24 more pot, cannabis dispensary licenses issued on Long Island

The state issued 24 more recreational cannabis dispensary licenses for Long Island on Wednesday despite previously acknowledging that introducing more retailers to the region would exacerbate competition for storefronts.

The Cannabis Control Board, which approves marijuana and hemp policy, started handing out retail licenses in November. Thirty-nine have since nabbed licenses to operate on the Island, but struggled to find locations in a region where most localities forbid dispensaries and those that allow them have relatively restrictive zoning. Just one firm, Strain Stars of Farmingdale, has opened its doors on the Island.

The quest to secure retail space will only intensify now that 63 firms are scouring the Island for locations, said Brian Stark, who received permission in November to open a dispensary he will call Metropolis Cannabis. Only four towns — Babylon, Brookhaven, Riverhead and Southampton — will allow dispensaries, and the state has used social equity guidelines to select licensees.

"I just don't feel like it's in the idea of a social equity program to have one another battling for real estate," said Stark, of Merrick. "But at the same time, there is no real estate right now. So the more numbers, the better fighting chance we've got to turn some of these municipalities over" to allowing cannabis sales.

The state has been aware of these hurdles for months. In January, Stark raised concerns about finding real estate for local dispensaries with Reuben McDaniel, president of the Dormitory Authority of the State of New York, an agency charged with securing storefronts for the state's first 150 dispensaries. Stark and a second Long Island licensee, who requested anonymity due to concerns about local government reactions, said McDaniel told them that no additional credentials would be handed out on Long Island until licensees were up and running. At that point, seven businesses were authorized to open in the region.

In February, officials from the real estate firm CBRE, which was tapped to help the state line up retail spaces, reiterated this message to Stark and other licensees, Stark said. To date, the state's team has yet to announce that it found a dispensary location for any licensees on the Island.

Help hunting for real estate is meant to give a leg up to the initial "conditional" licensees, business owners who were convicted of — or are related to someone convicted of — a marijuana offense. Black and Latino New Yorkers were arrested under the old cannabis laws at higher rates than their white counterparts.

DASNY referred a request to comment to the state Office of Cannabis Management, which oversees the marijuana industry. When asked about licensees' impression that more credentials wouldn't be issued on the Island, OCM directed Newsday to DASNY.

OCM director of policy John Kagia said the state decided — for a second time — to expand the number of retail licenses due to unmet consumer demand. Officials initially decided how many credentials would be available in each region based on the area's population. They've since, generally, increased the volume of licenses available in each region by the same proportion, Kagia noted. More licenses may still be issued, according to testimony from OCM executive director Chris Alexander.

The state is taking several steps to address concerns on the Island, Kagia said. Firms licensed to sell pot recreationally on the Island may now start with delivery-only facilities in Queens, the Bronx or the mid-Hudson Valley region, he said. All dispensary businesses were previously granted a year to get off the ground with delivery, but they were, in most cases, limited to launching in the region listed on their license.

The state also plans to meet with Long Island localities to educate them about cannabis and urge more communities to welcome the industry, Kagia said.

"There have been lines outside [Strain Stars] for several days after the location opened, which is just one illustration of the scale of demand," he said. "We hope that the licensees that are able to locate and get operational on the Island will serve as good examples of the opportunity for municipal tax revenue."

The Long Island Cannabis Coalition trade group congratulates the new licensees, said co-founder Gahrey Ovalle. He said the growing ranks of licensees might put enough pressure on the state and localities to open up more retailing opportunities. Ovalle described the broader area available for delivery hubs as a good first step.

"We can't move forward with just good will and intentions," said Ovalle, of Central Islip. "We have to have actual direction."

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.