Could New York’s limited medical cannabis program hamper a new adult-use market?
Published 13 hours ago | By
Jeff Smith
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New York could potentially become one of the biggest marijuana markets in the world, but its existing medical cannabis program is heavily regulated and has experts questioning how a possible adult-use market would fare.
Gov. Andrew Cuomo wants to steer
adult-use legalization through the state Legislature by next spring.
And next week’s legalization vote in New Jersey likely will only increase pressure
on New York to do so, if not hasten the timeline.
But a strong transition to a commercial recreational marijuana market in New York could be hampered by the fact the state’s MMJ program remains one of the most restrictive in the country. Hurdles include a ban on smokable flower, limited licenses, a relatively small number of dispensaries and patient-access issues.
“It’s certainly going to be challenging for New York,” said Rob DiPisa, co-chair of the cannabis law group at New Jersey-based Cole Schotz.
New Jersey
has been expanding its MMJ program, DiPisa noted, “while New York has really been stagnant. There hasn’t been a lot of activity there, and because of that, there aren’t a lot of operators online.
“So when New York flips to adult use, I think they are going to have even a harder time than New Jersey will to meet the demand, which … could just permit the black market to continue to thrive in the New York area.”
Few companies … large population
New York has only 10 vertically integrated MMJ operators, each allowed to operate four dispensaries.
That’s despite a population of around 20 million and more than 65 million tourists annually before the coronavirus hit.
As of Oct. 20, 128,718 patients were certified to receive medical marijuana, according to New York Department of Health figures.
The
2020 Marijuana Business Factbook projects that New York MMJ sales will reach $60 million to $70 million this year, despite the state’s huge population (see chart above).
By comparison, Florida – which started its MMJ program at about the same time as New York and has roughly the same population – features 435,000 patients, 286 dispensaries and projected annual sales of more than three-quarters of a billion dollars.
In the past 20 months, Florida has lifted bans on
smokable flower and
edibles.
Cuomo wanted to legalize adult use last spring through his budget bill but
abandoned the effort because of the coronavirus pandemic.
The governor is beginning to push hard again, as coronavirus impacts have exacerbated a multibillion-dollar budget deficit.
Public sentiment for recreational legalization is strong:
61% favor legalization and only 30% are opposed, according to a poll this month by Spectrum News/Ipsos.
New York’s existing MMJ operators believe they have a good argument to be
granted first entry into the adult-use market.
“I struggle to conceive of a different way of rolling out an adult-use program in New York that still accomplishes the goal … of generating immediate revenue,” said Jeremy Unruh, senior vice president of public and regulatory affairs for Illinois-based PharmaCann.
But they’ll need to persuade Cuomo and New York lawmakers.