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New York marijuana regulators on Thursday gave the thumbs up to another 141 new adult-use cannabis company permits, and for the first time since 2015 added a new trio of vertically integrated licenses to the medical side of the industry, on top of the existing nine “registered organizations.”
The move is another significant expansion of the state’s legal cannabis market, which is still ramping up and increasing sales on a weekly basis, staff from the Office of Cannabis Management told the Cannabis Control Board during the meeting.
The total number of adult-use marijuana permits issued thus far in 2024 is now at 1,132, which OCM Chief Operating Officer Patrick McKeage called a “really exciting milestone, the first time we’re over a thousand.”
The new permits approved Thursday included:
27 retailers
12 microbusinesses
15 growers
16 distributors
71 processors
The OCM is still working through applications that were filed last year.
Meanwhile, the recreational market continues to heat up, OCM Policy Director John Kagia told the board, with $696.2 million in total sales as of early October. Sales have accelerated at a pace of about $10 million per week since May, when a statewide crackdown on the unlicensed cannabis market began.
“Really exciting momentum here,” Kagia said. “If we maintain that through the end of the year, open question as to whether we’ll hit that $1 billion mark, but … we’re accelerating toward that number very, very quickly.”
Kagia also told the board that there are now 210 fully legal recreational cannabis dispensaries operational – including 94 in New York City and Long Island, and 116 upstate – stocking 476 legal marijuana brands, which he said was “really a good signal” that things are heading in the right direction.
“We’re very bullish about the continued growth of this market,” Kagia said.
Medical in focus
Kagia also noted that thus far, the nine R.O.’s that have been operating in New York have captured just 12% of the recreational market share, which he suggested means the three-store maximum is working to restrain the bigger companies, as policymakers intended. According to a report filed with the legislature by the OCM earlier this month, only four of the nine have opened adult-use retail shops so far, while the rest have decided to wait.
The three new R.O.s – as medical marijuana companies are called in New York – will be allowed to vertically integrate, as the other existing nine are, but they do not yet have approval to launch retail operations, the CCB noted. Acting OCM Chief Equity Officer Tabitha Robinson said the office aims to bolster the medical presence of the industry, particularly in upstate New York where there’s a dearth of medical-specific cannabis shops.
The trio of new R.O.s includes:
Nonna Farms LLC
NYRO Partners LLC
VNY-Ops Inc.
Kagia said the three are “intended to be social equity R.O.s,” with a demonstrated commitment to diversity, equity and inclusion goals.
“We see this as an access issue. Patients are not getting the access they need for their medication,” Robinson told the board.
But news of the R.O. expansion wasn’t greeted with universal happiness among stakeholders at the meeting. CCB member Dr. Jennifer Gilbert Jenkins questioned whether the state was giving away more power to big companies than was proper.
“We have over 200 stores open, we have nine licensed R.O.’s, and nine out of 200 is not 12%,” Gilbert Jenkins said. “It looks like the R.O.’s are more than double their share of the percentage here than the number of stores that we have … I want to make sure we’re keeping our eye on this as we are allowing more R.O.’s into the market.”
Kagia also said cannabis companies should stay tuned for more news coming soon on the expected seed-to-sale inventory tracking system, which will monitor all legal marijuana products through the supply chain.
“We’re in the final stages of what we call user-accepted testing. Just making sure the thing works the way we’ve designed it to,” Kagia said.
Implementing change
The CCB also received an update on where implementation of policy recommendations from a scathing audit earlier this year stood, following a report from the Office of General Services that found a wide array of flaws in the market rollout. Emily Steinbach told the board that the OCM now has more than 200 employees and is on pace to 245 by the end of the year. That includes 29 new staffers dedicated to licensing alone, for a total licensing team of 48 staff.
“We’re getting the bodies we need,” Steinbach told the CCB.
Steinbach also said the OCM is making progress on several other key changes, such as establishing a “single point of contact” for each license applicant, and improving communications processes for stakeholders.
The CCB also signed off on a few technical changes in ownership structures for two R.O.s, specifically RIV Capital-owned Etain and Acreage Holdings-owned NYCANNA.
After the meeting, RIV Capital celebrated the news as it will allow a merger with Cansortium to proceed. A spokesperson said that the merger is expected to close sometime in the fourth quarter this year.
“Together, the combined company’s footprint will span a number of states on the cusp of potential exciting regulatory developments, including Florida, New York, Texas, and Pennsylvania,” the spokesperson wrote in an email.
“}]] The Office of Cannabis Management also provided an update on the implementation of policy recommendations from a scathing report earlier this year. Read More