New York legalized weed back in March 2021 and now, over a year later, finally, the state’s first licensed dispensary has opened in New York City—Housing Works Cannabis Company, located in lower Manhattan, opened on Thursday in an old Gap store. Instead of just buying it at their beloved bodega spot, thousands of which have been selling marijuana illegally, New Yorkers can now try weed that’s regulated—and taxed at the lofty rate of 13 percent.
New York is joining a rapidly growing list of states that have also legalized marijuana in recent years, like Missouri, Maryland, Colorado, Washington state, Vermont, and Illinois, to name a few. It’s also following a popularized approach to legalizing weed by giving people disproportionately impacted by drug laws the first shot at the market. In New York, that means in order to apply for a dispensary license, you have to either have had a cannabis conviction yourself, or have someone in your family who has, and you also must have owned a profitable business. Nonprofits are also eligible if they have a history of serving current or formerly incarcerated individuals.
The intentions here sound good, but there are complications. The state has limited eligibility to only those who had a marijuana conviction, not for those who had a case dismissed or accepted a plea deal. It’s also looking for a very specific type of licensee—someone who had a marijuana conviction and was able to run a legal, successful business afterwards, which critics say doesn’t really take into consideration the existing stigma around criminal convictions when looking for employment.
So far, the state has issued about 36 licenses. Though it’s received about 900 applications, it will only give out up to 175 licenses. But if you’re lucky enough to nab a license, the state has set you up: A $200 million social equity cannabis fund was established to support licensees, and that includes access to a storefront. The fund will pay for construction and renovations for storefronts that are selected for dispensaries in the form of a loan to be repaid by the license holder, but still: free(ish) New York City property?!
One of the biggest obstacles facing legalization in New York, like elsewhere, is the underground weed market. Despite legalization, most states still have a thriving market of illicit drugs. Consumers are faced with choosing their regular dealer, who is operating illegally and therefore not charging required taxes and fees, or buying from a legal dispensary that will likely cost significantly more.
Take California, which has had a booming cannabis industry for over five years. Even there, the vast majority of weed sales are still coming from the underground drug market. On the other hand, in Illinois, sales are also split: Despite illicit marijuana sales still raking in around $2 billion after the state legalized it in 2020, lawful weed sales statewide are valued at over $4 billion. It’s not yet clear how the weed market will play out in New York, but one thing is certain: There is profit to be made—weed sales are estimated to generate $350 million in tax revenue for the state, while also creating up to 60,000 new jobs.