New York is planning to kickstart its long-delayed adult-use market by allowing retailers to start delivering weed before they get a chance to open their brick-and-mortar storefronts.
Last week, the state Office of Cannabis Management (OCM) issued a new set of regulations that lay out the rules for weed delivery in the Empire State. Licensed adult-use retailers will be allowed to employ up to 25 staff members to deliver weed by bicycle, vehicle, or on foot. Customers will only be able to order online or by phone, and will need to present ID proving that they are 21 or older. But most importantly, businesses will be allowed to begin delivering weed before they have even opened up their physical storefronts.
The decision is a last-ditch effort to get legal weed sales underway before the year is out. New York legalized weed over 20 months ago, but state officials have seriously fumbled the rollout of adult-use sales. This year, Governor Kathy Hochul hatched a new plan to get pot on the shelves by allowing existing hemp companies to grow weed for the adult-use market, and regulators set aside 150 retail licenses for New Yorkers who had been previously convicted of cannabis-related crimes.
But even with this progress, sales still haven't begun. An out-of-state business owner sued the state in an attempt to steal a business license from native New Yorkers, which put nearly half of the state's planned retail licenses on hold indefinitely. Regulators finally awarded the first 36 retail licenses last month, but state officials have yet to select locations where these licensees will be allowed to open their storefronts. These delays will likely prevent any retail locations from actually opening in 2022, as promised.
"We thought while we wait for some of these locations to come online, while people take the time to find space, we should give everybody an opportunity to get started on retail delivery," said OCM Chief of Staff Axel Bernabe to CBS News. "They can find a temporary location for a year, for 12 months, they can start from a warehouse, in a sort of less expensive location and start building their retail brand, building their product offerings.”
Licensed retailers will also be allowed to deliver weed to adults in other towns and counties, which will greatly expand access to legal weed throughout the state. "Delivery, I think, can actually help to reach more people than a traditional brick-and-mortar location might," said Brittany Carbone, a board member of the Cannabis Association of New York, to CBS. "We've seen in other states be the most, the biggest indicator of how well the legal market is going to be able to offset the unregulated market, right, is access to retail."
In a unique twist for the US weed industry, customers will need to pay for their deliveries online – cash transactions will not be allowed. Most US cannabis businesses operate on a cash-only basis thanks to federal restrictions that block banks from working with companies that handle Schedule I drugs. This leaves weed shops and delivery people with sacks stuffed with cash, making them a prime target for robberies. The state's no-cash rule will help discourage robberies, and regulators will also require delivery staff to use GPS trackers for additional safety.
The OCM also hopes that the new delivery rules will also help licensed sellers compete with illegal dealers, which have operated pot delivery services in New York City for decades. “There’s a certain amount of excitement because we had the sense that delivery might not make that first cut,” said Dan Livingston, executive director of the Cannabis Association of New York, to The City. “The fact that dispensaries are going to be able to run their own delivery is exciting because we know that that’s where the market is, in New York City in particular.”
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