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In a significant development, multistate operators holding medical cannabis licenses in New York have received approval from state regulators to venture into the adult-use market starting Dec. 29, 2023. This approval comes one year after the state initiated recreational marijuana sales, signaling a notable progression in the unfolding narrative of New York’s adult-use cannabis sector.
The decision by the Marijuana Control Board (CCB) has long been anticipated, and it represents a pivotal moment that has sparked controversy throughout the rollout of the state’s recreational marijuana market. This move follows a ruling by the New York State Supreme Court on Dec. 1, 2023, wherein an injunction hindering the issuance of new recreational marijuana business licenses was lifted, clearing the path for regulatory authorities to greenlight the expansion.
During its meeting, the CCB gave the nod to six registered organizations, namely Columbia Care NY, Curaleaf NY, Etain, NYCanna, PharmaCann of NY and Valley Agriceuticals.
Earlier this year, it was reported that the state’s Office of Marijuana Management (OCM) had proposed allowing multistate operators to enter the recreational market by year-end. A three-year waiting period that was placed on the state’s 10 vertically integrated medical cannabis providers was essentially eliminated by this plan.
The primary purpose of the waiting time was to provide social-equity shops and smaller suppliers with a first-to-market advantage. However, when unlicensed cannabis businesses proliferated, particularly in New York City, the waiting period was altered.
Despite efforts to expand retail channels and hasten business operations, delays persisted in approving hundreds of CAURD licensees and applicants due to legal challenges over social equity provisions and licensing process.
In another development, the Office of Marijuana Management dealt a setback to the state’s small group of craft cultivators by announcing the discontinuation of the Marijuana Growers Showcase program by year-end. This decision, contrary to the preferences of smaller growers, marks a change in strategy for the showcases, which were initially designed to assist cultivators in selling excess inventory from the previous year.
According to the state, the showcase program has generated more than $4 million in sales this year. While adult-use cannabis retailers in New York have amassed more than $110 million in sales in the current year, this falls significantly short of the billion-dollar projections made prior to the launch of adult-use sales. The Office of Cannabis Management revealed that as of last week, 31 recreational marijuana stores are open statewide.
The growth and consolidation of the recreational cannabis market in New York State could give ancillary entities such as Innovative Industrial Properties Inc. (NYSE: IIPR) opportunities to expand their reach and serve clients in that jurisdiction.
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