New York’s Cannabis Control Board awarded three new Registered Organization (RO) licenses on Oct. 10, expanding the Empire State’s medical market after more than three years of attention on the state’s contentious adult-use market roll out.
The CCB granted RO licenses to Nonna Farms LLC, NYRO Partners LLC and VNY-Ops Inc. All three appear to be newcomers to the cannabis business, though Nonna Farms LLC has a pre-license as an adult-use processor in New York.
These new operators will also have the opportunity to enter the adult-use market by obtaining either an RO dispensing or RO non-dispensing license. On the medical side, they enter a market that is dominated by nine multi-state operators.
New York has 105,195 registered patients and 34 dispensaries, which means each serve an average of about 2,800 patients. Comparatively, Florida has more than eight times as many registered patients, but it also has a medical dispensary for about every 1,400 patients. New Jersey has about one dispensary for every 950 patients.
“We see tremendous potential for our medical market,” said acting OCM Chief Equity Officer Tabitha Robinson during the CCB’s Oct. 10 meeting. “And this is without even adding a single medical patient to our registration.”
Robinson added, “Our intention is that these new medical operators coming on board will offer greater geographic distribution and greater access to our medical dispensaries.”
The Office of Cannabis Management began accepting applications for new ROs last fall, from Oct. 31 to Dec. 19.
“Since then we’ve been diligently reviewing applications,” said Robinson. “This represents the first time since 2015 that the application window has been open.”
There was no limit to who could apply for an RO license, but applicants were required to demonstrate cultural, linguistic and medical competence, provide affordable products to patients, and provide outreach to practitioners and researchers. They must also set environmental sustainability goals and diversity, equity and inclusion goals.
Applicants had to pay a $10,000 application fee and a $200,000 registration fee after approval. They also must either lease or secure property or submit a $2 million secured bond to OCM.
At the same meeting, the CCB approved 141 more adult-use licenses, bringing the total number awarded in 2024 to 1,132. New licenses included 27 retail, 15 cultivation, 16 distribution, 71 processors and 12 microbusinesses.
Prioritizing underserved communities
The Marihuana Regulation and Taxation Act, the law that legalized adult-use cannabis, increased the maximum number of dispensaries ROs could operate from four to eight. The only stipulation was that the fifth and sixth dispensaries must be located in a medically unserved or underserved area, as determined by the CCB.
That determination includes seven variables, as per the MRTA, including population-provider ratio, population over 65, uninsured rate, low birth weight rates, premature deaths, household disability rate and travel time to healthcare providers.
In total, there are 34 medical dispensaries, of which 10 are currently operating in a medical/adult-use hybrid model, according to a recent market report released by OCM. The state also lists five additional dispensaries as being “temporarily closed,” with no further details about their status.
“There was a real intention put into ensuring that first and foremost, the priority is going to be around serving and engaging them to serve communities,” said OCM Director of Policy John Hagia. “Their participation in the adult-use market was really a secondary consideration there.”
After the launch of the adult-use market, ROs were permitted to enter that market by applying for either a RO dispensing or RO non-dispensing license. ROs can grow adult-use cannabis or sell to non-medical customers, but not both. Six obtained ROD licenses, while three others grabbed ROND licenses.
There is a tenth RO license holder, Hudson Health Extracts, which won its license through a Dec. 20, 2022, court order. Hudson Health has yet to obtain an ROD or ROND to enter the adult-use market.
The existing ROs account for about 12% of the total adult-use sales in the state, while only representing about 5% of the total number of adult-use shops, according to Kagia.
“I just want to make sure that we’re keeping our eye on this as we are allowing more ROs into the market,” said CCB member Jennifer Gilbert Jenkins. “Over time, with more ROs being able to access the retail side, that percentage is going to expand quickly, and we need to be very careful about that.”
“The bulk of the share that they have captured on the legal adult-use market has been for flower products, which is not entirely surprising,” added Kagia. “They have a lot of capacity. They can cultivate indoors.”
