Buffalo, N.Y. (WBEN) - Beginning Thursday across New York State, the Office of Cannabis Management officially opens the application process for retail marijuana licenses, otherwise known as Conditional Adult-Use Retail Dispensary (CAURD) licenses.
These licenses are a key pillar of the New York State Seeding Opportunity Initiative. Through the initiative, New York’s first legal adult-use retail dispensaries will be operated by those most impacted by the enforcement of the prohibition of cannabis, who will make the first sales of adult-use cannabis in New York with products grown by New York farmers.
"This is the first dispensary application window that is opened up in New York State since legalizing adult use, and the Office of Cannabis Management has made a very specific qualifying criteria for those who have been part of a justice-involved or a conviction of a marijuana-related offense in New York State. Or if you're a family member directly related to a person who's had justice involved," said Aleece Burgio, marijuana law expert and General Counsel and Strategic Advisor at MJI Solutions. "Then the other ticker for being able to apply is you have to show that out of the two out of three years, you've had qualifying business experience, which is, at this moment, making it a very strict requirement to be able to enter into this application window."
When it comes to the interest level from businesses applying for their CAURD license over the coming days and weeks, it is anticipated that a large number of people will file their applications forms.
"I am particularly pleased with the fact that they're making the first licenses available to those who have been impacted most negatively by the war on drugs, and I believe that there are any number of people in-and-around the Western New York, Buffalo area who will apply, and will be eligible," said New York State Assemblywoman Crystal Peoples-Stokes on the matter.
According to Burgio, the way this process has been working is these CAURD licenses are tied to the $200 million seed initiative loan that is coming from New York State and will be finding real estate for those who intend to be awarded CAURD licenses. However, they're only looking in places in which the localities haven't opted out.
"We intend to see probably between 100, 150, 200 dispensaries opening up 'hopefully' by the end of the year, early next year," Burgio said. "To be honest with you, that has to happen in order for our supply chain to continue to move forward. At the moment, we have licensed growers, we have licensed processors, but they don't have anywhere to sell. So you've got to get these retail dispensaries up-and-running in order for this weed to not have an expired shelf life."
The application process is not expected to be labor intensive for anyone applying. There will be a $2,000 nonrefundable application and licensing fee upon applying, but it's really more so about whether or not you qualify based on some of these exceptions the state has written in the regulations for applying.
"There are only going to be so many people who qualify for these conditional retail dispensaries, just given the strict nature of who qualifies," Burgio explained. "Those who do apply, the way that it works is they'll apply with proposed locations that they'd like to have their dispensary in. For example, you get to have five locations, but the state is already finding all of its retail locations to place these dispensary licensees. So you might pick Buffalo, Rochester, Niagara Falls, and you do your No. 1 to No. 5. Then if you're selected, based off a scoring system, you are placed into one of these retail stores. The state then pays for your construction, your renovations and any type of equipment financing."
As for a timeframe between the start of the application process and the anticipated opening of the first licensed retail marijuana dispensary, it is expected to be a very narrow window.
"They're going to have this application window, I think it's open for 30ish, maybe more days, and then New York State has to find and engage in the leases with all these landlords in order to put these licensees in these retail dispensaries. So the state has a lot of work ahead of them," Burgio said. "They're working with CBRE to find the locations. Those locations have to be in accordance with the law, in terms of how far away from a school are you, from a park, from a house of worship? And then they have to get those retail dispensary licensees into those buildings and be able to have them up-and-running, product on the shelves, being able to sell to consumers by early next year or end of this year. That's a very tight timeframe, but that's what we've been told and we understand that's going to happen."
For Assemblywoman Peoples-Stokes, she's anticipating that the state will see some doors opening by January, or at least by the end of winter.
"There will be some, probably, 150 of them or so initially that will be open, but if you compare the cannabis industry to the existing State Liquor Authority laws, there's probably going to end up, in the future being, some 2,000-3,000 stores," Peoples-Stokes said. "Initially, we'll start out with this 150, and then there will be opportunities all along the way for other people to apply."
While Burgio says she is hopeful that some CAURD licenses will be issued and dispensaries can be opened by the end of the year, the process could find itself dragging on for some applicants.
"The people who intend to go for these CAURD licenses, you're going to apply, you'll have to show that you qualify under those business requirements with any type of financial accounting that they need to see that you've had a net profit. Then after you apply, you kind of wait, but that doesn't mean necessarily that you're going to sit there and wait for the awarding of this license. You still have to make sure you have financial backing, because these loans don't cover product, which is really important," she said. "Let's emphasize that: Those who are applying for these CAURD licenses, they'll get their real estate from the state, but they're not provided any other additional funding to actually get you jumpstarted, which is a very big misconception right now in New York State about what the CAURD licensed loan actually covers. So those who don't have that much money and financial backing may not apply, because they'll have to spend a million in products to get up-and-running. So there's a lot of things that, hopefully, people are thinking about before they apply."
Hear more of our conversation with Burgio in the player below:
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