As New York State embarks on its journey to establish a legal cannabis market, the Office of Cannabis Management (OCM) is facing significant challenges. Despite Governor Kathy Hochul’s assurances earlier this year, the OCM has processed only about 1,500 of the 2,232 non-provisional applications submitted. Compounding this issue is a staggering backlog of 4,558 provisional applications that have yet to be reviewed, raising concerns among industry advocates and aspiring entrepreneurs alike.
Governor Kathy Hochul’s Promises
Earlier this year Governor Hochul promised increased enforcement against illicit cannabis operations and a commitment to accelerate the processing of cannabis license applications. While it is true that through the efforts of a City-Wide Multi-Agency Task Force 779 stores were padlocked and more than $63 Million worth of illegal substances were seized, these efforts still feel like a drop in a bucket. Across the city, communities are still inundated with illicit cannabis shops that intentionally present themselves as legitimate lawful businesses.
The Backlog and Stakeholder Concerns
The Governor’s pledges aimed to address growing concerns about the prevalence of unregulated cannabis sales, which have proliferated in the absence of a fully functional legal market. However, the stark contrast between these promises and the current reality has left many stakeholders disillusioned. With just 1,500 non-provisional applications reviewed, the backlog of over 5,200 more is a stark reminder of the hurdles facing the state's cannabis rollout. The lack of progress in processing both non-provisional and provisional applications undermines the state's efforts to combat the illicit market effectively.
Successes Among Licensed Dispensaries
Despite these challenges, legal dispensaries that have managed to obtain a license and open have demonstrated that consumers are eager to purchase safe, regulated legal cannabis. Licensed cannabis dispensaries in New York City have reported an average sales increase of 72 percent. Additionally, one-third of these stores have noted sales surges of over 100 percent since enforcement actions against illicit cannabis operations commenced. This increase reflects consumer confidence in legal cannabis products and demonstrates the strength of demand within the market, even as the state grapples with processing applications and establishing a fully operational framework.
Future Prospects for New York’s Cannabis Market
As OCM gains experience as an organization, the processing of cannabis applications is likely to improve and accelerate in the future. OCM is a relatively young organization, which has led to challenges in navigating the complexities of cannabis regulation. However, as the agency trains new staff and builds its capacity, it will become more adept at handling applications and streamlining the review process in order to eventually address the backlog. Other states which have built a legal cannabis market from the ground up have undergone similar growing pains. Although New York is currently navigating significant challenges, there are signs of gradual improvement. If the governor and New York city authorities remain persistent in their efforts, there are signs that a healthy legal cannabis market could emerge by the end of 2025.
