NYC Cannabis Regulators Double Down on Conditional Dispensaries

The Office of Cannabis Management will double the size of New York’s Adult Conditional Recreational Dispensary Program, increasing the maximum number of CAURD dispensaries to 300.

OCM chief executive Chris Alexander announced the expansion at a meeting of the Cannabis Control Board on Thursday. Alexander said the main reason the agency decided to expand the program is because a significant number of CAURD licensed business owners have told OCM they can provide their own display cases rather than accepting them through the DASNY CAURD loan program.

“In recognition of this large number of applicants, the ability of some of these individuals to offer their own locations, and for us to increase resources… and our desire to expand the market as quickly as possible, we are pleased to announce we are expanding the CAURD program to 300 licensees” , Alexander said.

As part of the expanded program, the first 150 CAURD-licensed businesses will be guaranteed DASNY space if they need it, Alexander said. This doesn’t necessarily apply to the second group of 150 people, but every business in the first group that forgoes the DASNY space means a better chance of accessibility for entrepreneurs in the second group.

Alexander said the expansion reflects the strong interest in CAURD licenses in the New York cannabis industry and the high level of expertise among over 900 applicants for the program.

While regulators welcomed Thursday’s expansion, rolling out the program has not been easy. While Gov. Kathy Hochul has promised at least 60 retail stores to open at this point, there are currently only four, with only one run by a “justice-connected person.” The New York State Dorm Administration, tasked with overseeing a $200 million public/private cannabis social capital fund, has been unable to raise $150 million in private capital for the CAURD program (with the remaining $50 million provided by the state). In addition, many applicants have also complained about the complex and cumbersome online application process, which some fear could mistakenly reject qualified applicants.

Cheryl Murray Powell, attorney and COO of nonprofit JUSTÜS Foundation, believes regulators are right to expand the CAURD program given how many qualified applicants have applied. Murray Powell represents some of CAURD’s applicants and licensees and hailed the expansion as an example of OCM listening to the community and taking action.

“I think it’s a great choice,” said Murray Powell. “I think this is forward-thinking leadership and I think it really shows the OCM’s respect for people who have been disproportionately affected by the cannabis ban.”

The CAURD program provides conditional adult dispensary licenses to people who have been convicted of a cannabis-related offense in New York City and have been in a profitable business for at least two years, in addition to certain other requirements.

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However, a significant part of the program remains banned. Late last year, Michigan-based CAURD’s Variscite NY One petitioner filed a lawsuit after being found incompetent by the state because the company is 51% owned by an individual with no significant connection to New York City and a cannabis conviction in Michigan. CAURD rules require the applicant to have been convicted of a cannabis-related offense in New York and have a “significant presence” here.

In November, U.S. District Judge Gary Sharp issued an injunction preventing New York State from issuing CAURD licenses in five of the 14 regions where the agency licenses CAURD dispensaries. The injunction covers applicants from the Finger Lakes, Central New York, Western New York, Mid-Hudson, and Brooklyn. This ban remains in effect and is going through the Court of Appeal.

At Thursday’s CCB meeting, the board also gave final approval to packaging, labelling, marketing and advertising rules; laboratory testing and cannabis research.

Newly approved packaging, labeling, marketing and advertising regulations include provisions that companies may not sell their products in packaging that features “cartoons”, “bubble or other cartoon type” or “bright colors that are ‘neon'” appearance.” The rules also prohibit outdoor advertising for cannabis companies (such as billboards) unless “the licensee has reliable evidence that at least 90%, unless otherwise determined by the Authority, of the audience for the ad, is reasonably expected to be twenty-one years of age or older.”

Before the CCB approved the rules, Hal McCabe, director of government relations for the New York Cannabis Association, told NY Cannabis Insider that CANY believes the outdoor advertising rule will disproportionately harm New York marijuana growers.

“We have to admit that the ban on cannabis advertising on billboards and cannabis pharmacies in particular calls into question our own business in New York because if you run the state at all, you will see cannabis billboards everywhere. either in other states or on reservations.” McCabe said. “This puts our own legal business at a huge competitive disadvantage.”

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