New York cannabis licenses not available until 2023--- Here is what to do in the meantime
When state legislators in New York passed a sweeping cannabis legalization bill in September of 2021, cannabis industry insiders and financial analysts were seeing green with the thought of a brand new emerging cannabis market. Experts predict New York’s cannabis market to become a $4.2 billion industry— making New York one of the largest cannabis markets in the world. This excitement cooled in recent weeks after the head of New York’s Cannabis Control Board (CCB) said she anticipates recreational cannabis business licenses to be first available in the spring of 2023 at the earliest. Tremaine Wright, CCB Chair, said the timeline to create the recreational cannabis framework and regulations will take at least 18 months. The first recreational sales in New York will come after the regulatory framework is in place, a licensing application takes place, and business that receive licenses from that process are able to open their doors.
Many cannabis business owners looking to break into the New York market will now likely have to wait over a year for regulations to be drafted and licenses to become available. While this isn’t the news the cannabis industry was looking for, there is still work that can be done until the regulatory framework is in place. Here is what hopeful licensees can do in the meantime:
Lobby Local Government
One way to stay up to date with regulatory news in New York is to start building relationships with local municipalities and engage in lobbying efforts to help create the local regulatory framework. Cannabis licensees will require permission from local government to operate and must share their ESG (Environmental, Social, and Governance) impact. ESG criteria will be used by potential investors of your business. Oftentimes, local governments are the real gatekeepers for operating in their jurisdictions. For this reason, finding a location for your cannabis facility requires more political than business analysis. Joining or creating a local cannabis business organization is a great way to network with other business owners and to also gain strength in numbers for lobbying local governments. Community activism in the local area can also pay dividends when you need local municipal or county support.
Cannabis Business Plan
Potential license holders can use this time to analyze and optimize their business plans. Business plans are required when submitting a license application for a cannabis business. A business plan is also required to attract potential investors. Accurate financial modeling and forecasting is another way to attract investors. Other factors to consider and to begin planning: third party contractors, security systems and procedures, facility design, transportation logistics, packaging and labeling compliance, and traceability software. However, don’t get too tied to any one business model – until the regulations are released, the details of operation models will have to remain fluid. For that reason, you may want to work with people experienced in several models for any given section of the industry’s vertical (i.e., cultivation, retail, etc.).
Research Products
New cannabis products are hitting the legal market daily. For producers, product development is key to determining business and marketing plans. As new segments of cannabis consumers enter the market, product innovations are ripe for take-off. Cannabis consumers are apt to try new products, especially when it comes to convenience. For instance, in 2021, cannabis-infused beverages saw a 40% increase in sales. However, keep in mind that the regulations may ban certain product types, such as infused chocolates, so make sure your product offerings are not too narrow prior to the release of the regulations.
Social Equity
CCB Chair Tremaine Wright recently said her goal is that half of all licenses awarded will go to “people most prosecuted by the War on Drugs”. Governor Kathy Hochul also expressed support for the social equity program in all aspects of cannabis licensing. The support is conjecture and not legally binding yet, but it does show the thought process of New York decision makers. Though the regulatory framework for the social equity program has not been formally written, Wright and Hochul have made many public comments reiterating the importance of social equity. Wright recently said that social equity licenses can only be sold to other social equity applicants to prevent MSOs from buying social equity licenses in New York. With the recent changes coming out of New Jersey showing a strong preference for prioritizing social equity businesses, prospective licensees should closely follow the rulemaking process to ensure they can quickly pivot to meet the application requirements.
Stay Updated on New York Cannabis Licensing
Stay updated on any New York cannabis licensing news by following the Office of Cannabis Management website. The CCB hosts virtual public meetings. Past meetings can be viewed on their website along with the schedule for the next public meetings. Each public meeting includes a question and answer session. Do the same for any municipality you have identified as a likely candidate for your location. Remember, local governments have until Dec. 2021 to ban some types of cannabis businesses from their jurisdictions entirely. For any other questions and what you can do to prepare for New York recreational cannabis licensing, contact Global Go today.