New York OCM changes for dispensaries to open faster

The new initiatives that were announced will help support cannabis entrepreneurs by lowering costs and fast track the application process so social justice licensees.

On June 15th, the Cannabis Control Board will issue the first licenses to qualified Adult-Use Retail applicants.

Two additional adult-use cannabis dispensaries will soon open in Farmingdale and Syracuse, according to the New York Office of Cannabis Management (OCM). These mark the opening of the first Conditional Adult-Use Retail Dispensaries (CAURD) in the Central and Long Island regions of New York.

There are 12 approved dispensaries in New York; nine have physical premises, and the other three are delivery-only businesses that will ultimately open permanent facilities. In this blog, we’ll explore the changes to the CAURD program and Seeding Opportunity Initiative and the delivery opportunities that’ll impact retail dispensaries.

CAURD Licenses and the Seeding Opportunity Initiative

The Seeding Opportunity Initiative allows those most affected by the unfair enforcement of cannabis prohibition to run New York’s first legal adult-use retail shops or charitable organizations whose services include assistance for recently jailed people. Exclusively sold in adult-use dispensaries, farmers in New York State make cannabis products. 

A first-of-its-kind New York State Cannabis Social Equity Investment Fund (Fund) was introduced by Governor Hochul in April 2022 and authorized by the Legislature to give startup funding for cannabis shop licensees involved in the judicial system. The $200 million fund was initially seeded with $50 million in State funding, which will eventually be returned with tax revenue from cannabis sales. DASNY will continue to raise the remaining $150 million from the private market.

What changes are being made to the program based on the CAURD licensee’s feedback?

After some programmatic adjustments in the fall of 2022, the fund now gives CAURD licensees the option to choose a location suggested by DASNY or bring their own. Initially, this program was intended to provide CAURD licensees with capital help for opening dispensaries.

Much more upfront information and much more freedom in terms of locations:

1. DASNY will immediately start looking for new locations that would better suit the business models of some CAURD licensees, such as providing smaller sites with reduced rents and refurbishment expenditures.

2. DASNY also will cap build-out costs at $1.3 million in NYC and $1.1 million for Upstate (there were no caps previously), which reduces the pool of potential locations to those that can be opened more quickly and require comparably less effort.

3. To give the licensee even more specific pricing and design information before they commit to a location, DASNY is redesigning the design and construction process.

Providing Additional Capital through a $5 million CAURD Capital Loan Program: 

1. CAURD licensees who have secured their location will now be eligible to apply for an up to $100,000 low-interest loan from DASNY (anticipated at 5%) to cover costs associated with the build-outs of dispensaries. 

2. Once a CAURD licensee building their dispensary gets their permanent license, finances the build-out, and opens, the fund will provide a “reimbursement” loan proceeds to cover up to $100,000 in capital costs. 

3. A new search tool is launched:

 1. DASNY is committed to streamlining the process for CAURD licensees looking to secure their retail dispensary location without Fund support. 2. A search tool will soon be available that will allow licensees to determine if their proposed location meets OCM regulations regarding proximity to schools, churches, and other dispensaries. 3. This will help licensees more quickly determine if sites of interest to them are eligible and available. 

The opportunity for entrepreneurs to launch retail dispensaries with cannabis deliveries

All CAURD licensees were permitted to start their businesses by providing delivery services using motor vehicles, motorized scooters, and bicycles as they searched for a permanent retail space, according to a December 2022 OCM announcement. This strategy was put in place to support the CAURD business owners and help kick-start the cannabis market in New York State.

Since the adaption, three delivery-only temporary dispensaries have opened, and two more are scheduled to do so in the coming three weeks.

The case from the previous year has also been resolved, allowing the CAURD program to go forward and issue licenses to applicants.

How we can help?

At Cannabis License Experts, we provide you with the guidance to plan your cannabis business, acquire funding, navigate the legal requirements, and acquire the appropriate cannabis license for your operations. As the New York cannabis industry develops, more and more licensed producers will be needed to meet the demands of consumers.

Cannabis License Experts offers support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs, Preventive Control Plans (PCPs), and more.

Our Edibles Compliance division can provide you with a solid plan for your edibles business to help get your products on store shelves.

Contact us today to discover how we can license and legalize your cannabis business to meet federal or provincial regulations.