In April 2021, New York legalized recreational cannabis sales for people aged 21 and older, becoming the 15th state in the country to approve adult-use cannabis sales. Eligible New Yorkers would now be able to possess up to three ounces of cannabis or 24 grams of concentrates with no legal repercussions.
While the legislation didn’t outline a specific schedule for recreational sales, they were expected to begin sometime in 2022. Lawmakers behind the bill and reform advocates predicted that the move to legalize adult-use marijuana in New York could prove to be extremely lucrative, creating a market worth an estimated $4.2 billion and surpassing most other states with recreational markets.
An estimated 40% of the tax revenue generated from recreational cannabis sales in New York would be allocated to Black and Brown communities that had been disproportionately affected by the war on drugs.
However, it will be quite a while before New York’s recreational cannabis industry reaches the heights lawmakers and activists dream of. For starters, we still don’t know when dispensaries will open their doors and begin sales, and entrepreneurs are still waiting eagerly for word from regulators.
Office of Cannabis Management spokesperson Aaron Ghitelman conceded that the state needed more than one recreational cannabis dispensary and that the office was working to approve more stores. New York is currently home to only one dispensary. The Housing Works Cannabis Co. opened its doors for just a few hours on December 29. New York Office of Cannabis Management executive director Chris Alexander made the first ceremonial purchase of the day, buying 100 milligrams of THC gummies and an eighth-ounce of locally grown cannabis flower.
While this was undoubtedly great, a single store is far below the 20 stores that Governor Kathy Hochul had promised before the start of the year. Housing Works Cannabis Co. sold to more than 500 customers in the first four hours after it opened its doors, signifying the immense demand for recreational cannabis among New Yorkers.
Conversely, sales in nearby New Jersey began last April with around 12 operational locations.
It is still unclear when state regulators will allow other adult-use cannabis retailers to open their doors. Furthermore, New York is still plagued by a massive illicit cannabis market, an issue that also affects states such as California that are among the largest cannabis markets in the world.
Alexander pledged to provide more law enforcement to handle New York’s cannabis black market in the wake of numerous cease and desist letters and raids of unlicensed cannabis operations by police and the New York City Sheriff.
As the legal production of adult-use cannabis grows, there is likely to be a bigger market for indoor cultivation equipment, such as that made by Advanced Container Technologies Inc. (OTC: ACTX), as players compete to carve out for themselves a segment of this new market.
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