New York’s Cannabis Advisory Board issued a controversial and non-binding suggestion to the Cannabis Control Board to impose a “temporary” limit of 1,600 marijuana dispensary licenses issued by the state. They insist it is not a permanent license cap, rather, just a protective measure to prevent saturation of the fragile adult use industry to provide new dispensaries time to become established and profitable before facing so much competition. To date, the New York Office of Cannabis Management (“OCM”) has not adopted the suggestion, but it has also not rejected the idea entirely.
While the suggestion may be well intended, it is yet another official act that could bring more litigation and delay to the licensing process. Since the current licenses and pending applications heavily favor social equity applicants, the result would be to slow the entrance of the general public into the dispensary industry. It would also unfairly impact applicants who invested in the opportunity to apply for a dispensary license when there were no such limits – and they may not have signed leases or applied for licenses if they knew there would be a cap.
I believe that the market will self-regulate in the same manner as it does for wine and liquor stores, or even bars and restaurants. Free enterprise market forces and consumer demand will determine how many adult use dispensaries can be supported in each market. The US is a free market economy, and New York operates under these same principles. New York has not established “caps” on the number of licenses in the closest industry- alcohol – and that has lowered barriers to entry and resulted in a robust craft beverage industry.
The industry predicts 2025 will be a great year for the cannabis business. If you’d like legal guidance for a new dispensary, please contact our office as we would be honored to provide you legal guidance to help open and operate a successful dispensary in New York.
Tracy Jong is a Senior attorney at Evans Fox LLP with 30 years of experience focusing her practice in business law, intellectual property and licensing for alcohol and cannabis. Tracy Jong is a member of the New York Bar and is a registered attorney at the United States Patent and Trademark Office. She can be reached at [email protected].
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The content has been prepared for informational purposes only; it should not be construed as legal advice, does not create or constitute an attorney-client relationship, and readers should not act upon it without seeking professional counsel.