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It’s Hard to Be a Licensed Cannabis Store in NYC
March 17, 2024

It’s Hard to Be a Licensed Cannabis Store in NYC

Reading Time: 5 minutes

There are just 16—and they can’t promote their products in store windows or offer discounts., NYC legal weed: Why legal stores are few and far between.

There was no weed at the weed store. It was supposed to be the grand opening of a Brooklyn pop-up shop for the Travel Agency, a cannabis dispensary with a flagship store in Manhattan’s Union Square. The smaller satellite store was a strategy to build name recognition. ‘There’s going to be more and more dispensaries every day,’ Travel Agency president Arana Hankin-Biggers tells me. ‘The quicker we can get people into the store, the better it is for the brand.’

It’s a crowded market. If you’ve walked down a street in New York recently, you’ve likely seen a ton of stores selling weed. The Travel Agency’s main location has been one of just 16 stores operating with a license in New York City since cannabis became legal in the state. But getting a license can be a cumbersome process. And unfortunately, on the day it was meant to open in mid-January, the Brooklyn location was still waiting for its license—which is why there was no weed in sight, just empty display cases.

Would-be customers would have no shortage of other options. Estimates vary, but there are over 1,000, if not several thousand, unlicensed stores in the city. City government is supposedly cracking down on illegal dispensaries. In the meantime, following the ‘weed rules’ isn’t easy: The legal stores face a number of challenges that the unlicensed stores do not.

In March 2021, New York state legalized adult-use cannabis through the Marihuana Regulation and Taxation Act. In addition to legalizing the recreational use of the compound, the MRTA also created the Office of Cannabis Management to provide governmental oversight and regulation of cannabis retail. The OCM prioritized giving licenses to people with prior convictions or members of communities affected by the war on drugs.

Businesses that fit certain criteria could apply, and in November 2022 the OCM approved a small number of licenses for conditional adult-use retail dispensaries. The number of licenses, especially relative to the demand for them, remains small. According to a webinar held by the office in mid-January, the board has received applications from a little over 4,300 retail dispensaries across the state and was hoping to approve a mere 250 of them soon. Even the state’s governor is fed up with how long it’s taking.

And after all that, a license doesn’t mean that a business can just open up shop wherever. Much like bars, there are rules. Legal dispensaries can’t be too close to schools, places of worship, and other legal dispensaries. These stipulations can make finding a piece of real estate to rent all the more difficult. (Housing Works Cannabis Co. has taken over an old Gap building on Broadway to sell weed.)

When it comes to getting the store into actual operation, there are several additional things the OCM requires. ‘It’s very involved,’ Hankin-Biggers tells me. For one, all legal dispensaries must use licensed processors and growers. The products themselves have to be tested by a licensed laboratory, and each has a QR code so that customers can see test results. God forbid, if something goes wrong with a batch, there’s a way to recall it. ‘You’re not going to get that in an illicit place,’ says Sasha Nugent, the retail manager of Housing Works Cannabis Co. Some non-licensed stores do their due diligence. Jason Coello, the owner of MetroBud NYC, which does not have a state-sanctioned cannabis license, tells me he tests all products in-house and gets weed directly from growers to ensure that the product is safe. But in many cases, customers may not know where their product is coming from—and they have to take the store’s word for it that it is doing that testing.

The OCM also requires trained vendors, or ‘budtenders,’ to be stationed in the stores in order to help patrons determine the best product for their needs. Licensed stores hype up this aspect of the experience. ‘A lot of people come into our dispensary and have never been in a legal or any dispensary in their life—it’s their first experience,’ Hankin-Biggers says. ‘It’s really confusing for customers and consumers, but we do our best to educate folks.’

All of this can make for a more expensive product—not to mention, New York places a 13 percent retail tax on cannabis products. Many customers have ranted about the prices and quality: The city’s dispensaries tend to draw from statewide cultivators, so products undoubtedly pale in comparison to the oft-worshipped weed.

‘For a licensed dispensary in New York City, you better believe you are going to be paying those New York City prices,’ one customer wrote in a Google review for the Travel Agency. The stores are well aware of these complaints. Travel Agency representatives are active on the store’s Yelp page, responding to almost every review, positive or negative.

’80 dollars for something that smelled like real gasoline was poured on it,’ another wrote about Housing Works Cannabis Co. (The store’s owners responded to this complaint, noting that they ‘strive to offer diverse products with prices ranging from $10 to $60, collaborating with local farmers to ensure quality.’)

Licensed stores have limited ways to entice skeptical customers. The OCM has strict requirements for how these places can promote their cannabis. They can’t display cannabis in windows, and although customers can inspect potential products, the budtender does most of the handling. You can’t see anything from the street, really. At both Housing Works and the Travel Agency, most of the inventory is kept in a back area akin to a mailroom.

Dispensaries also can’t offer promotional rates on their products. ‘Licensees cannot advertise giveaways, discounts, price reductions, points-based reward systems, or customer loyalty programs including, but not limited to, by using the words ‘sale’, ‘free’, ‘price drop’, or ‘discount’ on a menu, in any communications to customers, or elsewhere,’ the rules read. That is, you won’t find any BOGO or ‘$20 Off Tuesday’ deals at legal dispensaries. The stores have to get creative, establishing membership programs where customers can get early access to products and events. (Becoming a member requires merely signing up via email—regulations prohibit any sort of loyalty of frequent-shopper programs.)

And when it comes to paying, credit cards are rarely an option, whether or not you’re shopping at a licensed store. Major banks and credit card companies have restricted cannabis purchases because the product is still federally illegal. Legal dispensaries in New York accept PIN debit cards, ACH transfers, and even cash—and for those who don’t carry cash, there are ATMs on the premises.

Many of the legal dispensaries, in an attempt to differentiate themselves from non-licensed stores, incorporate social justice causes into their businesses. (This is also an asset while getting a license approved.) The Travel Agency has a partnership with the Doe Fund—which provides housing, work, and educational opportunities to those with a history of homelessness, incarceration, and substance abuse. Housing Works Cannabis Co. is a subsidiary of the larger Housing Works nonprofit, which fights AIDS and homelessness in the city. Conbud, a legal dispensary on the Lower East Side, specifically hires formerly incarcerated individuals. Both Housing Works and the Travel Agency noted that they also employ people with prior cannabis convictions.

The weed PR people I spoke to were adamant that in spite of the challenges, they are succeeding with their licensed stores. At Housing Works, they say they see about 1,000 people a day and 60 percent of patrons become repeat customers—a stat that indicates that the store is building brand recognition and community. According to Hankin-Biggers, the Travel Agency has met and exceeded its sales projections. And more than a month after originally expected, the second Travel Agency has finally opened its bright doors, ushering customers in through a cloud-painted foyer and to—as it promises its customers—an elevated experience.


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