New York to Allow for Cannabis Deliveries Prior to Storefronts Opening

There has been no shortage of news surrounding the New York cannabis industry in recent months. Medical cannabis has been legal in the state since 2014. On Jan. 24, 2022, the state completely removed the qualifying conditions list that patients used to have to adhere to in order to qualify for the medical cannabis program. Since then, doctors in the state have been able to recommend medical cannabis for any condition in which they feel it may benefit.

In March 2021, the state also further reformed cannabis laws by legalizing the retail use of cannabis. However, since legalizing the possession and consumption of cannabis for adults, the state has yet to implement operational dispensaries to serve adults in the state. This has caused a long list of issues, such as unregulated businesses serving the general public. Just recently, some of these illegal businesses were also found to be selling tainted products that were contaminated with things such as E. coli and salmonella. While cease and desist orders have been sent to similar businesses in the past, it has not prevented other ones from opening up shop.

Cannabis Delivery Regulations Outlined by Office of Cannabis Management

The first Conditional Adult Use Retail Dispensary licenses, or CAURD licenses, for retail cannabis retailers were approved by the Cannabis Control Board (CCB) in late November. However, these retailers are not yet operational, so to help address the unregulated businesses catering to the adult consumer base issue, the state just released regulations surrounding delivery services for CAURD licensees interested in providing them.

These new regulations will allow license holders to begin deliveries of retail cannabis to adults via motor vehicles, bikes, and scooters even before their storefronts are open for business. Here are the high-level details from the Office of Cannabis Management (OCM) press release published on Dec. 9:

• Adult-use retailers licensed for business in the state are permitted to fulfill cannabis orders via delivery from a warehouse location while they are awaiting the completion of their storefronts.
• Adults over the age of 21 are permitted to place orders via phone or online.
• In-person purchases at the warehouse are prohibited.
• All orders must be prepaid prior to delivery at the time the order is placed.
• Businesses are prohibited from having more than 25 employees on their delivery team.

So When Will Cannabis Dispensaries Be Operational in New York?

These delivery regulations were released in order for businesses to become operational while they await the completion of their storefronts. These storefronts are required to be built by the Dormitory Authority of the State of New York (DASNY). The DASNY recently announced that it had signed the first lease on a location that will be converted to a cannabis retail shop and stated that it “will continue the work of securing retail locations and locations will be matched with licensees as they become available.”

In order to help right some of the wrongs of the past, New York took a different approach to its licenses process by requiring that the dispensary licenses be awarded to those working in communities and causes that benefit those that have been most impacted by the prohibition of cannabis. According to NYC.gov:

“The Conditional Adult-Use Retail Dispensary (CAURD) License is the first retail dispensary license to be distributed for legal adult-use cannabis sales in New York State and will be awarded to businesses owned by justice-involved New Yorkers and close family members, setting a foundation for an equitable industry.”

The Office of Cannabis Management’s website states that these licenses will help speed up “the delivery of investments into communities across New York State that were impacted by the disproportionate enforcement of cannabis prohibition.”

New York’s Social Equity Servicing Corporation (SESC) is responsible for helping to locate potential locations for these license holders to operate from. Once sites have been acquired, the DASNY will build out roughly 150 turnkey sites for entrepreneurs that receive the CAURD licenses. In the meantime, though, implementing and regulating delivery services will help the adult retail market in the state become operational and hopefully, in return, help to snub out illegal businesses selling potentially harmful products to consumers.

New York Has a Stockpile That Needs to Be Sold Sooner Rather Than Later

This should also help to address the issue of a stockpile surplus of cannabis in the state. In the spring of 2021, New York began issuing cultivation licenses to more than 200 farms to cultivate cannabis for the retail market. Seeing how sales have yet to begin and cultivation is way ahead of the game, it has resulted in what some describe as a “languishing stockpile.”

The OCM estimates there is around $300,000 of cannabis currently being stored, just waiting for the industry to become operational. Bloomberg states that “based on an average estimated wholesale value of about $2,500 per pound, according to the Cannabis Benchmarks, a research firm that tracks wholesale marijuana prices nationwide, the horde could be worth as much as $750 million.”

This is a huge concern. Cannabis eventually starts to lose its quality and potency, and the longer it is stored, the more susceptible it is to contamination and the development of things such as mold or mildew. Could this be why state regulators recently removed testing limits on potential contaminants such as bacteria, mold, and yeast after being convinced by outdoor cannabis cultivators that the original regulations were overly restrictive?

Hopefully, the passing of regulations for delivery services will help to move this stockpile and prevent any issues before they arise. With any luck, hopefully, New Yorkers and the millions of adult tourists that visit the state each year will soon have access to adult retail cannabis storefronts. Until then, adults in the state should soon be able to simply place an order online or over the phone and have their goods delivered.