2023 Year in Review: New York's Cannabis Industry Milestones
Introduction
2023 marked a pivotal year in the evolution of New York's cannabis industry, a period rich with significant developments and milestones. This year witnessed the unfolding of the Marihuana Regulation and Taxation Act (MRTA), a landmark legislation that set the stage for a transformative era in cannabis regulation and commerce within the state.
The industry's growth trajectory was not just about sales and profits; it also encompassed crucial legislative reforms, advancements in medical cannabis, and strides towards social equity.
In this article, we delve into the timeline of these key events, exploring how they shaped the landscape of cannabis in New York. From the continued implementation of MRTA in early 2023 to the release of the Office of Cannabis Management's annual report at year's end, we will provide a comprehensive overview.
Our focus will also extend to the impact on communities, medical cannabis advancements, and the challenges faced during this dynamic year. Join us as we navigate through these developments, offering insights into what they mean for the future of cannabis in New York.
The Legislative Road to Legalization
New York's journey towards cannabis legalization has been marked by significant legislative milestones, culminating in the transformative Marihuana Regulation and Taxation Act (MRTA). Prior to MRTA, New York's stance on cannabis was largely prohibitive, with strict laws governing its use and distribution.
Enactment of MRTA
The turning point came on March 31, 2021, with the enactment of MRTA (1). This law was a game-changer, legalizing recreational cannabis use for adults aged 21 and over. It laid the foundation for a regulated market, detailing guidelines for the sale, taxation, and regulation of cannabis.
The MRTA was not just about legalizing cannabis; it was also about addressing past wrongs. It aimed to rectify the disproportionate impact of cannabis prohibition on communities of color, introducing measures for social equity and justice.(2)
Towards a Regulated Market
As New York moved into 2023, the focus shifted to the practical aspects of MRTA's implementation. This involved setting up a regulatory framework, issuing licenses for cannabis businesses, and establishing guidelines for cultivation, distribution, and retail.
The state also prioritized social equity initiatives, ensuring fair access to the emerging cannabis market for those historically affected by cannabis laws.
Timeline of Major Developments in 2023
Early 2023: Cannabis Compliance Training & Mentorship program
The year 2023 began with a significant initiative from the Office of Cannabis Management, focusing on compliance and skill development in the cannabis sector. In January, they introduced the Cannabis Compliance Training & Mentorship program. (3)
The OCM, a pivotal entity established under the Marihuana Regulation and Taxation Act (MRTA), operates under the oversight of the Cannabis Control Board (CCB). Tasked with a significant role, the OCM is responsible for implementing a comprehensive regulatory framework encompassing medical, adult-use, and cannabinoid hemp sectors of the cannabis industry. In a move to strengthen leadership, Governor Kathy Hochul appointed Christopher Alexander as the Executive Director of the OCM and former Assembly Member Tremaine Wright as the Chair of the Cannabis Control Board on September 2, 2021.
This program was specifically designed for individuals possessing advanced skills in farming, cultivation, horticulture, or those with substantial experience in manufacturing, processing, packaging, or branding products meant for human consumption.
This initiative was particularly well-received by some of New York's legacy operators in the cannabis industry. They viewed it as a valuable opportunity to gain a foothold in the legal cannabis market.
March 2023: Legislative Discussions and Licensing Challenges
In March 2023, New York's cannabis industry faced a critical juncture. Despite the aspirations to create an equitable market, the state encountered several setbacks. The primary challenge was the slow pace of adult-use cannabis licensing.
Only four adult-use retailers were operational, falling short of the anticipated market expansion. (4) This sluggish progress in licensing was attributed to various factors, including litigation, lack of capital, and delays from the Office of Cannabis Management (OCM).
The Marijuana Regulation and Taxation Act (MRTA) had set an ambitious goal of allocating 50% of adult-use licenses to social and economic equity applicants. These applicants included individuals from communities disproportionately impacted by cannabis prohibition, as well as minority- and women-owned businesses, disabled veterans, and financially distressed farmers.
In response to these challenges, the OCM announced plans to double the number of conditional retail licenses, hoping to accelerate the market's growth and bring more retailers online in 2023. This move was seen as a step towards fulfilling the state's commitment to an equitable cannabis industry and addressing the initial hurdles in the licensing process.
May 2023: New Enforcement Legislation
In May 2023, Governor Kathy Hochul took significant steps to strengthen New York's cannabis market. A key development was the passage of legislation aimed at curtailing unlicensed cannabis storefronts.
This move was part of a broader effort to ensure a safe, regulated market and to eliminate illegal cannabis activities. Enforcement officers from the Office of Cannabis Management (OCM) and the Department of Taxation and Finance were actively involved in inspecting shops, seizing products, and shutting down unlicensed operations. By this time, over 350 locations had been inspected, leading to the seizure of more than 11,000 pounds of illicit cannabis (5).
In addition to these enforcement efforts, Governor Hochul announced the opening of a dozen new adult-use cannabis dispensaries across the state, from Brooklyn to Buffalo.
Mid-2023: Cannabis Growers Showcase
Mid-2023 saw the innovative Cannabis Growers Showcase. This event, hosted by the Office of Cannabis Management, spanned 141 days across 43 cities (6).
It provided a platform for local growers to display and market their products, fostering a connection between producers and consumers.
The showcase played a significant role in promoting New York-grown cannabis strains, highlighting the diversity and quality of locally produced cannabis.
Late 2023: Sales and Licensing Updates
As the year progressed, the cannabis market in New York showed significant growth. Sales figures were promising, with projections indicating over $150 million in revenue (7).
The state also received an overwhelming response to new licensing applications, with over 7,000 submissions (8) This surge in interest demonstrated the market's potential and the enthusiasm of entrepreneurs to participate in New York's cannabis industry.
In summary, 2023 was a landmark year for New York's cannabis industry, marked by significant legislative and regulatory advancements, market growth, and a strong focus on social equity and community development. The developments of this year laid a solid foundation for the future of cannabis in the state, promising a thriving and equitable market.
Medical Cannabis Advancements
In the realm of medical cannabis, New York saw significant progress in 2023. The state's Medical Cannabis Program expanded considerably, with over 121,900 patients registered by the end of the year (9).
This increase in patient registration was a clear indicator of the growing acceptance and reliance on medical cannabis for various health conditions.
A major development was the introduction of an auto-registration process. This streamlined system made it easier for patients to access medical cannabis, eliminating previous bureaucratic hurdles. Patients could now receive their certifications from healthcare providers and immediately access dispensaries, enhancing the efficiency and accessibility of the program.
These advancements in New York's medical cannabis sector were not just about increasing numbers; they represented a broader shift towards recognizing and integrating medical cannabis as a vital component of healthcare. With these changes, patients in New York gained better access to alternative treatments, marking a significant step forward in the state's healthcare landscape.
Conclusion and Future Outlook
Reflecting on 2023, New York's cannabis industry has made significant strides. The year was marked by significant achievements, from the expansion of the adult-use market to strides in medical cannabis and a strong focus on social equity. These developments have not only shaped the current landscape but also set the stage for what lies ahead.
Looking ahead to 2024 and beyond, the New York cannabis industry is poised for continued growth and evolution. With the foundation set in 2023, the focus will likely shift towards further market expansion, enhanced regulatory frameworks, and sustained efforts in social equity. The industry's trajectory suggests a burgeoning market with opportunities for innovation, community engagement, and economic development.
As we observe these developments, your insights and perspectives are invaluable. Please share your thoughts and comments below on what you expect or hope to see in New York's cannabis industry in the coming years.
References
Marihuana Regulation and Taxation Act (MRTA). Office of Cannabis Management. https://cannabis.ny.gov/marihuana-regulation-and-taxation-act-mrta
New York Cannabis Law Prioritizes Social, Economic Equity. news.bloomberglaw.com. https://news.bloomberglaw.com/cannabis/new-york-cannabis-law-prioritizes-social-economic-equity
Cannabis Compliance Training & Mentorship Program. Office of Cannabis Management. Accessed January 5, 2024. https://cannabis.ny.gov/cannabis-compliance-training-mentorship-program-0
Project MP. New York. MPP. Accessed January 5, 2024. https://www.mpp.org/states/new-york
Governor Hochul Announces New Adult-Use Cannabis Dispensaries Opening Before End of Year | Governor Kathy Hochul. www.governor.ny.gov. Accessed January 5, 2024. https://www.governor.ny.gov/news/governor-hochul-announces-new-adult-use-cannabis-dispensaries-opening-end-year
NY CANNABIS MARKS ONE YEAR of LEGAL ADULT- USE SALES, PREVIEWS ANNUAL REPORT with over $150 MILLION in SALES, SHARES INSIGHTS into MARKET + RECENT APPLICATION WINDOW. Accessed January 5, 2024. https://cannabis.ny.gov/system/files/documents/2023/12/ny-cannabis-marks-one-year-of-legal-adult.pdf
Gelsi S. New York State legal cannabis market sales off to a slow start in first year. MarketWatch. Accessed January 5, 2024. https://www.marketwatch.com/story/new-york-states-legal-cannabis-market-gets-off-to-a-slow-start-with-150-million-in-sales-in-its-first-year-e87d1fba
Schroyer J. About 7,000 Adult-Use Cannabis Applications Estimated in New York. Green Market Report. Published December 20, 2023. Accessed January 5, 2024. https://www.greenmarketreport.com/about-7000-adult-use-cannabis-applications-estimated-in-new-york
Office of Cannabis Management. Office of Cannabis Management. Accessed January 5, 2024. https://cannabis.ny.gov/system/files/documents/2023/12/annual-report-2023-final.pdf
