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Sunday, January 29, 2023

What to expect in the NY legal cannabis market in 2023

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If 2022 was the year in which New York set up the basic infrastructure for the state’s legal marijuana industry, 2023 will be the year regulators and others try to fully build it out.

The state celebrates its first legal adult-use cannabis sale today. Stakeholders in the industry say they’re looking forward to seeing the market open to general license applicants (rather than conditional) and getting more clarity on such issues as how the adult-use and medical markets will interact. They also hope that towns that opted out of cannabis commerce will reverse their decisions.

“There’s no perfect process, so the fact that the Office of Cannabis Management and Cannabis Control Board have really taken their assignments seriously and have put in a lot of work in trying to get things off the ground was really a high point of 2022,” said Frederika Easley, director of strategic initiatives at The People’s Ecosystem. “There is still some unfinished business in terms of how medical operators are going to be able to enter the adult-use market,” among other issues.

Easley and others said that in 2023 and beyond, they’ll closely follow how New York’s medical and adult-use cannabis markets coexist, and how OCM handles multiple sticky issues. A major concern for Easley, a staunch advocate for social equity in the industry, is the way in which the state’s 10 registered medical cannabis organizations (RO’s) – all but one of which are large, multi-state operators – will be allowed to participate in the adult-use market.

Over the next year, Easley said, she’ll be interested to see whether the state will require ROs to make contributions to the community to enter the adult market. She also thinks the state shouldn’t allow ROs that are not compliant with regulations that rule the medical market to expand into adult-use.

The OCM’s compliance and mentorship program, which requires conditional cultivators to coach and advise legacy growers and others on how to run a cultivation business, could be a bright spot, Easley said.

“We’re hoping this is going to be an opportunity to safely bring in people who have experience” on the legacy market, Easley said.

When it comes to the medical market, Tim Mitchell is hoping for more clarity on patient access. One of the major highlights of 2022 came Oct. 5, when medical patients won a long-fought victory when the state started allowing them to grow weed at home, Mitchell said. While that progress is meaningful, Mitchell and other patient advocates are keeping an eye on patient access in 2023.

It’s not yet clear if the state will permit medical dispensaries to sell products like chocolates and weed-infused beverages, Mitchell said. If medical patients have to buy these from adult-use dispensaries, many will likely return to the illicit market.

“As things stand right now, I do not believe that med patients can make purchases at any CAURD or future adult-use store without having to pay adult-use taxes,” Mitchell said. “We definitely feel like we’ve been kind of ignored historically, but now a lot of us are not going to be open to paying adult-use taxes when there’s gray market sources who give us what we want.”

Mitchell also hopes that the OCM will set realistic rules that ensure an adequate supply of legal cannabis for medical patients. Additionally, he’d like OCM to approve more registered medical operators as they license new adult-use businesses.

“There’s no reason why medical expansion shouldn’t be progressing hand in hand with the adult-use rollout,” Mitchell said.

The OCM’s plans for 2023 certainly include work on the state’s medical program, among other focuses, according to a statement the agency gave NY Cannabis Insider. One priority is launching an auto-registration process for medical patients, which should improve patient access, OCM said. Cannabis regulators also expect the opening of more medical ROs across the state.

Public education will be another OCM focus, including campaigns about the realities of cannabis as opposed to anti-weed propaganda, and the differences between regulated and illicit products.

OCM plans several milestones next year.

“The first crop of indoor-grown cannabis in sustainable mixed light greenhouses will be harvested, the Office’s Social and Economic Equity Plan will be unveiled, the permitting of additional testing laboratories, and the opening of over 100 new retail dispensaries will come to fruition,” OCM said.

Public education seems to be paying dividends on Long Island, where the vast majority of municipalities have opted out of cannabis commerce, said Beryl Solomon.

Solomon, who runs a CBD-focused ecommerce business called Poplar and plans on applying for an adult-use retail license, has spent about a year talking to municipal stakeholders in New York’s most populated region about their concerns surrounding legal weed.

When she first started trying to win hearts and minds in places like Long Beach, some in the community ardently opposed any cannabis businesses, she said. But lately their responses to developments in the state’s legal weed industry seem muted.

“When they said there were going to be up to 20 (CAURD) dispensaries on Long Island, you didn’t hear an uproar,” Solomon said.

Further, Solomon believes that many communities on Long Island will opt-in to cannabis commerce once they see how it affects other municipalities.

“I do think that there is a wait-and-see approach that many municipalities have taken,” she said, “and I think that it’s good for the industry that there hasn’t been continued uproar at every milestone.”

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On the legislative side, state Sen. Jeremy Cooney said he thinks lawmakers will take up measures on enforcement for illicit gray market operators. He also thinks the State Assembly and Senate should play a greater oversight role in the industry.

While Cooney praised OCM’s achievements over 2022, there were some issues with the agency’s communications, especially pertaining to the planned timeline for opening the adult-use market.

“I think issues like timelines and setting expectations are kind of a moving goal post for the OCM,” Cooney said. “I think more oversight by the State Assembly and Senate would provide a better opportunity for a positive and collaborative relationship so that our goals are being met.”

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