From staff/wire reports
“Forty percent of the marijuana that is consumed in New York City is grown in Oklahoma.”
State Attorney General Gentner Drummond made that statement in June while speaking to the Oklahoma Press Association.
A recent Associated Press story lends credence to that claim.
According to the AP, New York officials launched legal recreational marijuana sales by promising many of the first retail licenses to people who have past drug convictions, “hoping to give people harmed by the war on drugs a chance to succeed before competitors crowded in.”
But more than nine months after sales began, the AP reported, only about two dozen state-sanctioned dispensaries have opened their doors. “Legal challenges over the state’s permitting process have left more than 400 provisional licensees in limbo.” Marijuana farmers are reeling because there are too few stores to sell their harvest.
In contrast, Oklahoma has licensed 2,670 dispensaries, 1,636 processors, and 5,652 growers, the Oklahoma Medical Marijuana Authority website shows.
Critics blame New York’s slow retail growth partly on bureaucratic issues, like delays in setting up a $200 million ‘social equity’ fund to help applicants open shops. The rollout also was hobbled by lawsuits on behalf of people and businesses excluded from the first wave of retail licenses.
New York regulators recently opened up a 60-day general application window to grow, process, distribute or sell marijuana, expecting to issue more than 1,000 new licenses. New rules also will allow companies licensed to grow and sell medical marijuana in New York to get into the recreational market.
The moves are expected to boost the number of legal dispensaries in “a market now dominated by black-market sellers who opened retail stores without a license.” But the prospect of competing with the medical providers worries some farmers and retailers who fear being squeezed by deeper-pocketed companies before they’ve had a chance to establish themselves.
OK’s license fees a fraction of NY’s
Under new regulations, New York’s medical marijuana providers could begin retail recreational sales at one of their existing dispensaries by Dec. 29. They could begin selling recreational marijuana at two more dispensaries six months after that. The entry price for those companies is steep: a $20 million licensing fee, with $5 million due upfront. “But multiple companies are expected to jump in,” the AP reported.
In Oklahoma, multiple lawsuits have been filed challenging House Bill 2179, which increased medical marijuana licensing fees. HB 2179 was signed into law in May 2022 but went into effect a year later, on June 1, 2023.
Prior to the effective date, licensing fees for medical marijuana growers, dispensaries, processors and laboratories was $2,500.
HB 2179, though, imposes tiered licensing fee for growers and processors. For example, a grower applying to renew its license could fall into Tier 7 and be charged a $50,000 license fee. A processor in Tier 3 would have to pay $10,000 for the license.
Dispensaries, after paying an initial $2,500 license fee, are charged a fee that’s based on a percentage of the dispensary’s state sales and excise taxes.
The fee for medical marijuana laboratories is a flat $20,000, eight times more than the fee prior to HB 2179.
“We expect New York to be the hub, or one of the hubs, for legal cannabis on the East Coast,” said Curaleaf CEO Matt Darin. Curaleaf, which operates in multiple states, has already invested $50 million in New York.
To guard against retail monopolies, the medical providers will be limited to three retail outlets. And in a nod to farmers, their shops will initially have to devote half their shelf space to products grown and processed by independent businesses.