Matthew Schwartz
As many acquainted with the present standing and points dealing with New York State hashish and particularly the conditional grownup use retail dispensary (“CAURD”) licenses know, there are a large number of issues that CAURD Licensees are dealing with and a few of them are fed up. To that extent, on Could 9, 2023, a minimum of eight (8) CAURD Licensees despatched an open letter to the Dormitory Authority of the State of New York (“DASNY”), the Workplace of Hashish Administration (“OCM”) and the Hashish Management Board (“CCB”) voicing their considerations within the hopes of getting a gathering with these authorities to iron out some points which have arisen because the awarding of their respective CAURD licenses.
Points confronted by CAURD licensees
Beneath is a non-exhaustive abstract of a few of the points raised in the letter at difficulty. This abstract is consultant of a few of the challenges the CAURD licensees are dealing with.
One of many largest challenges for CAURD Licensees is discovering and constructing out their retail area. DASNY can reject proposed places primarily based on info solely they’ve entry to, with none unbiased oversight. DASNY whereas being tasked with securing places for the CAURD licensees can be the identical governmental company approving places for licensees opting to not take part in its location project initiative. Such a system supplies DASNY with an efficient monopoly over the place the Licensees can hire area or function. Although the OCM has allowed licensees to safe their very own location, licensees nonetheless should compete with DASNY, which has extra leverage and energy in the true property market.
Furthermore, DASNY has been painfully gradual to reply, if in any respect, to web site plan approvals or present any perception into the method or monetary phrases for the leased areas. Upon acceptance of a dispensary location, Licensees are then pressured to make use of contractors recognized by DASNY and are supplied with no perception into the scope of buildouts, nor the small print of budgeting for the buildout prices they are going to be accountable for paying over the time period of the lease. It’s stated that these contractors are quoting nicely above market costs and the Licensees haven’t any capability to barter these prices.
The one actual property choices made obtainable by the Fund appear to have extraordinarily excessive rents, the place success will not be potential given the gradual early adoption of authorized retail outlets in opposition to the numerous illicit alternate options
Extremely, the governmental entities are asking CAURD licensees to comply with leases referencing financing agreements with out ever being supplied with these financing agreements. It is not uncommon sense that no diligent and accountable enterprise proprietor could be anticipated to signal a contract beneath these situations.
What’s subsequent for CAURD?
We sincerely hope DASNY, OCM and CCB take the considerations recognized within the Could 9 letter significantly. We’ve been following many of those points on the blog for some time now, and we’ve got been coping with them on behalf of purchasers from right here in our New York workplace.
For extra normal info on New York hashish program timelines, together with guidelines and licensing, see our abstract of CCB’s assembly final week here.
