The New York Statehouse in Albany.

As of today, it’s been four weeks since applications were due for New York State’s first adult use cannabis dispensary licenses to be awarded since the Registered Organization program was created in 2016. But despite the deadline, the 903 applicants for 150 new dispensary licenses have little idea when they’ll receive notice of who wins a license – or much else.

“It is a holding pattern at this stage,” said applicant Jim Anstey.

“I feel optimistic, but I feel uncertain as well. It’s just conjecture,” said applicant Osbert Orduña.

“It’s really nerve wracking,” said applicant Jerry Rivera.

The so-called CAURD applicants, short for Conditional Adult-Use Retail Dispensary, were part of a first round of licenses created by state regulators last July, intended to provide a quick shot in the arm for the state’s growing market with licenses that could be somewhat quickly stood up, and provided to applicants who were justice-involved. Early on, expectations were high that some CAURD licenses could be operational by the end of 2022 providing a political message from Governor Kathy Hochul that the state was supportive of a burgeoning legal cannabis industry. 

But a lack of information about the program’s forward movement has instead unsettled applicants who are now wondering if they should be making alternative plans.

The success of the CAURD program rests on a number of complex plans. First, the state has to select license winners from the 903 applicants who must be both majority owned by a justice-involved applicant, someone who was at least arrested in New York for a cannabis-related crime, and second, majority-owned by someone with a business with at least two years of profitable operation. As of today, the state has not selected a contractor to score applications, a step that could take an unknown length of time.

Second, the state issued a complex request for proposals through its Dormitory Authority of the State of New York (DASNY), basically its in-house building construction group, to build uniform dispensaries that are fully fitted out with vaults, point-of-sale systems, product displays and more for the 150 winning dispensaries. DASNY would also site and lease all of the dispensaries, and then re-lease those locations to the license winners.

However, so far DASNY has not announced the design-build firms selected to construct the facilities. Also, the facility building ties into CAURD’s third complicated plan, which is its funding.

The CAURD scheme is meant to be financed through a public-private partnership where a $200 million fund, managed in part by former NBA star Chris Webber, would seek investment to pay for property leases for and construction of the dispensaries. The fund would then receive payments from the license-holders as a kind of lease-back payment.

New York State has contributed $50 million to the fund, but since that cash injection was announced last summer, there has been little word on how much private investment has gone into the fund, so it is not clear how many dispensaries the fund has money to build at the moment.

Complicating matters even more for the fund is that the state has only received bids from two small state-chartered banks, Dime Community Bank and Five Star Bank, to act as fiduciary to administer loans for the construction projects. It is questionable whether these small banks have the expertise or ability to manage so much money for so many applicants that will require a high number of suspicious activities reports to federal banking regulators, since the projects will be paid for directly by cannabis businesses – the CAURD licensees.

As a result, the DASNY facility building program seems to be stalled, raising questions about whether or not it will be able to supply facilities to future CAURD licensees any time soon.

Last week, The City reported that Gov. Hochul is committed to 20 new dispensaries by the end of this year. Under the circumstances, exactly how this will happen is somewhat of a mystery.

Multiple Albany lobbyists tell Grown In there is discussion among Office of Cannabis Management policy makers that to jump start the program in 2022, the state may just by-pass the DASNY program and award the first licenses to CAURD applicants who have secured their own property. This discussion has already filtered down to applicants, some of whom have begun to put together their own alternative plans.

“We have a couple of dollars we’re willing to reinvest in ourselves, in case DASNY says we are not able to totally support you,” said applicant Rivera.  “I have a real estate agent. I have my initial startup costs. I don’t need your money.”

“Does that mean the priority will go to those who will go to those with secured property and those applicants will get prioritized?” asked applicant Orduña, who is based on Long Island. “Property in New York City and Long Island is anywhere from $125 to over $300 a square foot on an annualized basis. It’s a ton of money to put $25,000 a month out on rent for a postage sized space.”

As of today, there are no future Cannabis Control Board meetings scheduled on the regulator’s website. But election day is November 8, so if Gov. Hochul wins reelection, as current polling predicts, it’s possible new regulations and plans will be announced quickly.

“We’re all wondering how the bits of the jigsaw puzzle will fit together. Logistically, there’s going to be a lot of issues to work through,” sighed applicant Jim Anstey last week.


Editor Mike is a co-founder and the editor of Grown In, a U.S. national cannabis industry newsletter and training company. His career has taken him from Capitol Hill to Chicago City Hall, from...