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Despite an ongoing court injunction keeping New York regulators from acting on every marijuana business license type, the state’s Cannabis Control Board approved another 74 adult-use permits at its monthly meeting on Friday. The board also advanced new potential regulations governing where dispensaries will be able to set up shop.
The CCB unanimously approved the slate of new permits, which included:
16 retailers
Three conditional retailers
10 microbusinesses
Six distributors
39 processors
At the meeting, Patrick McKeage, chief operating office of the state Office of Cannabis Management, told the board, the OCM has issued more than 240 final conditional adult use retail dispensary (CAURD) permits to date, which leaves 300 still trying to lock down sites.
McKeage added that the OCM has reached number 2,000 out of applications submitted in the so-called “November queue” of would-be retailers, referring to the pool of applicants from 2023, leaving about 150 left in that group to review.
The office will then move onto the “December queue” of applicants for licenses of all types, he said, which included another roughly 5,000 license applications.
When presenting the licenses for approval, McKeage ran into pushback from CCB Chairwoman Tremaine Wright, who questioned why the OCM had not included any new cultivators this month.
“The office has reached the licensing targets that were initially communicated to the public,” McKeage began answering – the OCM has already approved 200 adult-use growers – before Wright cut him off.
“The board has never communicated any licensing targets. We agreed that we would review the rollout and make determinations,” Wright asserted, and again asked why no more growers were included in the February licensing package.
“We’re at the point where we need further direction from the board,” McKeage said, noting that the CCB had previously said it wanted to be careful not to oversaturate the New York marijuana market. “We do not want to make a mistake and go farther than the board may intend before getting more clarity in terms of the number of applications to review.”
New oversight, enforcement powers
The CCB also on Friday gave the thumbs up to several new oversight and enforcement powers for OCM staff, including unanimous support for the agency’s new Trade Practice Bureau and new subpoena powers to tackle enforcement against rulebreakers in the market.
The Trade Practice Bureau, OCM Executive Director Felicia Reid said, will be focus on white collar violations such as product inversion, predatory lending and illegal license stacking.
Reid said the approach from the Trade Practice Bureau will be an “iron fist and a velvet glove” to protect “the integrity of our market.” She added that the new approach was due to “alarm bells across the industry.”
The new subpoena power granted to OCM will also help with enforcement action by letting agency investigators “hold hearings, subpoena witnesses, compel their attendance, administer oaths” and more, Reid said.
Another proposed set of rule changes, related to variances for retail applicants who are want formal permission to bypass the zoning setbacks set into state law, was also advanced so that the CCB could jumpstart a new public comment period. The rule changes were to the “public convenience and advantage” or PCA regulations, which allow for the CCB and municipalities to exempt retailers who apply from the requirement that no two or more dispensaries be within 2,000 feet of each other in smaller towns or within 1,000 feet of each other in major cities like New York City.
The proposed rule changes would:
Bar any retailer from even requesting a PCA change unless the distance in question is more than 500 feet within a city of less than 20,000 residents or more than 1,000 feet in a city of more than 20,000 residents.
Prohibit a PCA request if there are already two or more of the same cannabis business license type within the geographic area in question.
Put the onus on business applicants to prove that New York has an “economic interest” in letting the company set up where it’s requesting.
Create a process to notify all relevant stakeholders – such as other cannabis companies – to any PCA request.
The PCA proposal created a strong division among member of the CCB, however, with Wright calling the new draft rules “well beyond what we were supposed to be thinking of,” while new CCB member Brad Usher said the proposal was “a strong step in the right direction.”
Ultimately, the board split on the proposal, with Wright voting against advancing it, but other members supporting it, which will launch a 45-day public comment period once the draft is published in the state register.
Sales plateau in January
New York’s cannabis sales were down a bit to begin 2025, OCM Policy Director John Kagia informed the CCB, following what he called a “blockbuster” December sales month. So far this calendar year, New York dispensaries have sold just $110.1 million worth of cannabis, which Kagia said was a “slight downtick.”
“I fully expect this is going to be a slight dip, and we will resume very strong velocity we’ve been seeing,” Kagia said.
“If we just replicated that for the next 12 months, we’d do well over $1 billion just for this year. I think we’re going to end up this year well above that, because that only accounts for the stores that are currently open,” Kagia said. “We remain really bullish about the outlook for this market.”
That said, Kagia admitted there has also been a slow and steady decline in the average sales numbers per dispensary, which he said is natural as more and more shops open their doors to the public. As of Friday, there are now 307 operational adult-use dispensaries scattered across the state, and Kagia had previously forecast that number will grow to 625 this year, with an eventual statewide goal of about 2,000 dispensaries.
Average revenues per store dipped to about $323,000 per month, Kagia reported, down from a high of $2.1 million per month when the market was new in January 2023.
Those sales figures and the ongoing competition from the illicit market are still a major hurdle, said David Nicponski, the owner of Freshly Baked NYC dispensary in the Bronx.
“Enforcement across our state is woefully inadequate. For example, there are more unlicensed cannabis retailers within five blocks of our dispensary than there were when we opened for business nine months ago. And there’s another one that will be open in another week or so,” Nicponski told the CCB. “This is not a success story for New York. This is a failure and will seriously damage retailers.”
Nicponski added that the sales numbers Kagia shared were “disastrous,” which led him to predict that “many or most of these businesses will fail. That is not a cynical or pessimistic opinion; it is a simple math equation.”
“}]] [[{“value”:”The Cannabis Control Board also granted regulators stronger enforcement powers to address the illicit market.
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