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New York grants first retail cannabis licenses, aimed at promoting equity

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New York is granting its first 36 licenses to sell cannabis in the state. The program is the first of its kind in the nation to award the licenses to people who were harmed by the decades-long prohibition on the drug.

Nearly two years after the governor and legislature approved a law to allow the sale and use of marijuana for New Yorkers 21 and older, the first licenses to sell cannabis were granted by the state’s Office of Cannabis Management.

The first round of licenses are aimed at promoting social and economic equity, and go to applicants that have been convicted of a marijuana offense when the drug was outlawed, and live in a community that was disproportionately impacted by the prohibition, says OCM Executive Director Chris Alexander.

“Equity is the cornerstone of New York’s cannabis industry,” Alexander said. “And we will only accept applications that demonstrate this commitment.”

The applicants must also have run a profitable business for at least two years, and own assets like a vehicle or property, and have a bank account.

The licensees were chosen from over 900 applicants, and include 28 business and 8 nonprofits, who qualified because they have a history of serving incarcerated or formerly incarcerated people. Among the non-profits are Housing Works, begun in 1990 to fight AIDS and homelessness, and LIFE Camp, a Queens organization that helps reduce violent crimes and arrests. Founder Erica Ford is the first African American woman head of a nonprofit to be awarded a cannabis retail license in New York.

Board member Jen Metzger says no other state has done as much to try to right the wrongs of the prohibition era.

“This is a momentous day,” Metzger said. “It shouldn’t be lost on anyone that this is the first of its kind anywhere.”

Some of the shops could be open as early as the end of this year. OCM hopes to grant as many as 175 retail licenses under the program.

A federal lawsuit has stalled the awarding of some of the first round of licenses, though. A Michigan based company sued, saying New York should not restrict the awards to applicants who were convicted of a marijuana related offense in New York State. They argue that the requirement violates the interstate commerce clause, because people with marijuana convictions in other states are not included.

As a result, OCM for now is not awarding any licenses in several regions of the state, including Western New York, Central New York, the Finger Lakes Region, and the mid-Hudson Valley, as well as in Brooklyn, until the lawsuit is settled.

Board members, in response to a question from an audience member, said they could not comment on the legal actions.

The OCM board also approved proposed regulations for the adult use of the drug, with the aim of keeping cannabis out of the hands of minors, by prohibiting stores near schools or playgrounds.

The regulations also strive to keep the industry independently owned and operated, with restrictions on owning multiple stores.

The rules, modeled on the regulations for the state’s liquor industry, also separate cultivation, processing, and distribution from retail, by not allowing any one person or entity to own businesses that both produce and sell the product. Alexander says there will also be transparency in the ownership of the new enterprises, and investors will need to be clearly identified, to prevent any one group from trying to gain a monopoly on any aspect of the new industry.

“If we’re truly going to have a market that’s decentralized, that’s democratic, that’s run by small and medium sized enterprises, we need to understand who it is that’s coming in to try to dominate investments,” Alexander said.

The proposed regulations will be open for a 60 day public comment period before they are finalized.

Karen DeWitt is Capitol Bureau chief for New York State Public Radio, a network of public radio stations in New York state. She has covered state government and politics for the network since 1990.