New York State says up to 20 more pot shop licenses up for grabs

State regulators announced they're doubling the number of "conditional" or initial licenses available to recreational marijuana dispensaries on the Island, bringing the total from 20 to 40. 

The state Office of Cannabis Management, which oversees the industry, will give up to 300 licenses  — twice as many as the 150 initially set aside — for conditional retail businesses across the state, executive director Christopher Alexander said Thursday.

The expansion comes as hundreds of illicit pot shops are now catering to consumers. Alexander said his team decided to quickly establish more authorized and regulated alternatives. 

"Through this expansion, we will see more dispensaries open across the state, providing more opportunities for residents to purchase safer, legal products, which have been tested and passed New York State's stringent health and safety requirements," Alexander said. 

He said his agency aims to send applications for "the majority" of the remaining 300 potential licensees to the Cannabis Control Board for final approval next month. This would likely exclude applicants in a few regions, where the process has been halted by a court case. 

To qualify for these licenses, New Yorkers must have been convicted of a marijuana offense — or be related to someone who was convicted of one — and have owned a business that turned a profit for at least two years. 

The state's move was cheered by local cannabis entrepreneurs. 

"Thank you," Jessica Naissant, a Valley Stream resident who has applied for a conditional retail license, said while testifying before the Cannabis Control Board Thursday. "It's clear that you guys are listening and you guys are pivoting and doing your best to help us out."

Osbert Orduña, of Suffolk County, said he wished he was at the meeting, so he could give the announcement a standing ovation. 

"It's phenomenal," said Orduña, who won a license to open a dispensary in Queens. "It's going to create additional opportunities for employment and economic development."

News of the additional licenses was not as welcome in Brookhaven, one of four towns on the Island that has decided to allow recreational cannabis shops.

"Brookhaven is concerned about this expansion of recreational cannabis, which is why the town put in place zoning regulations to restrict recreational sales to industrially zoned properties, away from residential areas and downtown retail centers," town spokesman Jack Krieger said in a statement. 

Southampton Town Supervisor Jay Schneiderman said he doesn't think more state licenses will change how many stores open in the area because the town hasn't yet passed zoning regulations to lay out where dispensaries can open.

In the initial, conditional phase, the state is prioritizing retail applicants harmed by the prohibition of marijuana and farmers and processors who have worked with hemp, which comes from the same species of plant as marijuana.

Once applications are open to more businesses, regulators won't cap the number of licenses issued, although there may be limits on how many enterprises can operate in a specific area, according to Aaron Ghitelman, spokesman for the Office of Cannabis Management.

Regulators have so far approved 13 conditional retail licenses on Long Island. Recipients include: a chef who once dealt drugs and his life  partner, two childhood friends from Westbury and a producer who fell in love with the Island while booking film locations.

The state licenses aren't tied to specific locations, and none of the regional entrepreneurs approached by Newsday have been prepared to discuss when or where they'll launch. 

The state has launched a social equity fund with a target of gathering $200 million,  which will be used to find and lease storefronts that conditional licensees can sublease. The retailers will have 10 years to pay back the upfront costs — up to $1.5 million — plus 10% interest. They'll also be responsible for rent and charges for a host of services, such as accounting, human resource management and payment processing, that the state will contract out for all licensees to minimize the cost for individual businesses. 

Assistance from the social equity fund will be offered to the top 20 Long Island licensees who scored the highest during the application process, Ghitelman said. If they turn down the aid, assistance will be offered to the next highest-scoring licensees in the region, he said.

With Carl MacGowan and Joe Werkmeister.

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.