Roadblocks and Red Tape: New York’s Cannabis Effort at a Crossroads

Customers during the opening day at Smacked LLC, a legal marijuana dispensary in New York, on Jan 24, 2023.

“We are now very clearly and quickly learning that it is now to our disadvantage in the current landscape,” they said. The retail initiative was meant to help people convicted of marijuana offenses gain a foothold in the legal cannabis industry by making them the only ones eligible to sell weed legally for an initial, fixed period of time. It was to provide 150 of them with ready-to-open locations and a total of $200 million in low-interest loans.

The Office of Cannabis Management, which issues licenses, and the Dormitory Authority declined interview requests. But the agencies’ leaders said in a joint statement that they would meet with the letter’s signers and make improvements to the program. The first such meeting was set to take place in Queens on Tuesday.

One licensee said he found a place to rent for $9,000 a month, but the property owner changed his mind after the Dormitory Authority offered him $14,000 monthly to join its landlord pool instead. Another said he was charged $125,000 for a security system that normally costs $12,000. And several licensees said contractors were quoting renovation costs from $800,000 to $1.6 million for work that could be done for less than $300,000.

Six months later, he said, officials have yet to answer his most basic questions — “How much is this going to cost me? Where is my loan agreement?” — and he was beginning to fear that licensees have been set up to fail. Contractors’ quotes seem high because they include things such as cash machines and furniture that are not typically part of construction costs, he said. But all of the estimates have come down, one by as much as $400,000. He added that the loans do not require dispensary owners to put up collateral, which frees them to finance other parts of the business, such as inventory.

Source: News Formal (newsformal.com)

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