420 with CNW — New York State Issues Initial Batch of Recreational Marijuana Licenses

Regulators in New York State recently issued the first batch of recreational cannabis retail licenses to 36 applicants. The regulators insist that recreational sales will launch by the end of this year, and this move to issue the licenses is a step toward the attainment of that objective.

To show how committed they are to seeing recreational sales commence this year, regulators revealed that the businesses that qualify to offer marijuana delivery services can launch their operations even before actual adult-use sales begin. This is a departure from what has been the norm in other states where sales are first launched and then delivery services follow.

MJBiz estimates that the state could register recreational marijuana sales of $1–$1.2 billion in 2023, and then those sales will gradually increase to about $2.2–$2.6 billion a year by 2026.

Of the 36 licenses granted, 28 were awarded to people who had cannabis convictions on their records or those with family members who had been incarcerated on marijuana charges. The remaining eight licenses were awarded to nonprofits. The recipients of this batch of 36 licenses include Essential Flowers, NYCCABUDS and Gotham CUARD as well as Kush & Kernet.

While announcing these first licensees, the Office of Cannabis Management, the agency in charge of regulating recreational marijuana in New York State, revealed that it was in the process of scrutinizing 903 social equity license applications in order to choose the initial 150 recipients. These licensees will be helped to lease premises and receive funding support for their operations; $200 million has been earmarked to support these social equity programs.

David Feder, a marijuana lawyer in New York, described the state’s action of issuing the 36 licenses as “bold,” especially given that there is a lawsuit challenging some requirements that license applicants have to meet. This federal lawsuit takes exception to a condition that requires applicants to have what the OCM called a “significant presence” within the state. This condition was intended to prevent multistate operators based outside of New York state from coming in and dominating the industry, to the detriment of locally based companies.

New York is yet to finalize all the policies that will govern the recreational market. However, some requirements that current companies in the medical cannabis industry must meet are triggering sharp responses from these entities. Most of them are multistate operators. For example, MSOs will be required to pay $5 million as a one-time fee to be licensed and then pay $3 million for each site they wish to operate; they will also have to wait at least three years before opening a store specifically for recreational marijuana sales.

The intentions of the OCM are laudable in terms of promoting social equity businesses, and the entire marijuana industry, including companies such as Flora Growth Corp. (NASDAQ: FLGC), are probably going to keep a keen eye on how the industry develops through this model.

NOTE TO INVESTORS: The latest news and updates relating to Flora Growth Corp. (NASDAQ: FLGC) are available in the company’s newsroom at https://cnw.fm/FLGC

About CNW420

CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of two informative articles each business day. Our concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. Articles are released each business day at 4:20 a.m. and 4:20 p.m. Eastern – our tribute to the time synonymous with cannabis culture. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.

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