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Simon Malinowski
As we famous in our summary of the big Cannabis Control Board assembly on Could 11, 2023, one important revision to the New York adult-use guidelines and rules was the creation of the “provisional license.” This mechanism permits applicant to be provisionally licensed with out having secured actual property previous to submitting an utility. Provisional licensing is a serious improvement provided that the unique language of the Marijuana Regulation and Taxation Act (MRTA) and the first set of the adult-use rules and regulations each required candidates to safe actual property previous to making use of.
First issues first: it’s troublesome to overstate the magnitude of this transformation. As we famous in an early post, post-MRTA, location is likely one of the most necessary concerns for candidates:
“For these on the manufacturing aspect (cultivators, processors, and distributors), discovering appropriate actual property on the proper value is crucial to having the ability to function a profitable enterprise. For retail candidates (together with on-site consumption candidates), figuring out and securing the appropriate house in the appropriate space often is the distinction between monetary success and failure. As we prefer to say in New York: location, location, location.”
Permitting for provisional licensure earlier than securing actual property removes a big pre-licensure monetary obligations for candidates provided that landlords have required lease to start earlier than licensure (i.e. operations, i.e. income), for apparent monetary causes.
With that mentioned, the flexibility to use with out actual property secured, notably for retail dispensary candidates, is a sensible quagmire that each one candidates must be cautious of. Why? Due to the 1,000/2,000 foot radius guidelines for proximity with respect to every other retail dispensary.
The revised adult-use guidelines and rules enable making use of for a provisional license, however nonetheless allow any applicant to safe actual property upfront, whereby licensure wouldn’t be “provisional.” Thus, if two candidates apply for a retail dispensary license, one with actual property and one with out, the provisional licensee will likely be blocked from securing actual property inside 1,000 (or 2,000 toes, as relevant) of the non-provisional licensee.
CAURD licensees are already running into issues the place restrictive zoning legal guidelines handed by municipalities are making it extremely troublesome to seek out compliant actual property. In New York Metropolis, 1,000 toes interprets to about 4 blocks (streets, not avenues!). After accounting for faculties and homes of worship, the pool of obtainable retail areas begins to shrink actually shortly (particularly after CAURD licensees get settled in).
Lengthy story quick, provisional licenses is probably not the panacea they look like. For anybody contemplating making use of for an adult-use license (notably an actual property dispensary license), we advocate giving severe consideration to securing actual property previous to making use of. In spite of everything, what good is a retail dispensary license when you may’t discover a location through which to function?
Keep tuned for extra on New York’s revised adult-use guidelines and rules!
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