a substantive role in bolstering the cannabis industry, contributing to reported sales that have exceeded $4 million in the ongoing year. It was conceived as a solution to the perennial challenge of effectively managing excess inventory, a predicament commonly encountered within the cannabis industry.

However, the decision to discontinue this program has raised a concern among smaller cultivators who have come to rely on it as a crucial lifeline. Wyatt Harms, the co-founder and CEO of Flamer, a pre-roll brand based in Brooklyn, articulated the sentiments shared by numerous small farmers. He underscored the issue of insufficient distribution support available to them, emphasizing that many of these smaller operators have invested their life savings into the legal cannabis sector. For them, the showcase program served as an essential avenue to showcase and sell their products, effectively sustaining their operations in the competitive cannabis landscape.

The discontinuation of this program raises questions about the state’s commitment to supporting and nurturing small-scale cannabis businesses, mainly when the industry is still in the process of establishing itself. Smaller operators have frequently relied on programs such as the Cannabis Growers Showcase to sustain their businesses and effectively compete with larger, well-established entities in the market.

It is noteworthy that the sales figures in New York’s cannabis market this year, despite earlier expectations of reaching billion-dollar projections, have earned approximately $110 million. This glaring discrepancy between initial points and the reality of sales underscores the multifaceted challenges and intricacies confronting the cannabis industry within the state.

As of November, New York boasted 31 adult-use cannabis stores operating statewide. This number reflects progress and the potential for further growth in the rapidly evolving cannabis market. Nevertheless, the decision to discontinue the showcase program has introduced an element of uncertainty for small cultivators, raising legitimate concerns about their ability to distribute their products efficiently and remain competitive in the ever-evolving landscape of New York’s legal cannabis industry.