The New York State Office of Cannabis Management released the names of 600 cities, towns, and villages that opted out from either hosting an adult use retailer, consumption site, or neither in late January, affecting where cannabis sales take place in the state.
Importantly, the opt out option applies only to cannabis sales; production, growing, and manufacturing were not included. Experts say the number of opt out municipalities is likely to dwindle as the adult use market ramps up.
Municipalities had until December 31, 2021 to pass local laws requesting the state to opt their jurisdiction out of hosting these kinds of licenses.
The top five counties with jurisdictions that opted out of cannabis sales are: Nassau (38), Westchester (31), Orange (28), Chautauqua (27), Jefferson (22).
Nassau County on Long Island has a population of 1.39 million people, north suburban Westchester County has 1 million people, and Orange County, just north and west of Westchester, has around 400,000 residents. These suburban counties are of particular concern for aspiring dispensary owners since each municipality’s opt out narrows an already limited number of spaces available that don’t conflict with distance limitations for schools and churches.
Chautauqua County has 127,657 people and is located south of Buffalo, and Jefferson County has 116,721 people located in the far north Thousand Islands region. Population data is from the 2020 US Census.
The regions of Watertown and Utica were sparsely speckled with opt out jurisdictions compared to the rest of the state.
Heather Trela, of The Rockefeller Institute of Government in New York has been maintaining a Marijuana Opt Out Tracker. She says the actual numbers reported by the state may be lagging behind, as her data shows that 769 local governments have opted out of dispensaries and 884 have opted out of consumption sites.
“They have the official state filings, where mine was based on actual local laws that were passed or by talking to municipalities. It’s possible that the numbers will be a little bit different,” Trela told Grown In. “The Office of Cannabis Management has the official results, but I think they’re planning to put out updated numbers at some point to reflect some of the late comers, those who have their local laws at the end of December and were subject to a permissive referendum. There was a 45 day period where they could have a referendum.”
The Office of Cannabis Management’s data is based on the information provided by localities when they filed their local laws with the office as required under the Marihuana Regulation and Taxation Act, a spokesperson said in an email to Grown In.
Customers in counties with a high number of municipalities that opted out could still benefit from delivery services that are allowed in the state, but it’s likely to be cost prohibitive for some, Trela said.
The number of local governments that have opted out may change over time, she said, as the state has clarified license requirements and regulations, Trela said.
“I do think as well as people see how this plays out into the revenue that can be made, as well as the potential and essential issues associated with having a dispensary consumption site that you may also see some municipalities decide to opt in,” she said. “But this happened in other states as well, where you still see municipalities opting in at a much later date after they’ve seen how the industry has impacted local communities.”
David Holland, a NORML New York chapter representative and an attorney at David, Clifford, Holland, said there’s still hope for people in municipalities that have opted out of cannabis sales but still want to see brick-and-mortar retailers and consumption lounges in their jurisdictions.
“There is provision under the law for the citizens to take signatures and sign petitions to be able to put a special election – or just in the general election cycle of that municipality – on the ballot, a lot of overturn the law that ended up precluding social consumption sites and brick and mortar retail spaces. That’s one of the very few times that there is a voter referendum on a specific issue that can take place like this,” he said. “I know of about five or six municipalities where they’ve gotten enough petitions and signatures that they’re just about to hold their elections for that issue. And we’ll see how that shakes.”
Holland also said just because a local government opts in does not mean they don’t have a say over where legal cannabis sales occur in their jurisdiction.
“There’s still tremendous local control, even if they stayed in the program. There were a couple that were made aware that technically… there could be no possibility of actually a retail storefront in any capacity just because of zoning issues and things like that. It’s not the be all and end all, take it or leave it. There’s still a lot of local input that goes into it, even if they did not opt out,” he said.
Aaron Smith, CEO and cofounder of the National Cannabis Industry Association, said New York’s opt out municipality numbers resemble that of California’s when its adult use market began. And just like California, he expects the number of opt out towns to dwindle as local officials and voters in opt out towns notice how much business they are losing to surrounding municipalities.
“Opting out of the system doesn’t mean that cannabis was somehow not illegal. It just means that the people that live in that particular city just have to commute to another city to purchase the product, which means they’re driving tax dollars into another city that causes traffic that doesn’t need to exist, CO2 emissions, you name it,” he said. “But the good news is, as we’ve seen in California, this trend might be something that happens early on, but over time, as jurisdictions and cities and municipalities see what they’re losing out on, they tend to move toward embracing regulated markets, and I would expect to see the same thing happened over time in New York.”