Groups representing the legal cannabis industry have told Governor Hochul’s cannabis regulator that a dramatic increase in the number of cannabis dispensaries could have “dire consequences” for current licensed operators. He warns.
Damian Cornwell, president of the New York Cannabis Association, noted that state regulators have not yet eliminated the swarm of illegal cannabis operators.
“I am writing this letter to express my deep concern about the Cannabis Control Board’s (CCB) recent discussion of dramatically increasing the number of cannabis licenses in the state,” said Cornwell, founder of Binghamton cannabis store Just Breeze. “I am writing,” he said. Twelve letters were sent to State Cannabis Control Commission Chair Tremaine Wright and members of the Cannabis Advisory Committee.
“We believe this approach, if introduced without proper analysis and stakeholder input, will have dire consequences for the emerging industry and public health.”
Hochul and state regulators have been criticized for a slow and difficult rollout since the first licensed pot stores opened in December 2022.
Last year, lawsuits delayed licensing and store openings, leaving farmers with piles of damaged marijuana crops.
But since the lawsuit was resolved last fall, state officials have stepped up issuing licenses and approved dispensaries to open.
There are now 103 legal marijuana stores open across the Empire State, up from 26 stores last November.
More than 400 cannabis licenses, from growers to retailers, have been issued by state regulators this year, including 101 at the April 11 Cannabis Control Commission meeting.
But Cornwell advised careful consideration rather than recklessly overwhelming emerging markets.
“We strongly believe that issuing licenses without fully understanding market capacity will lead to oversaturation, business failure, and unforeseen public health risks,” he said.
“New York’s cannabis industry is still in its infancy, so many licensed retailers already face the challenge of competing with the illicit market. Flooding the market with additional licenses will only exacerbate this problem. It could lead to a wave of closures, undermining the state’s social equity goals and leaving vulnerable entrepreneurs in an unsustainable market.”
To make his point, Cornwell told the Cannabis Advisory Board in a letter that it conducts a thorough market analysis and consultation with stakeholders before making any major policy decisions affecting the industry. I called out some in bold.
In a subsequent interview with the Post, Cornwell said the legal cannabis industry cannot be compared to other retail markets.
Unlike other industries, licensed cannabis stores are still considered an illegal drug under federal law and are therefore prohibited from deducting regular business expenses for income tax purposes.
“Cannabis retail stores face a higher tax burden compared to other retail businesses because they cannot deduct expenses such as rent, employee wages, marketing costs, and other operating expenses. “It can have a significant impact on profitability and financial viability,” he said.
