Avalanche of New Applications for Legal Weed Shops Hit Local CBs, After Hochul Gives OK

Governor Kathy Hochul has kicked off a massive push to expand cannabis licensure statewide, with a new application process coming online on October 4 to hand out hundreds of fresh certifications. It will last two months, until December 4.

The new application rush has meant that local community boards–⁠which issue advisory recommendations on new licensees in their neighborhoods to the Office of Cannabis Management, which ultimately decides whether to sign off on certification or not–⁠are getting absolutely hammered with fresh applicants seeking their blessing.

A member of Community Board 7, which covers the Upper West Side, told Straus News that nearly 20 seeking licenses had hit their inboxes in the past 24 hours alone. They noted that many more were likely to flood in by Tuesday, October 10, the day before a meeting to consider the eager licensees. Community Board 4, which represents Chelsea, mentioned “dozens” of new supplicants.

CB2, which encompasses neighborhoods including Greenwich Village and SoHo, had seen 25 new applicants in 24 hours as of press time. Mar Fitzgerald, who chairs that board’s Cannabis Licensing Committee, said that a “surge [of applications] is an understatement. I’ve been telling community boards to prepare for this day since March 2021 - and here it is.”

The governor’s office notes that Hochul hopes to take advantage of an industry that can generate “hundreds of millions in revenue annually, as well as create or sustain thousands of jobs across the state.”

Hochul will pair the expansion of legal cannabis retail operations with a stepped-up crackdown on the illegal (or unlicensed) ones. This involves allowing local jurisdictions to pursue padlocking orders that can be handed down by state courts, as well as stepping up labor law enforcement against businesses. For example, the Workers Compensation Board will check smoke shops to see if they carry worker’s comp insurance, allowing them to issue Stop Work Orders for noncompliant locations.

According to the governor’s office, 8,500 pounds of “illicit” cannabis has been seized “to date” by the Office of Cannabis Management and the Department of Taxation and Finance. That’s $42 million worth of product, as measured in “estimated street value.”

“We know there’s room for improvement as New York works to launch a brand-new cannabis industry and crack down on illicit operators, and I’m committed to working with all stakeholders to get the job done right,” Hochul said.

“My Administration is laser-focused on shutting down illegal storefronts, protecting the health and safety of children, and helping small businesses thrive. We will continue working to build the most equitable adult-use cannabis industry in the nation that invests in communities and rights the wrongs of the past,” she added.

The amount of unlicensed cannabis stores in the five boroughs is unclear and a matter of dispute. New York City Sheriff Anthony Miranda told the City Council earlier this year that there were an estimated 1,500 illegal smoke shops in the city. However, locals such as Paula Collins–an attorney that represents some unlicensed shops–have made the bold claim to Straus and Crain’s New York Business that her personal estimation is closer to 8,000 shops.

Currently there are only nine licensed cannabis dispensaries in the five boroughs, including five in Manhattan. The rollout of licensed cannabis shops has been slower in New York than in other states, in part due to court rulings.

Chris Alexander, the head of the New York State Office of Cannabis Management (OCM), noted that “this is a significant moment for entrepreneurs who have been waiting for an opportunity to join this consequential market. We’re building the biggest and fairest cannabis market in the world, and the opening of a new application window means an expansion of opportunity.”

Alexander also boasted that “New York’s market is centered around equity, with the nation’s strongest anti-trust protections in place that ensures small operators will forever have a place in our cannabis industry.”

The governor’s office clarifies that by expanding the cannabis market, it is hoping to avoid the price shocks and “significant contractions in overall market value” seen in other states. Licenses will start to be processed in early 2024. The applications will be based on new regulations approved by the Cannabis Control Board on September 12.