{"id":10908,"date":"2025-11-13T13:22:36","date_gmt":"2025-11-13T13:22:36","guid":{"rendered":"https:\/\/cannabisindustryjournal.com\/?post_type=feature_article&amp;p=37915"},"modified":"2025-11-13T13:22:36","modified_gmt":"2025-11-13T13:22:36","slug":"inside-new-yorks-cannabis-rollout-whats-working-whats-not","status":"publish","type":"post","link":"https:\/\/cannitrol.com\/blog\/inside-new-yorks-cannabis-rollout-whats-working-whats-not\/","title":{"rendered":"Inside New York\u2019s Cannabis Rollout: What\u2019s Working, What\u2019s\u00a0Not"},"content":{"rendered":"<div id=\"wp_fb_like_button\" style=\"margin:5px 0 5px 5px;float:right;height:100px;\"><script src=\"http:\/\/connect.facebook.net\/en_US\/all.js#xfbml=1\"><\/script><fb:like href=\"https:\/\/cannitrol.com\/blog\/inside-new-yorks-cannabis-rollout-whats-working-whats-not\/\" send=\"true\" layout=\"standard\" width=\"450\" show_faces=\"false\" font=\"arial\" action=\"like\" colorscheme=\"light\"><\/fb:like><\/div><div><img src=\"https:\/\/cannitrol.com\/blog\/wp-content\/uploads\/2025\/11\/inside-new-yorks-cannabis-rollout-whats-working-whats-not.jpg\" class=\"ff-og-image-inserted\" \/><\/div>\n<p><span data-preserver-spaces=\"true\">A panel discussion at the recent Business of Cannabis event in NYC analyzed the serious issues still facing the industry rollout in New York. What has<\/span> <span data-preserver-spaces=\"true\">been touted<\/span> <span data-preserver-spaces=\"true\">as a social equity-first initiative has<\/span> <span data-preserver-spaces=\"true\">been riddled<\/span> <span data-preserver-spaces=\"true\">with significant challenges and lawsuits.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">To date, the Office of Cannabis Management has awarded 56% of licenses to those who paid for the war on drugs. While this is the most any state has done to be fair, the road to success is still a long way off.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Panelist Ethan Nadelman, Founder of the Drug Policy Alliance, called New York the epicenter of racial inequity, where young men of color<\/span> <span data-preserver-spaces=\"true\">were overwhelmingly arrested<\/span> <span data-preserver-spaces=\"true\">on marijuana charges. Even though it has been a rocky rollout, and New York was a laughing stock for a couple of years, he praised the accomplishment so far and reminded everyone that it wasn\u2019t too long ago that the notion that people who have a marijuana conviction should even be allowed to get licensed was inconceivable. \u201cSo the kind of 180 on that, where people who actually have a conviction are in the head of the line, is a remarkable breakthrough development,\u201d he said.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Nadelman posed the questions: What will all of this look like 5 or 10 years from now? What percent will still be equity licenses? To what extent are just a small number of people benefiting from this equity thing? Will we see the continuing equity? Will it be meaningful? Were there better ways that<\/span> <span data-preserver-spaces=\"true\">equity might have been done<\/span><span data-preserver-spaces=\"true\">? Should the OCM be given a time limit to accomplish its goals, similar to other industries?<\/span><\/p>\n<h4><strong><span data-preserver-spaces=\"true\">The True Party of Interest Debate<\/span><\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">The conversation then turned to one of the<\/span> <span data-preserver-spaces=\"true\">biggest<\/span> <span data-preserver-spaces=\"true\">sticking points in the state\u2019s rollout \u2014 the<\/span> <em><span data-preserver-spaces=\"true\">True Party of Interest<\/span><\/em> <span data-preserver-spaces=\"true\">(TPI) rules, which determine who can invest and own across different parts of the supply chain.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Attorney David Feldman explained that while the rules<\/span> <span data-preserver-spaces=\"true\">were<\/span> <span data-preserver-spaces=\"true\">originally<\/span> <span data-preserver-spaces=\"true\">designed<\/span> <span data-preserver-spaces=\"true\">to prevent \u201cBig Cannabis\u201d from dominating the market, they\u2019re now creating unintended barriers for small operators. \u201cThey\u2019re actually hurting small businesses,\u201d he said, noting that restrictions prevent multi-state operators and out-of-state investors from putting capital into New York dispensaries if they own cultivation or processing assets elsewhere. \u201cSmall businesses need access to experienced investors and operators to survive, and right now, they can\u2019t raise that capital.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Simone Washington, Head of Equity at the Office of Cannabis Management, defended the policy\u2019s intent, emphasizing that the agency\u2019s Trade Practices Bureau<\/span> <span data-preserver-spaces=\"true\">was established<\/span> <span data-preserver-spaces=\"true\">to monitor ownership and ensure the market remains rooted in equity. \u201cWe hear the concerns,\u201d she said, \u201cbut we must protect the spirit of the MRTA and make sure this market primarily benefits people harmed by past drug laws.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Nadelman added that other states have found a more balanced approach. In Connecticut, for example, larger operators can hold minority stakes in equity businesses \u2014 a model he called a \u201cnet positive\u201d that brings both capital and expertise. He also cautioned that the industry must prepare for broader shifts ahead. \u201cIf federal legalization comes \u2014 and it might \u2014 many of these restrictions could vanish overnight. We need to be ready for what a national market could mean.\u201d<\/span><\/p>\n<h4><strong><span data-preserver-spaces=\"true\">A Call for Unity<\/span><\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">If the TPI debate highlighted how regulatory complexity is stifling opportunity, the next topic revealed an equally daunting challenge: the lack of unity across the industry itself. Despite sharing common goals, operators, activists, and policymakers often find themselves working at odds with one another \u2014 sometimes in court.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Moderator Sam Reisman noted that despite common ground under the pro-legalization umbrella, competing interests have fragmented the movement. Advocacy groups, equity operators, and businesses have pursued separate agendas, occasionally securing injunctions that slowed the entire rollout.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Ethan Nadelman acknowledged feeling \u201cdeeply conflicted\u201d as both a reform advocate and a board member of a multi-state operator, but emphasized that industry and activism have more in common than they think. \u201cWe all want intelligent regulation,\u201d he said. \u201cBad regulation helps no one.\u201d He praised collaborations like the Last Prisoner Project, which unites both sides to address lingering injustices from the War on Drugs.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Simone Washington called for more open communication, noting that \u201cpeople are very siloed\u201d and rarely come together to identify shared objectives.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Attorney David Feldman agreed, pointing out that the industry\u2019s fragmented advocacy sends mixed signals to lawmakers. \u201cWhat we need is a single, strong trade organization that represents all sides under one coherent vision,\u201d he said.<\/span><\/p>\n<h4><strong><span data-preserver-spaces=\"true\">The Double-Edged Sword of Federal Rescheduling<\/span><\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">As talk of federal rescheduling continues to swirl, panelists debated what moving cannabis from Schedule I to Schedule III could mean for New York\u2019s developing market. Moderator Sam Reisman noted that while the proposal has stalled, its potential ripple effects could be profound.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Attorney David Feldman outlined three<\/span> <span data-preserver-spaces=\"true\">major<\/span> <span data-preserver-spaces=\"true\">outcomes. First, eliminating IRS code 280E would allow cannabis operators to deduct ordinary business expenses for the first time \u2014 a \u201cgame changer\u201d that could lower effective tax rates from as high as 80% to something sustainable. Second, rescheduling would open the door to expanded research,<\/span> <span data-preserver-spaces=\"true\">long<\/span> <span data-preserver-spaces=\"true\">hindered under Schedule I restrictions.<\/span> <span data-preserver-spaces=\"true\">And third, Feldman said, it could enable the FDA to establish a federally recognized medical cannabis<\/span> <span data-preserver-spaces=\"true\">framework<\/span> <span data-preserver-spaces=\"true\">without new legislation.<\/span> <span data-preserver-spaces=\"true\">That, in turn, could pave the way for interstate commerce, trademarks, and institutional investment.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">But not everyone was optimistic. Simone Washington expressed concern that rescheduling could jeopardize New York\u2019s equity commitments. \u201cThis administration has shown it\u2019s anti-equity,\u201d she said. \u201cIf the federal government takes control, the businesses will swallow the market, and the equity operators will<\/span> <span data-preserver-spaces=\"true\">be pushed out<\/span><span data-preserver-spaces=\"true\">.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Ethan Nadelman echoed her caution, adding that full federal legalization \u2014 depending on how it unfolds \u2014 could also accelerate consolidation. \u201cWhen you open the door to interstate commerce, it\u2019s not just the MSOs,\u201d he warned. \u201cIt\u2019s Big Alcohol, Big Tobacco, and Big Consumer Goods that come rushing in. That could wipe out the small operators entirely.\u201d<\/span><\/p>\n<h4><strong><span data-preserver-spaces=\"true\">Fixing the Fallout from Proximity Rules<\/span><\/strong><\/h4>\n<p><span data-preserver-spaces=\"true\">Among the most contentious issues now facing New York\u2019s cannabis rollout is the recent reinterpretation of the state\u2019s proximity rules, which prohibit dispensaries from operating too close to schools and places of worship. The abrupt regulatory change has left several operators \u2014 who had already secured leases and invested heavily in buildouts \u2014 suddenly out of compliance, sparking calls for legislative amendments to the MRTA.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Simone Washington acknowledged the strain the new guidance has created. \u201cWe require people to have locations before they can even apply for a license, and that\u2019s causing a lot of friction,\u201d she said. With downstate real estate scarce and landlords taking advantage of operators desperate for compliant spaces, Washington said the Office of Cannabis Management is exploring ways to introduce lease protections and other structural reforms to prevent further exploitation. \u201cIt\u2019s not necessarily about changing the MRTA itself,\u201d she added, \u201cbut it does mean looking at solutions from a legislative standpoint.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Attorney David Feldman called for more sweeping reforms. \u201cThe proximity rules need to be relaxed so more people can actually participate,\u201d he said, also urging limits on local zoning powers that have allowed some municipalities, particularly on Long Island, to obstruct the state\u2019s authority. Feldman argued that New York should rethink restrictions on ownership caps as well. \u201cIf someone builds one successful dispensary, why can\u2019t they have four or five? No one tells Starbucks they can only open three locations in New York City.\u201d<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Ethan Nadelman took a broader view, arguing that New York needs to learn from other states rather than repeating their mistakes. \u201cI\u2019d love to see New York take the lead in bringing together the most thoughtful stakeholders from both the industry and regulatory sides to really assess what\u2019s worked and what hasn\u2019t around the country,\u201d he said. He also warned that regulators must be proactive in addressing the growing overlap between the hemp and cannabis sectors. \u201cThis hemp thing is a massive knuckleball coming into the industry,\u201d he said. \u201cOne way or another, the two are going to merge \u2014 whether through drinks, flower, or something else. New York should be ahead of the curve instead of just reacting.\u201d<\/span><\/p>\n<div class=\"sharedaddy sd-sharing-enabled\">\n<div class=\"robots-nocontent sd-block sd-social sd-social-icon-text sd-sharing\">\n<h3 class=\"sd-title\">Share this:<\/h3>\n<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>A panel discussion at the recent Business of Cannabis event in NYC analyzed the serious issues still facing the industry rollout in New York. What has been touted as a social equity-first initiative has been riddled with significant challenges and lawsuits. To date, the Office of Cannabis Management has awarded 56% of licenses to those [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[10833,10825,9,50,10819,9283,1,3,9543,61,1736],"tags":[10834,10828,2630,10820,9288,9557],"_links":{"self":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/10908"}],"collection":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/comments?post=10908"}],"version-history":[{"count":0,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/10908\/revisions"}],"wp:attachment":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/media?parent=10908"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/categories?post=10908"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/tags?post=10908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}