New York’s plan to double the number of recreational marijuana retail licenses to 300 for social equity applicants was met with enthusiasm from local cannabis operators and industry advocates. However, there are mounting concerns over the challenge of finding affordable cannabis real estate across the state due to zoning and commercial restrictions. Roughly half of New York’s 1,520 municipalities have opted out of adult-use retail, with densely populated Long Island being a prime example. The opt-out issue is a significant concern for Conditional Adult-Use Retail Dispensary (CAURD) social equity applicants and other license hopefuls, as there are limited locations to find, and it creates an even more challenging issue for the next round of licensees.
In Nassau County, only five of 69 municipalities have opted in, and in Suffolk County, 11 of 42 municipalities have opted in for recreational sales and consumption, with five having “no or limited” commercial properties available.
Retail opt-outs are one of the reasons why only five licensed dispensaries in New York are operational nearly three months after the state’s Dec. 29 launch of recreational sales, with three of them located in Manhattan. The distance barriers between marijuana stores and other property types, including schools and places of worship, are also causing significant challenges for retail operators around New York City and particularly in Long Island, which has now been allotted 40 stores.
Municipal opt-outs are all too common in the cannabis industry, and other markets, most notably Rhode Island, have taken a different approach, leaving opt-outs and opt-ins to the will of the voters. When the nation’s smallest state by landmass kicked off adult-use sales, 33 of the state’s 39 municipalities had opted in, or nearly 85%, believed to be the highest percentage of any market launch.
As in other states, New York regulators have proposed distance barriers between marijuana stores and other property types, including schools and places of worship. However, some location restrictions are causing big challenges for retail operators around New York City and particularly in Long Island, which has now been allotted 40 stores.
Overall, the opt-out issue and zoning restrictions create significant barriers to entry for those wanting to start a cannabis business in New York, particularly in Long Island, and finding suitable retail locations is a significant challenge. The current situation highlights the need for policymakers to consider alternative approaches to opt-outs, such as voter referendums or leaving the decision to the will of the voters, to ensure equitable access to the state’s potential billion-dollar marijuana market.
If you would like to learn more about cannabis taxes or what The Canna CPAs can do to help you become more successful through decreased taxes, increased profits, and increased cash flow, call now at 833-CPA-CANA -or- 833-272-2262.
Sandy Suchoff, CPA is the Founder and principal of Lefstein-Suchoff, CPA & Associates, LLC D/B/A The Canna CPAs. Suchoff has been featured and interviewed on MSNBC, FOX News, and Tune In Business Talk Radio as a tax advisor, as well as ONR Oklahoma PBS TV, Chasing News on FOX & WOR, KRQE 13, Cannabis Radio, Purple Haze Radio, and Cannabis Tech & Today as an advisor on cannabis tax and accounting.
