New York marijuana regulators on Tuesday approved 86 more recreational cannabis business permits, bringing the total number of licenses awarded so far this year to 841 and roughly 1,600 since licensing began two years ago.

The state Cannabis Control Board unanimously signed off on the new group of permits, which included:

• 22 retailers
• 16 microbusinesses
• 19 cultivators
• 11 distributors
• 18 processors

Regulators also signed off on another 15 provisional licenses for retailers.

State-legal marijuana sales have neared the half-billion-dollar mark since the market launched in December 2022, with $493 million in all-time sales as of July 24, Office of Cannabis Management Policy Director John Kagia told the board, adding that the legal market is still gaining “great momentum.”

“We are now comfortably double where we were by the end of 2023: $160 million for 2023, and we’re already at $332 million for 2024 and growing. I think this is just, again, a very bullish outlook for this year,” Kagia said. “I would fully expect that, as New York’s legal market grows, a $5 billion outlook over the next few years is a reasonable estimate.”

But, he added, “There’s still a lot more work to do.”

Licensing ongoing

There are still only 156 legal recreational marijuana shops operating across New York state, 75 of which are in New York City, Kagia reported, though hundreds more retailers are working toward opening their doors.

OCM staffer Patrick McKeage told the board that of the 1,850 retail permit applications with locations locked down that were submitted by mid-November last year, about 600 remain to be reviewed. The office expects to finish that task before the end of the year.

“We will also be reviewing all applications in the November queue, so we are making our way through that entire queue,” McKeage said, encouraging those who applied in that window not to give up hope.

But, McKeage said, the CCB has yet to decide what will happen with the 4,303 retail permit applications that were submitted in December without locations.

“The number of licenses to be issued will be subject to supply and demand, and market factors, to try and balance our two-tier market which we have,” McKeage said. “That harmony is something we’re looking to keep in balance. And as more licenses continue to open … we’ll have more data to better understand what that happy medium is.”

Enforcement impacts

The ongoing enforcement push against the thousands of unlicensed cannabis shops across the state also had a noticeable impact for legal dispensaries, Kagia said, echoing a point made by Gov. Kathy Hochul and New York City Mayor Eric Adams last week when they announced a cumulative 1,000 illegal marijuana stores had been closed.

For the second quarter of 2024, Kagia reported, legal marijuana sales surged to more than $160 million, which he said was a direct result of the crackdown on illicit shops.

“We’re certainly seeing a gap as the illicit shops are being shut down. We’re hearing from our retailers who are saying, there are a lot of consumers coming into the legal shops now that the illicit shops have been sealed,” Kagia said. Just last month, the New York market crossed a sales threshold of $17 million per week.

“As a result of these enforcement efforts, legal cannabis retailers downstate, particularly those who have been open for more than 12 weeks, have reported a more than 100% increase in their sales in the 11 weeks since the beginning of May through mid-June,” Kagia said.

Unhappy licensees

Despite the progress, the board members got yet another earful from a string of cannabis business licenseholders who said they’ve been in limbo for months, waiting for final approval from the OCM, including some of the 463 Conditional Adult Use Retail Dispensary (CAURD) licensees who got their permits in 2023.

One such CAURD licensee, who said he has a retail shop called Simply Green, said he got his “final review” by OCM inspectors in March this year after receiving his retail permit in July 2023. But there’s been no update since then, he said, which has been costing him and his partners tens of thousands a month in rent.

“We’re up here trying to figure out what’s going on. We’re hemorrhaging $25,000 a month. We’re $2.1 million in the hole,” the CAURD licenseholder said. “Compliance said April 10 was our opening date. We’re in August. What’s going on?”

Similarly, a representative of the Long Island Cannabis Coalition told the board that zero CAURD licensees from Long Island had yet been approved to open for business.

“To date, no one from Long Island has received one,” he said.

Another retail permit holder who applied during the November window last year said his location was rejected last week after having been on track for months. Now he’s lost the “proximity protection” for approved retailers, meaning he’ll likely have to find a new site for his dispensary.

“To get that email the other day was really stunning. Didn’t see that coming,” the man said.

A woman who also said she was in the November cohort of license applicants reported being “skipped” in the queue for her paperwork to be reviewed by the OCM, telling the board, “We want to ensure our application isn’t lost in the void.”

“We’ve been bleeding money when it comes to these contracts,” the woman said, listing off various vendors that retail applicants have had to pay for to obtain proper permits.

Another hopeful retailer said he’d had a “virtual inspection” by OCM staff in April, but since then, “We’ve received no further communication.”

“Since our virtual inspection, we have paid over $100,000 in rent. This is on top of the money we invested in building our location, and the countless other monthly expenses, such as insurance,” the licensee said. “Aug. 1 just passed. Another rent payment was due… Please bring this delay to an end.”