New York set to open marijuana business applications Oct. 4

State officials approved regulations Tuesday that will open the recreational pot field to all businesses, the move coming as a court halted their attempt to achieve social equity goals with earlier licenses.

The Cannabis Control Board, which approves industry rules and licenses, unanimously voted in favor of rules for several types of businesses, including recreational growers, processors, distributors and retailers. The board also approved application templates; the state published mock-ups of them on Monday and plans to make them available online as early as Oct. 4, regulators said. Applications for retail dispensary licenses will be open for 60 days. The state hasn't said how long other applications will be open. 

In an effort to quickly compete with hundreds of illicit pot shops, the state will fast-track retail applications that include a secured location, according to Christopher Alexander, executive director of the state Office of Cannabis Management, which oversees marijuana companies. 

"Today is a day of mixed emotions for many who are excited to see the market launch," Alexander said, while acknowledging the challenges facing the first batch of licensees, many of whom served time behind bars for marijuana offenses. "We will continue to work diligently to realize … what it represented for New York to take that necessary step of starting a market in a way that nobody else had, with those who had been most impacted and with our small farmers," he said. "Our commitment has not wavered, and it will not."

The state started a "conditional" or initial licensing program in April of 2022. Under the initiative, farmers and processors involved with hemp — which comes from the same type of plant as marijuana — were authorized to work with recreational marijuana. In November, the state began issuing retail licenses to New York business owners who were — or are related to someone who was — convicted of a marijuana offense.

Three dozen vendors have conditional licenses to open on Long Island, but just one shop has opened, Strain Stars in East Farmingdale. Dispensaries are forbidden in most localities on the Island, and zoning rules have made it difficult to find storefronts in municipalities open to pot shops.

The conditional retailers have also been constrained by two court cases alleging that regulators ignored their obligation to open applications for all initial dispensary licenses at the same time. The court issued a restraining order that has prevented state agencies from working to get conditional vendors open since early August.

Veterans challenge state program

Four military veterans argued in court that the conditional program undercut the social equity prioritization they were entitled to. By law, regulators must give priority to applications from veterans disabled during their military service, distressed farmers, minority and women-owned businesses as well as people from communities disproportionately impacted by enforcement of the old marijuana laws.

In court, the state argued its conditional program provided "extra priority" to New Yorkers directly impacted by marijuana prosecutions and from communities with high enforcement rates, as required by law. Regulators have always planned to prioritize all social equity groups when the industry moved beyond the conditional phase.

Several parts of the new regulations were designed to limit the reach of bigger medical marijuana firms and give newcomers a better shot at success, regulators said. Investors can't acquire a significant ownership stake in a large number of some license types. The rules also force most companies and investors to stick to either the supply-side or the retail-side of the field. 

Medical marijuana firms, which tend to be publicly-traded and have operations in multiple states, may seek permission to enter every part of the recreational market — from seed to sale. Regulators initially planned to prevent them from opening their dispensaries to recreational consumers until late 2025, to give small entrepreneurs a chance to get established. But the board ultimately moved that date up to late 2023, provided that medical firms pay the state a $20 million entrance fee.

At Tuesday's meeting, many retailers urged regulators to hold medical marijuana firms back, saying they had the funding and infrastructure to dominate the market.

On Long Island, all of the medical dispensaries appear to be ineligible to serve recreational consumers under zoning rules. 

"We're in a bad spot every which way," said Brian Stark, a Merrick resident who has a conditional retail license. "I can't do anything until this restraining order lifts. We're stuck."

By Sarina Trangle

sarina.trangle@newsday.comSarinaTrangle

Sarina Trangle covers affordability and cost of living issues and other business topics. She previously worked as an editor and reporter at amNewYork.