NEW YORK (420CanNews) — New York is ringing in the one-year anniversary of its recreational marijuana market launch by approving six established medical marijuana companies. These multistate operators (MSOs) will be entering the adult-use market on December 29, much earlier than originally scheduled, to spur market growth and expand access to better compete with the still-thriving illicit cannabis trade.
The six MSOs were initially given a three-year waiting period to allow small and social equity businesses the opportunity to begin their businesses. However, red tape delayed that goal and the larger effort of expanding legal access to marijuana.
Recreational Sales Approved for 6 Prominent MSOs
The companies greenlit to sell adult-use cannabis include Columbia Care, Curaleaf, Etain/RIV Capital, Acreage/NYCANNA, PharmaCann, and Cresco/Valley Agriceuticals. All six are established MSOs with the resources and experience needed to help accelerate the expansion of retail access for New York’s recreational market.
These approvals are also the first granted since a key lawsuit settlement allowed the state’s remaining medical operators to transition into recreational dispensaries. While the Office of Cannabis Management (OCM) had hoped to process a gradual wave of applications in 2023, the Cannabis Control Board (CCB) opted to spur market expansion by fast-tracking these experienced MSOs.
Insiders predict that these six MSOs will rapidly maximize retail impact for the coming year despite being limited to launching in one location for now.
Policy Reversal Opens Market to MSO Expertise
The state initially established a three-year waiting period before transitioning MSO-owned medical dispensaries to a recreational model to prioritize small and social equity businesses gaining a market foothold. However, licensing delays, lawsuit injunctions stalling approval, and subsequent supply shortages led regulators to allow these cannabis giants earlier entrance to help expand retail access and compete with the still-bustling illicit market. As of now, the illegal drug market accounts for an estimated 50% of New York’s annual cannabis spending.
Although controversial given initial equity promises, regulators determined MSOs possessed the infrastructure to make an immediate dent in illicit sales through discounted costs and more product variety tailored to various consumer demographics.
Shift in Direction Squeezing Out Small Companies?
Smaller businesses facing mounting obstacles must now contend with major corporations entering the fledgling recreational arena.
The OCM is ending the Cannabis Growers Showcase program on December 31 after utilizing it for over a year. The goal in part was to help craft cultivators struggling to sell excess inventory amidst the lack of retail options. Despite the program generating over $4 million in sales in 2022, the OCM cited a need to focus entirely on licensing and new regulations rather than continuing the emergency program.
The simultaneous closing of programs benefiting small businesses alongside opening the doors for MSOs further cement early concerns over equitable market access. Industry groups have already vowed to pressure regulators to fulfill initial social equity commitments amidst corporate expansion.
Major Companies Outline Adult-Use Sales Timelines
Columbia Care plans to open its first recreational shop in its existing Brooklyn dispensary on December 29. The company is known for its pharmaceutical-grade products targeting wellness-minded consumers.
Curaleaf received approval for its Newburgh dispensary and will launch on December 29. It is among the largest cannabis companies globally, with billions in annual revenue.
Etain/RIV Capital intends to commence adult-use sales at their established White Plains medical dispensary. The joint venture represents two MSO giants rapidly expanding in key U.S. cannabis markets like New York and New Jersey.
Market Growth Expected Despite Equity Concerns
To partially address equity worries, the six MSOs approved must reserve 50% of their shelf space for products they do not own. This policy supports fledgling recreational operations through partnerships and wholesale deals as the market develops. With a larger supply volume and a more significant distribution network, MSOs are expected to develop New York’s projected $4 billion-plus recreational market. More diverse product variety at lower costs will help to lure consumers away from the enduring unregulated market.
However, while the approvals will dramatically expand New York’s legal recreational market, the simultaneous termination of the Cannabis Growers Showcase raises questions about equitable access for small businesses compared to deep-pocketed corporations. This two-pronged approach is likely to start a war over market share as cannabis behemoths and the little guys strive to keep their dreams of growing legal weed alive.
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— Story Filed By 420CanNews Staff
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