New York cannabis farmers have harvested nearly a billion dollars worth of legal bud since planting their first crop last year. But since the state hasn’t even approved one single retail license, there's a very real risk that all that weed may end up rotting away in warehouses before it can be sold.
Last year, in a bid to finally advance the Empire State's long-delayed recreational retail rollout, Governor Kathy Hochul announced that existing hemp businesses would be allowed to grow legal marijuana for the adult-use market. To handle the sales end of the equation, the state plans to issue the first 150 retail licenses to New Yorkers who have previously been arrested for cannabis crimes. And despite initial fears that adult-use sales would be pushed back until 2023, Hochul promised that regulators would issue these licenses before this year is wrapped.
Hundreds of licensed hemp farms planted their first adult-use crops last spring, in hopes that regulators would follow through on their promise. In total, farmers harvested, dried, and stored nearly 300,000 pounds of legal weed, valued at as much as $750 million on the legal market. But despite the constant promises, regulators have failed to issue even one single retail license to date. These endless delays are forcing farmers to keep their flower in storage, where it risks losing potency.
“Old cannabis starts to have a brownish glow,” explained Melany Dobson, CEO of Hudson Cannabis, to Bloomberg. When exposed to light, air, and warm weather, the THC in cannabis can break down into cannabinol, which is far less potent – and therefore less valuable. In the meantime, this massive crop serves as a prime target for thieves, who could easily flip the fresh flower on the black market for a hefty profit.
Like many other farmers in the state, Hudson Cannabis began growing high-THC bud on its 520-acre hemp farm last year in hopes that retail sales would soon get underway. “It’s an unclear path to market,” Dobson told Bloomberg. “We’ve been told again and again that dispensaries will open before the end of the year. I’ve acted as though that’s our single source of proof, so we’re prepared for that.”
The state Office of Cannabis Management (OCM) received over 900 applications for its 150 available slots and has yet to announce a single winner. And to make matters worse, an out-of-state business sued New York over its residency requirements, arguing that they violated the US Constitution. A federal judge agreed and issued an injunction that temporarily prevents the OCM from issuing over 60 of its planned licenses.
There may be some light at the end of the tunnel, though. The judge only blocked the issuance of licenses in five state regions, and regulators can still move ahead with nearly 90 of the remaining licenses. The state is also issuing another 25 retail licenses to nonprofit organizations. This week, the OCM is expected to approve the first 36 applicants that are being considered for approval. The list of probable winners, which was published this weekend, includes three New York City nonprofits and dozens of new startups all across the state.
Axel Bernabe, OCM chief of staff and senior policy director, told Bloomberg that his office will begin assisting the winning applicants “as much as possible to find an office, open a dispensary and start essentially dispensing the estimated 200,000 pounds of product and several hundred product lines that we are seeing coming out of conditional growers and processors.”