What’s Going on with New York Cannabis in 2024?

New York cannabis regulators at the state Office of Cannabis Management (OCM) and its Cannabis Control Board are facing each other in a line of lawsuits designed to restrict the further issuing of recreational licenses. 

Variscite New York Four and Variscite New York Five are arguing that the state’s retail licensing program violates the U.S. Constitution’s dormant commerce clause. This clause generally prohibits states from passing legislation that discriminates against or exceptionally burdens out-of-state citizens in comparison to in-state citizens. 

Per Green Market Report, the suit claims state residency requirements are unconstitutional and the two plaintiffs’ applications should have received “extra priority” because they had secured properties for their businesses. “Because Plaintiffs satisfy every requirement for the ‘extra priority’ pool except the unconstitutional New York residency preferences, Defendants should process Plaintiffs’ applications in the extra priority pool,” according to the lawsuit.

New reports following New York legalization

Despite this latest round of legal battles, the OCM recently released an encouraging annual report along with a pair of separate documents focusing on equity in the industry and enforcement against unlicensed operators. This report follows information about New York’s first year of legal sales, including purchases of more than 3.5 million cannabis products and total sales expected to exceed $150 million. 

After New York’s legalization in 2022, the market was slow to kick off due to lawsuits and a court injunction that halted the processing of hundreds of new retailer licenses. “New York is building a licensed cannabis market unlike anything we have ever seen before,” OCM Executive Director Chris Alexander wrote in a statement at the report’s beginning. “Although we have encountered adversity, we have known all along that the Marihuana Regulation and Taxation Act created a legal cannabis industry that disrupts the status quo for the better. While not all licenses we have issued are operationalized yet, we have issued over 700 licenses to largely social and economic equity entrepreneurs,” he added. “At the start of the year, there were approximately 20 Black-owned dispensaries across the entire country. New York just opened 12 more.”

Indigenous participation in New York marijuana legalization

The Oneida Indian Nation also has representation in the New York marijuana legalization realm. The Verona Collective is offering its own brands of cannabis flower and pre-rolls now for the soft opening, while vape cartridges and edibles will be introduced later. 

“We are very excited about the high-quality cannabis our team is producing, and this soft opening provides an opportunity for guests to experience our products as we continue to develop additional offerings,” Ryan Riggs, vice president for retail of Oneida-owned Turning Stone Enterprises, said in a statement. The nation also has a cultivation and processing facility.

Drug test New York and other legal changes

In an effort to reduce costs and improve the competitiveness of the overall legal New York cannabis market, Governor Kathy Hochul is pushing for the elimination of a THC potency tax as part of the 2025 executive budget. The proposal would repeal the potency tax, replacing it with a wholesale excise tax of nine percent, which “simplifies, streamlines and reduces the tax collection obligations and burden for cultivators, processors, and distributors.” Although cannabis would also still be subject to the existing nine percent state retail excise tax and four percent local retail excise tax, these changes would lower the total tax rate from the 38 percent average to 22 percent. The briefing book for the budget says the tax changes would “promote and support the expansion of the legal adult-use cannabis market” and also result in a “net positive impact” for localities.

Companies that drug test New York side should note the new-in-November state addiction services and treatment programs advising against routine screening for cannabis use. “With the legalization of adult-use cannabis in NYS, testing for the metabolite of THC routinely is not recommended unless the patient has identified a reduction in or cessation of cannabis as part of their treatment goals,” says a guidance document from the New York State (NYS) Office of Addiction Services and Supports (OASAS). “Alcohol and THC metabolites should not be included in routine toxicology panels,” it adds, “unless a clinician determines that alcohol or cannabis is a concern and toxicology testing would be appropriate clinically.”

Peter Grinspoon, a cannabis specialist at Massachusetts General Hospital and a Harvard Medical School instructor who’s written about the messy interaction between politics and cannabis science in the book “Seeing Through the Smoke,” framed the OASAS guidance as a matter of reducing harm. He welcomed the OASAS guidance as a sign officials are more informed of the nuances of drug test New York. “As a clinician, there are some circumstances where it’s helpful,” he said. “We just have to be very, very cognizant of the consequences of any screening, especially when it’s something as politicized as cannabis, or we’re going to end up harming more people than we help.”

Get the Latest in New York Cannabis at CannaCon

Are you looking to connect with cannabis enthusiasts and entrepreneurs in the Northeast? Then don’t miss CannaCon Northeast on June 20-21, 2024. CannaCon is the nation’s largest B2B cannabis expo, so no matter what goals you have, we’re sure you’ll be able to achieve them at CannaCon. Don’t miss it — get your tickets now. 

This article was originally published on May 11, 2023, and was updated on February 2, 2024.