The first NY cannabis licenses have been approved – but these are the 3 obstacles dispensaries are still facing

Housing Works opened New York state's first weed dispensary in Manhattan on Dec. 29. An expert predicts more cannabis businesses will follow suit in the coming weeks.

Michael M. Santiago

• Housing Works opened the first dispensary in New York state on Dec. 29.
• A real estate expert says license holders now face challenges with finding the right property for their businesses.
• Business owners are up against strict regulations and uneducated landlords in their search for a storefront.

The first legal dispensary in New York state opened its doors in December, but a commercial real estate expert says cannabis business owners have some hefty obstacles to overcome before they follow suit.

In March 2021, New York state legalized the recreational use of marijuana for adults, but it took nearly two years for the first 36 business licenses to be approved by the Office of Cannabis Management. The next hurdle, real estate exec Gregory Tannor of Lee & Associates NYC told Insider, is finding the right real estate for stores.

According to Tannor, opening a brick-and-mortar dispensary isn't quite the same process as a coffee shop or clothing store. There are "buffer zones" that cannabis business owners must abide by while shopping for real estate. 

"Buffer zones are crucial for approval for the OCM," Tannor told Insider. "These locations have to be outside of a certain vicinity of schools, places of worship, parks, and other dispensaries."

In order to comply with New York's buffer zones, a cannabis business cannot be within 500 feet of school or 200 feet of a house of worship, according to a report from Bloomberg. Tannor adds, the businesses must also be 1,000 feet away from another dispensary.

Hesitant landlords are another hurdle license holders will have to overcome to open a storefront. Marijuana's illegal status at the federal level coupled with the poor reputation of illicit New York smoke shops means building owners often have reservations about leasing to a legal dispensary.

"There are landlords out there who just aren't interested, but we try to educate them on what a dispensary actually is, feels, smells, tastes like, and the type of demographic it attracts," Tannor said.

However, other landlords are aware of the multibillion-dollar cannabis industry and are hoping to cash in on the opportunity by raising the rent for cannabis businesses. 

"When you find the compliant real estate, the next step is dealing with some of these landlords who start to put a cannabis tax on their property," Tannor said, adding that that's where he and his team come in "with a Rolodex of compliant real estate" to help.

Despite the uphill battle to open legal dispensaries in New York, Tannor told Insider to expect more places to purchase weed opening up in the next few weeks. He predicts the shops will open on a "rolling basis" throughout 2023.

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Contributer : Business Insider https://ift.tt/7VhZmPf

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