New York Gives Eight Medical Marijuana Companies the Green Light To Go Recreational

More than half a dozen New York medical cannabis companies can now sell recreational marijuana in the state.

Six were granted a "registered organization dispensing" (ROD) license in December, with two more approved during a special meeting of the Cannabis Control Board earlier this month, including the Chicago-based Green Thumb Industries (GTI).

Green Thumb entered New York’s cannabis market when they acquired Fiorello Pharmaceuticals in 2019. Today, the Chicago-based company operates four medical dispensaries under Fiorello’s medical license and 91 recreational operations across 15 states.

Dominic O’Brien is Senior Vice President of Revenue for GTI, whose Henrietta location, RISE, south of Rochester, is the only one of the company's New York dispensaries to have opened to recreational customers.

“We've been serving our medical patients, going on five years now. That continues, and always will be a priority for us.” O’Brien said. “That's how GTI got started, not just in New York but in most of our markets. Most markets are medical markets first, before they become adult-use markets.”

Now, O'Brien is excited and optimistic about being able to bring even more products to RISE, like "our Dog Walkers, Incredibles, Beboe, all these wonderful products that we sell across 14 different states."

Registered organizations – another name for medical marijuana providers –have been a part of New York’s weed industry since the state’s Medical Marijuana Program started in 2016.

Medical companies are vertically integrated, which means a license holder can grow, process and sell their own produce under one license. Some independent growers have expressed fears that the presence of medical companies might crowd them out of the state’s developing recreational market.

John Kagia, the Director of Policy for the Office of Cannabis Management (OCM), says their inclusion is part of a broader push to expand New York’s retail capacity as quickly as possible.

Access to licensed retail dispensaries is something the state has historically struggled with. In August, a court injunction tossed many early applications to New York’s Conditional Adult-Use Retail Dispensary (CAURD) program into limbo, preventing the OCM from issuing any additional licenses until it was lifted four months later.

Between the recently restarted CAURD program and general adult-use business applications, Kagia says the state now expects to issue over 1000 licenses to cultivators, manufacturers, distributors and retailers in the coming months.

“The key, I think, was to design a market structure that enabled the registered organizations to have a seat at the table, but that not to be at the exclusion of all of the other entrepreneurs and businesspeople who see great opportunity in New York’s market,” Kagia said.

But he also points out that "mixed" retailers — who sell medical and recreational cannabis — can’t sell just their own product.

"These medical organizations are required by regulation to carry at least half of the product from other suppliers in the market," said Kagia.  

Furthermore, New York does require allmedical and recreational cannabis sold by licensed retailers to be grown in the state. And recreational storefronts serving both types of customers will initially be required to dedicate at least half of their adult-use shelf space to products they haven't made themselves.

Additionally, medical companies entering the growing adult-use market will only be allowed to transition one of their storefronts over to mixed medical-recreational sales until later this year.

Kagia hopes these policies will offer significant expansion opportunities to brands that exist on the adult-use side of the market as medical operators enter the field.

This story was originally published on 1/25/2024 on WAER.