A U.S. federal appeals court has lifted a ban that was preventing cannabis dispensaries from receiving licences from cannabis regulators in New York state.
The ban was a major block in New York for the rollout of recreational cannabis. The decision to lift the ban has allowed for 108 dispensary licences for several regions, including Central New York, Western New York, Mid-Hudson and Brooklyn.
Although the licences can now be granted, it can take months for the stores to open. Since November 56 licences have been granted, but this has only resulted in five dispensaries being opened.
The injunction was bought to the courts by cannabis company Variscite NY One, whose owner lives in Michigan, Kenneth Gray. Applicants for the dispensary licence are required to have links to New York such as bank accounts, primary residence or a state level conviction for cannabis related offence.
Gray argues that these criteria violate the U.S. Constitution and the requirement to not discriminate against interstate commerce.
When cannabis was legalised, New York put social restoration at the centre of its approach. The first licences were issued to those who suffered from the prohibition of cannabis, including those formerly imprisoned.
Despite the legalisation of cannabis in New York, the illegal market remains extremely popular for numerous reasons.
Officials have estimated that there are 1,400 unlicensed cannabis dispensaries in the five boroughs of New York City.
Their popularity grew during Covid-19 as many of the licensed stores closed. They can also offer much cheaper prices of around $25 for an eighth of cannabis compared to the licensed stores of New York charging approximately $80.
One way to solve this issue is for the regulators to allow these underground businesses to become legal, but this can take time.
In Massachusetts, it is estimated that in the first year 90% of cannabis users were still using the black market. Five years into legalisation, this is now estimated to be around 50%.
