New York marijuana regulators on Tuesday further expanded the state’s licensed market by adding 123 permits. They also moved forward with several notable tweaks to business rules, such as a new potential zoning variance that could allow dispensaries to open more closely together in densely-packed metro areas like New York City.

According to a market update from the Office of Cannabis Management, legal marijuana sales thus far in 2024 have topped $590 million and are expected to further double by the end of the year, with 185 dispensaries operational and many more in the pipeline for coming months.

“We’re continuing to adapt to the evolving needs of this cannabis market,” Tremaine Wright, the chairwoman of the New York Cannabis Control Board, remarked at the outset of the meeting.

The CCB signed off on:

• 26 new retail permits
• 24 microbusinesses
• 19 cultivators
• 15 distributors
• 39 processors
• 5 provisional retail permits.

OCM staffer Patrick McKeage said the approvals bring the new total of recreational marijuana licenses issued this year to 951.

The board also issued formal denials for several dozen license applicants, including three that were found to have been selling marijuana without permits, McKeage said, and two storefronts that were padlocked shut for illegal sales.

“The board and office have communicated this message consistently, that participation in the illicit market will inhibit your ability to obtain a license in the legal regulated market,” he said. “There are consequences to running an illicit dispensary that extend beyond the enforcement activity.”

Sales keep increasing

New York’s legal cannabis sales in 2024 hit $590.7 million, OCM Policy Director John Kagia told the CCB. That included August sales of $97.8 million, a new monthly record that Kagia said was “a very, very significant jump” from the $68.8 million sold in July and the $74.1 million sold in June.

It also included the first two sales weeks that topped $20 million, both in the latter half of August, he noted.

Kagia said that sales have really accelerated since the state and the New York City crackdown on unlicensed sales began in the spring, and that some shops that had been open for 16 weeks or longer registered a 97% increase in sales.

The legal market overall has gained about $5 million per week in sales due to the enforcement push, he said.

“The fact that we’re over $20 million a week in retail revenue, and just over the next three weeks we expect to see another 21 doors open … puts us in very, very strong step for a blockbuster end to the year,” Kagia said. “Even if we just remained where we are … that would put us on track to double what we’ve generated so far this year.”

“We’re very, very bullish about our outlook for the year,” he said. “For anybody who thought there was not a lot of velocity in this market, given some of the challenges at the start, I’m very happy with the trajectory of our retail sales.”

Policy changes

The CCB also moved toward accepting location change requests by business license applicants – including hopeful retailers who needed to move due to the “proximity protection” buffer zone of at least 1,000 feet between licensed stores. The board signed off on 14 such relocation requests and paved the way for more.

In connection with the proximity protection, the board also gave the green light to a new rule that is intended to allow licensed shop owners to apply for a “public convenience and advantage” request, which could nullify the 1,000 foot buffer zone. The zoning setback requirement and the proximity protection rule has been cited by several dispensary applicants as a major hurdle in finding compliant real estate on which to house their shops. There are currently 1,026 dispensary sites that have been given “proximity protection” by the OCM, Kagia said.

That rule has at least two months before it can go into effect, warned Kagia, because it has to go through a 60-day public comment period. He also noted that the proposed regulation change isn’t meant to do away with the 1,000-foot buffer for most licensees.

“These PCA waivers are intended to be the exception to the proximity rule, not the rule. These are not a standard approval for every licensee who will apply for one,” Kagia added.

The OCM licensing team also announced a new $5 million grant program designed specifically for CAURD licensees in need of financial assistance. OCM staffer Tabitha Robinson said that the new program has yet to begin accepting applications from businesses, but once it does, it will award up to $35,000 per licensee for help with things such as rent payments, renovations, retail hardware purchases, security systems and other necessities.

The grant program will be run by Empire State Development, a private partner with OCM. Robinson said that ESD is still in the request for proposals phase, looking for a “third-party grant administrator.” Proposals for that position are due Sept. 16, after which the agency will determine the actual grant timeline for participants.

Seed-to-sale tracking is also still in the works, OCM staff said, and it won’t be long before the entire supply chain is required to utilize BioTrack, the private inventory tracking system contracted by the state. That means companies upstream in the supply chain will have to begin purchasing tracking tags from BioTrack, which will be offset by $250,000 in subsidies from the OCM, Kagia said.

Feedback runs the gamut

The CCB also, as per usual, got an earful from a number of unhappy licenseholders who reported various issues with how the industry is performing thus far.

But the first speaker was a guest from Albany, Majority Leader Crystal Peoples-Stokes, one of the prime sponsors of the 2021 state law which legalized recreational cannabis. Peoples-Stokes offered praise for the CCB and OCM, and said the regulators were doing “amazing work.”

“It’s not a disaster. In fact, it’s one of the best things going on right now in the world or in America. There’s no one else that meets these numbers that you all have met,” Peoples-Stokes said of the New York cannabis market rollout, referring to a lament from Gov. Kathy Hochul earlier this year.

At the other end of the spectrum was farmer Jeanette Miller, who last year caused a stir when she appeared at a CCB meeting with a noose around her neck to symbolize how hard cannabis farmers have been hit by various market forces. Miller listed various troubles that farmers had faced before informing the CCB that a colleague of hers had taken his own life.

“We literally rolled this industry out on our back, and people are dying. I came here, I was here a year ago, and I said something very serious then,” Miller said, before asserting that a 22-year-old man who was a friend and “part of my business” had died by suicide.

“He’s dead now. He’s dead now,” Miller told the CCB.

Other speakers from the industry also told the CCB they were “bleeding money” while waiting for answers on their permit applications to OCM.

“We are operational in other states. We know how this game works, and this is very, very slow,” said a spokesman from High Wire Farms, who is part of the November retail application pool that is still being reviewed.

At the close of the meeting, Wright acknowledged the pain of stakeholders, and thanked them for sharing their stories.

“It does not fall on deaf ears,” she promised.