New York Officials Issue 99 Additional Adult-Use Dispensary Licenses

The New York Cannabis Control Board (CCB) approved 99 additional Conditional Adult-Use Retail Dispensary (CAURD) licenses April 3, bringing the total number of provisional dispensary licenses in the state to 165, according to a press release from the Office of Cannabis Management (OCM).

The CCB also approved one additional testing laboratory permit for Certainty Analytical Labs in Rochester, bringing the total number of permitted medical and adult-use cannabis testing labs to 13.

Thirteen of the CAURD licenses went to applicants in regions that were previously blocked from receiving licenses due to litigation.

As required by New York Gov. Kathy Hochul’s previously announced Seeding Opportunity Initiative, the 99 new CAURD licenses were awarded to those deemed most impacted by the war on drugs, including those with past cannabis-related convictions and nonprofit organizations with services that support formerly incarcerated individuals.

“We are proud of today’s approval of 99 CAURD provisional licenses, marking a vast expansion of the Seeding Opportunity Initiative as we continue to build an equitable market that offsets harms caused by cannabis prohibition and its disproportionate enforcement,” CCB Chair Tremaine Wright said in a public statement. “These new licenses will allow entrepreneurs to fairly participate in the legal market while promoting innovation and creative diversity throughout New York’s ever-growing cannabis supply chain and we’re thankful for the ongoing support of Gov. Hochul and the Legislature for helping us reach this day.”

Among the licenses awarded Monday were four for Western New York, one for Central New York, five for Mid-Hudson and three for Brooklyn, marking the first CAURD licenses issued in these regions after a court injunction that blocked the CCB from issuing the licenses was modified last week.

RELATED: 4 New York Regions No Longer Under Injunction Blocking Cannabis Retail Licenses

The injunction relates to a lawsuit filed in September 2022 by Variscite NY One Inc., which applied for a CAURD license but was deemed ineligible because the company, based in Michigan, “is [51 percent] owned by an individual who has a cannabis conviction under Michigan law” and “has no significant connection to New York.”

Variscite argues in its lawsuit that New York’s approach to prioritize local farmers and business owners in its adult-use cannabis licensing process discriminates against out-of-state cannabis operators and violates the U.S. Constitution’s dormant Commerce Clause.

RELATED: New York’s Cannabis Licenses Latest Target of Commerce Clause

As a result of the lawsuit, U.S. District Court Judge Gary Sharpe issued a preliminary injunction in November that blocked 63 licenses in five regions, and in January, Sharpe denied the OCM’s motion to reconsider the freeze on licensing as well as a motion to dismiss the lawsuit.

With the issuance of the additional CAURD licenses on Monday, the CCB has now issued at least one license in each region except the Finger Lakes, where nine licenses remain blocked by the injunction.

Seven adult-use dispensaries are currently operational in New York.

RELATED: New York's First Woman-Owned Adult-Use Dispensary Opens

“We are thrilled to announce the addition of 99 more CAURD provisional licenses as we continue to work swiftly and equitably to establish New York’s cannabis industry,” OCM Executive Director Chris Alexander said in a public statement. “The approval of these licenses will help expedite building a robust and diverse supply chain while also ensuring that individuals that have been disproportionately impacted by cannabis prohibition have meaningful opportunities to participate in the industry.”

New York officials announced last month that they will nearly double the number of total adult-use dispensary licenses issued during the state’s first licensing period; while regulators initially planned to issue up to 175 total CAURD licenses to as many as 150 individuals and 25 nonprofit organizations, they now plan to issue 300 total licenses.

Meanwhile, the OCM has for the second time failed to meet its deadline to create a social and economic equity plan, according to a local Syracuse.com report.

The plan, required by the Marijuana Regulation and Tax Act (MRTA) and meant to guide the rollout of the adult-use cannabis industry, must be drafted and overseen by OCM Chief Equity Officer Damian Fagon, the news outlet reported.

The plan must define the criteria used in issuing licenses; determine which communities were most impacted by cannabis prohibition and are therefore eligible for grants; provide guidance for the issuance of additional medical cannabis licenses; review cannabis social equity programs across the country to glean lessons learned and best practices; and summarize key findings from community roundtables and stakeholders, according to Syracuse.com.

The MRTA required the social and economic equity plan to be completed by Jan. 1, 2023, according to the news outlet. When the OCM missed that deadline, regulators indicated that they would release it “in the first quarter of 2023,” Syracuse.com reported.

An OCM spokesperson told the news outlet this week that the plan has yet to be completed due to regulators taking additional time to consider “invaluable public input,” but the plan is “nearing completion.”

“We are excited to share it with the public to inform them of the path forward to expand on the momentum we have with our nation-leading Seeding Opportunity Initiative and the equitable market we are building,” the spokesperson told the news outlet.

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