Pot dispensary applications to open this summer

Recreational cannabis dispensaries are one step closer to taking off under regulations approved Thursday, though some potential applicants complained the hurdles to qualify have been set too high.

The regulators aimed to allow New Yorkers to apply for the first batch of retail licenses this summer, paving the way for legal recreational sales before the end of the year. The initial "conditional" credentials will be reserved for New York business owners who were impacted by the prohibition of marijuana and vocational nonprofits, according to the state Cannabis Control Board, which approves medical and recreational marijuana policy.

Regulators have said they anticipate between 100 and 200 firms qualifying for conditional licenses. The state is launching a $200 million fund to help entrepreneurs who secure this credential find, lease and set up shops. 

Board members said the license will ensure people penalized during prohibition are not pushed out because of their records and have a chance to get positioned before others join the industry. Law enforcement officers on Long Island and in other communities across the country have historically arrested Black and Latino people for marijuana offenses at higher rates than their white counterparts. 

“This is a tremendous stride in the right direction,” said Cannabis Control Board Chair Tremaine Wright. “We are leading with equity.”

But Long Island cannabis entrepreneurs told Newsday the qualifications are so specific that the state risks undercutting the population it aims to support. To qualify, businesses must show that “justice-involved” entrepreneurs completely control the operation and own at least 51% of the venture, according to Aaron Ghitelman, spokesman for the Office of Cannabis Management, which oversees marijuana businesses.

This demographic includes New Yorkers with marijuana-related convictions, people charged with cannabis offenses and ultimately convicted of something else — and their relatives. They must also have owned at least 10% of a business that turned a profit for two years.

“Out of over 100 that I’ve spoken to, I don’t know one single person that qualifies,” said Osbert Orduña, a Suffolk resident who is on the executive board of the tristate chapter of the National Hispanic Cannabis Council trade organization and a member of a similar state group. “I don’t know anyone at all — zero.”

Orduña, who grew up in public housing in the city, said being stopped and frisked by police was “a daily part of life” for him and his peers. He said many New Yorkers were taken to police precincts because they had marijuana, but were ultimately charged with loitering, trespassing or disorderly conduct. They won’t have the paperwork to qualify, unlike, say, an affluent Long Islander whose parent got a citation for smoking a joint on Jones Beach, he said.

“Our communities were Ground Zero for cannabis prohibition,” said Orduña, who hopes to open The Cannabis Place-branded dispensaries in New Jersey and on Long Island. He said those better-off  “never set foot in a disadvantaged community, never dealt with stop-and-frisk."

The trade group Cannabis Association of New York suggested changes to the business-experience requirements for the conditional license, and the state incorporated its feedback, according to Carmine Fiore, a Levittown resident and chair of the group’s veterans committee.

Applications will open later this summer — sometime after early August, Ghitelman said.

An application mock-up published by the state spans more than 50 pages. In it, regulators ask for employer identification numbers issued by the federal government and information on owners and investors, as well as any parent companies, subsidiaries and affiliates. Submitting the paperwork comes with a $2,000 fee.

The state assumes most licensees will rely on the support  fund to find retail space, Fiore said. As dispensary locations are identified, regulators will determine how many dispensaries can be issued on Long Island and in a dozen other regions, he said.

Several Long Island localities have chosen to forbid dispensaries; others are using zoning to limit their options. The "unwelcoming" stance has entrepreneurs like Jessica Naissant, of Valley Stream, eyeing locations in the city.

“They're [localities] essentially trying to push all cannabis businesses to an industrial area,” said Naissant, who envisions applying for the conditional dispensary license with a cousin. “When they do that, they essentially give the gray market and the legacy market the green light.”

Clarification: A previous version of this story didn't indicate that the state accepted the changes to the business-experience requirements requested by the Cannabis Association trade group.

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.