During a tense meeting of New York’s Cannabis Control Board on Wednesday, officials signed off on more business licenses and a set of revamped regulations. The board also celebrated the slow but steady growth of the legal marijuana market, despite the gathering being tinted by sarcasm and sniping between fellow regulators.

The board gave unanimous approval to 109 new recreational cannabis business permits, including:

• 21 dispensaries.
• 23 growers.
• 20 distributors.
• 23 microbusinesses.
• 22 processors.

That brings the total number of permits issued this calendar year to 729, not including the 463 justice-involved conditional adult use retail dispensary (CAURD) permits given out last year.

Only 144 dispensaries are currently operational across New York, the OCM noted, though many more are on the way.

OCM staff also indicated that it’s likely that the current pace of licensing will maintained for the next few months, even as the agency’s new interim director, Felicia Reid, continues to transition into running the agency.

Thus far, one staffer told the board, the agency has fully reviewed 1,306 of the 1,850 applications submitted by mid-November last year for dispensary permits, and another staffer estimated that it takes the office about 60 days on average to complete reviews once they’re begun.

But, OCM Policy Director John Kagia noted that no decision has yet been made as to how the December queue of retail applicants – which includes another 4,303 license applications – will be handled.

“That work is still ongoing, because we still have quite a few applications to process from the November queue. It’s still a little bit premature to determine the strategy we’re going to implement for the December queue,” Kagia said.

New rules

Also on Wednesday, the board signed off on a yet-to-be-finalized new set of rules that will give New York cannabis shops more options when it comes to advertising, which Kagia said was a result of industry feedback. The move would provide another tool for licensed cannabis companies to fight against the illicit market.

“It’s critical that we strengthen our market’s ability to compete, even while we maintain our focus on public health and safety,” Kagia said. “There’s no need to artificially restrict the market on issues that are not compromising public health and safety, so we’ve taken that feedback to heart.”

Major changes to the rules include:

• Allowing cannabis ads and packaging to use “bright colors and bubble letters,” which Kagia said was too difficult to police effectively.
• Repealing a ban on marijuana retail promotions based on price discounts and loyalty programs.
• Providing incentives to not rely on single-use plastics, such as plastic pre-roll tubes, to promote sustainable environmental practices.
• Allowing more digital cannabis ads through “age-gated” online communities, so marijuana companies are better able to ensure their ads are directed to those over 21 years of age.
• Increasing outdoor retail signage limits to three signs not affixed to shops and an unlimited number of signs on retail buildings.
• Allowing dispensaries to use billboards to advertise their locations and contact info, but not for other promotions.

The proposed regulations still have to go through a 45-day public comment period before they go into effect for the industry, Kagia noted, and added there will be a “phase-in period” for the updated rules.

“We will give people time … before we require full compliance,” Kagia said.

Sales jump as crackdown continues

New store openings every month “dovetails beautifully” with the ongoing enforcement by both state  and city officials against illegal unlicensed marijuana shops, of which CBS recently estimated there were still 3,000 in the five boroughs of the Big Apple.

The state task force dedicated to shutting down the illegal marijuana market has thus far padlocked 164 locations, conducted 323 inspections, and seized over 23,000 pounds of illegal marijuana products with a street value of $104 million, said task force spokesman Daniel Haughney. He also noted that a separate New York City-run crackdown has padlocked more than 400 illegal shops in the city.

As a direct result of the effort, according to Haughney and Kagia, legal dispensaries have seen a sales boom of 50% between the last week of May and the final week of June, which alone saw a sales increase to $15.1 million from $13 million.

“We have seen material impact on our retailers as we have shut down illicit operators,” Kagia said. “There’s quite a few people who are coming to discover (licensed dispensaries) because the sources they used to purchase from have now been shuttered.”

That’s contributed to a new and steadily growing total sales number of $421 million since the recreational market launched in December 2022, including $71.4 million in the month of June, up from $46.6 million in May.

“In Q2, we made the same amount of money we made in all of 2023. If that isn’t an indication of momentum, I don’t know what is,” Kagia said.

Board tensions

The typically congenial CCB meeting was marked by open arguing and sniping back and forth between multiple board members, primarily between Adam Perry and Dr. Jennifer Gilbert-Jenkins, as Perry heavily questioned OCM staff throughout the meeting and tried to shift blame for the market rollout away from the agency.

Early in the meeting, Perry suggested that the CCB was “wasting time” with a pair of resolutions to deny business license applications; both the resolutions were tabled. Perry then pressed OCM Deputy Director Patrick McKeage on how long it takes the agency to fully review the average cannabis business permit application. McKeage said takes about 60 days and that the agency has been averaging about 115 licenses per month for approvals.

Perry said that seemed off, given that the New York State Liquor Authority often takes six months or more for run-of-the-mill liquor shop permits.

“I just wonder why some people have this impression, that it’s like a nightmare, that you’re not granting any licenses and that it takes forever,” Perry said. He later added that he doesn’t believe the OCM is “capable of or responsible for stemming that tide” of unlicensed shops.

Perry got into a slight tiff with Gilbert-Jenkins when he questioned whether the OCM had developed a reputation for nonresponsiveness among stakeholders because it was focusing too much time and effort on licensing.

“I’m wondering if the reason the State Liquor Authority is able to answer the phone all the time and give answers to everyone … is because the SLA is taking six months to process and grant licenses, while we’re doing it in many cases in 60 days?” Perry asked.

Gilbert-Jenkins shot back, “Adam, you have to stop repeating that. We are processing licenses of people who have applied in November and December. I don’t care what day they’re open. We don’t take 60 days. Stop repeating that.”

Perry countered, “I understand your intent to defame and to stifle people from talking, but I think that maybe (the Office of General Services) should look into that instead of this. And I’m not going to tell you to stop repeating some of the things that you say, no matter how much I and other people may like to.”

Applicants still waiting

There was another common refrain during Wednesday’s public comment period from cannabis license applicants that are still waiting to hear from the OCM and CCB on their paperwork. In particular distress are retail applicants who locked down locations prior to applying back in November, who have been paying rent while not being allowed to actually sell marijuana.

One applicant said he’d burned through $80,000 for rent on a shop that he has no idea if he’ll ever be able to monetize.

Others echoed the same situation.

“Rent is due, rent is due, rent is due. At this point, my pockets are empty. All I can afford is White Castle,” one applicant from November told the board, while asking for an update on his status.

“What we really need is to have a line of communication, because I have a lot of questions and I can’t get them answered,” another license hopeful said. “We need help. We can’t hold down a $10,000 or $12,000 rent. It’s impossible.”