The Rollout of Legal Pot Stores in New York Is Going Slower Than a Stoned Turtle

One cannabis dispensary licensed by New York has spent the past year working with the state to open in the Bronx. By the time the store is expected to unlock its door, eight months will have passed since the license holder secured a location and almost a year since the license was awarded.

Now the fate of the store — and nearly 500 others — is unclear.

Earlier this month, a New York Supreme Court judge issued an injunction, blocking the state from processing licenses. The order is the result of a lawsuit, filed by an Army veteran, alleging that the New York wrongfully limited its initial round of licenses to individuals who had prior marijuana convictions — rather than the wider group of applicants that the original law meant to include.

That means that hundreds of license holders — who invested in the promise that they could turn their marijuana convictions into successful businesses under legalization — are waiting to learn if the state will be able to deliver after all.

A hearing scheduled for Aug. 25 may decide whether some of the stores will be able to open. Hundreds of others have until early September to submit a list of their costs so far in order for the state to decide how to move forward, sources involved in the process told The Messenger.

“It’s been a nightmare,” one licensee told The Messenger on condition of anonymity because they do not want to jeopardize their relationship with the state.

New York has been applauded for its attempt to prioritize so-called "justice-involved individuals" — as long as they have a track record of running a profitable business — in the rollout of legalized cannabis. However, it has repeatedly missed its own goals. 

Last year, Gov. Kathy Hochul said that 20 dispensaries would be open by the end of 2022, with another 20 openings each month after that.

Just one dispensary opened last year and many of the 23 currently open are pop-ups. Though some individual dispensaries that are open have exceeded revenue expectations, for the 12 months ending March 31 tax collection for the state as a whole totaled $12.6 million — below projections of $56 million. 

“We are reviewing the recent Court decision and will be in touch with all licensees to discuss the path forward but we will absolutely apply to the Court for exemptions from the injunction on behalf of provisional licensees who are ready to open,” Office of Cannabis Management Spokesperson Trivette Knowles said. 

Illicit sellers have thrived, with an estimated 1,500 illegal stores in New York City alone selling weed products since 2021. Meanwhile, licensees have become increasingly frustrated with the state’s slow and confusing process. In June those working to open legal shops had an explosive meeting with state officials. New York Cannabis Control Board member Reuben McDaniel resigned from his position days later.

“They’ve put in at least $2,000 for the application fee,” said Weed Law Founder David Feder, whose clients have been affected by the injunction. “After they've been awarded a license, they’ve hired lawyers, some people have spent money on brokers and are trying to find leases.”

Other states have had smoother rollouts. In nearby New Jersey, which legalized recreational marijuana around the same time as New York, it was projected that the state would receive $118.2 million to $173.5 million per year. In its first quarter of sales, nearly $80 million was collected.

Experts say that New York could have avoided the lawsuit by opening the application to everyone and scoring applications by social equity characteristics, including — but not limited to — past related drug charges.

“I feel like they’ve chosen the path of most resistance,” cannabis banking expert Peter Su said.