“It has been more than two years since New York notionally legalized recreational marijuana, and things are not going quite as planned. “Although Gov. Kathy Hochul suggested last fall that more than 100 dispensaries would be operating by this summer,” The New York Timesnotes, “just 12 have opened since regulators issued the first licenses in November.”
Part of the problem, as you might expect, is red tape and bureaucratic ineptitude. But another barrier to letting licensed marijuana merchants compete with the unauthorized vendors who have conspicuously proliferated since the spring of 2021 is the state’s affirmative action program for victims of pot prohibition.
New York, like several other states that have legalized marijuana, mandated preferences for license applicants who suffered as a result of the crusade against cannabis. While that idea has a pleasing symmetry, it never made much sense as a way of making up for the harm inflicted by cannabis criminalization. And in practice, executing the plan has drastically limited the legal marijuana supply, making it much harder to achieve the state’s avowed goal of displacing the black market.
To be clear: I don’t think people with marijuana convictions should be excluded from participating in the newly legal market, a policy that would add insult to injury. But that does not mean they should have a legal advantage over cannabis entrepreneurs who were never arrested but might be better qualified.”
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“New York reserved the first batch of up to 175 retail licenses mainly for people with marijuana-related criminal records or their relatives. Those applicants needed to show they had experience running a “profitable” legal business in the state. Nonprofit organizations with “a history of serving current or formerly incarcerated individuals” also were eligible, provided they had “at least five full time employees,” “at least one justice involved board member,” and a track record of operating “a social enterprise that had net assets or profit for at least two years.” Another requirement was demonstrating “a significant presence in New York State,” which led to litigation and a temporary injunction against issuing retail licenses in five areas of the state.
Satisfying the state’s criteria required “a lot of documentation,” Bloomberg CityLab reporter Amelia Pollard noted last fall, which gave New York’s Office of Cannabis Management (OCM) “a mound of paperwork to wade through.” As of November, the OCM had received more than 900 applications from would-be marijuana retailers. On November 20, it announced that it had granted 36 “provisional conditional adult-use retail dispensary licenses” to individuals and organizations.”
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“The approved retailers are far outnumbered by unauthorized vendors, many of whom openly sell marijuana from storefronts, trucks, and tables, unencumbered by the state’s licensing requirements, regulations, and taxes. Yelp’s list of the “best recreational marijuana dispensaries” in New York City includes 90 outlets, only a few of which are blessed by the OCM.”