Are you looking for the complete guide to opening a dispensary in New York? Your friends at BLAZE have you covered with everything you need to know. From legal, to business, to marketing, we break down everything so you’ll be ready to get started.
In March 2021, New York achieved a huge milestone by being the latest state to legalize recreational cannabis. This monumental shift in public cannabis policy was a long time coming, as medical cannabis had been legal since 2014. Experts are predicting that New York cannabis sales can topple 2.2 billion by 2023. As one of the most populated states in the country, opportunities for eager cannabis retailers have never been sweeter.
Since the legalization of cannabis in New York is pretty recent, there are still some foundational tasks the state needs to complete. In fact, as of August 2021, the New York Office of Cannabis Management has yet to nominate a leader of the organization. No worries, though. As developments in New York’s cannabis market unfold, we will update this article with even more useful information to help you open a dispensary in New York.
Obtaining a license to operate, finding a location, and investing in a powerful dispensary POS system are just a few first steps to open a dispensary in New York. Luckily, BLAZE has you covered. In this article, we will go over:
Application and License Fees in New York
Day-to-day Business Operations
Marketing and Promotion
Banking
Each city operates differently and there exist different regulations on how to operate. If you’re wondering where to start, this is the perfect place. Read on to learn how to open a dispensary in New York in 2021.
Dispensary Licensing
Currently, there is no data for upcoming license and application fees. This section uses data from New York’s medical cannabis market. However, there is data on the types of licenses the New York Office of Cannabis Management could grant to applicants. Assuming the figures will be similar to medical, the pricing will be similar as well. In New York, medical licenses costs between $5,000 – $10,000. Here’s a full breakdown of the license types you can expect:
Adult Use Cultivator: “Cultivation” means the growing, cloning, harvesting, drying, curing, grading, and trimming of cannabis plants. A cultivator’s license authorizes the acquisition, possession, distribution, cultivation, and sale of cannabis from the licensed premises of the adult-use cultivator to a licensed processor.
Adult-use Nursery – “Nursery” means a licensee that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis by licensed adult-use cannabis cultivators, microbusinesses, cooperatives, and registered organizations. A nursery license authorizes the production, sale, and distribution of clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis by licensed adult-use cultivators, cooperatives, microbusinesses, or registered organizations.
Adult-use Processor – “Processor” means a licensee that extracts concentrated cannabis and/or compounds, blends, extracts, infuses or otherwise manufactures concentrated cannabis or cannabis products. A processor’s license authorizes the acquisition, possession, processing, and sale of cannabis from the licensed premises of adult-use cultivators to licensed distributors.
Adult-use Distributor – “Distributor” means any person who sells at wholesale any cannabis product for which a license is required. A distributor’s license authorizes the acquisition, possession, distribution, and sale of cannabis from the licensed premises of a licensed adult-use processor, adult-use cooperative, microbusiness, or registered organization authorized to sell adult-use cannabis, to duly licensed retail dispensaries, on-site consumption sites, and adult-use delivery licensees.
Adult-use Cooperative – A cooperative license authorizes the acquisition, possession, cultivation, processing, and sale from the licensed premises of the adult-use cooperative by such licensee to duly licensed distributors, on-site consumption sites, registered organization, and/or retail dispensaries; but not directly to cannabis consumers. A cooperative license must be organized under cooperative principles, including but not limited to being democratically controlled by the members themselves, on the basis of one vote per member.
Adult-use Microbusiness – “Microbusiness” means a licensee that may act as a cannabis producer for the cultivation of cannabis, a cannabis processor, a cannabis distributor, and a cannabis retailer. A microbusiness license authorizes the limited cultivation, processing, distribution, delivery, and sale of their own adult-use cannabis and cannabis products.
Adult-use Retail Dispensary – “Retailer” means any person who sells at retail any cannabis product, to cannabis consumers. A retail dispensary license authorizes the acquisition, possession, sale, and delivery of cannabis from the licensed premises of the retail dispensary by such licensee to cannabis consumers.
Adult-use On-site Consumption – “On-site consumption” means the consumption of cannabis in an area licensed by the Cannabis Control Board. An on-site consumption license authorizes the acquisition, possession, and sale of cannabis from the licensed premises of the on-site consumption licensee to cannabis consumers for use at the on-site consumption location.
Adult-use Delivery – A delivery license authorizes the delivery of cannabis and cannabis products by licensees, independent of another adult-use cannabis license, to cannabis consumers. Delivery licenses may not have a total of more than twenty-five individuals, or the equivalent thereof, providing full-time paid delivery services to cannabis consumers per week under one license.
Registered Organization Adult-use Cultivator Processor Distributor Retail Dispensary – A registered organization cultivator processor distributor retail dispensary license authorizes a registered organization to have the same privileges and conditions as adult-use cultivator, processor, distributor, and retail dispensary licensees. The location of registered organization adult-use retail dispensaries will be limited to three of the organization’s medical dispensaries’ and only authorizes the distribution of the registered organization’s own products. The timing and manner of a registered organization’s participation in the adult-use market will be determined by the Cannabis Control Board.
Registered Organization Adult-use Cultivator Processor Distributor – A registered organization cultivator processor distributor license authorizes a registered organization to have the same privileges of adult-use cultivator, processor, and distributor licensees. The timing and manner of a registered organization’s participation in the adult-use market will be determined by the Cannabis Control Board.
Location
It’s no secret that New York real estate has always been a hot commodity. Finding a location for your dispensary in The Big Apple won’t be hard, but the rent and taxes might overwhelming. According to a report by Bridgeworks, commercial real estate in the five boroughs can cost an average of $30 – $70 per square foot.
Out of the five boroughs, Manhattan is the hottest, at an average of almost $90 per square foot. Queens could be your best bet if you’re looking to save, at around $40 per square foot. For those looking to thrive outside of New York City, be prepared. Last year, commercial real estate vacancy in Buffalo dropped about 25% since 2018. Other cities in New York, such as Columbia, Chemung, Nassau, Putnam, Suffolk, Cattaraugus, and Oneida are not expected to adopt legalization ordinances within their city limits.
As more information becomes available in the future, things can change quickly. Now is the perfect time for you to start securing real estate capital to open a dispensary in New York.
Dispensary Business Operations
The cost of doing business is omnipresent in the cannabis industry, especially when opening a dispensary in New York. Day to day costs such as wages, and a reliable dispensary POS system are considerable investments. Let’s break down the ongoing cost to operate a dispensary.
Dispensary Wages
Having a fully-trained and well-paid staff is invaluable for dispensaries to operate smoothly. Depending on your size and market need, you need to estimate how many budtenders and staff you should hire. According to data from Glassdoor.com, the average yearly salary of a budtender in New York is $62,917. The reported salaries range from $31,820 – $124,405. While these figures are on the high end in comparison with other states,
Dispensary POS Software
Unique obstacles and opportunities in the cannabis industry require a point of sales (POS) system tailored for a dispensary. These cannabis POS systems should help manage your inventory, transactions, and compliance with your state. Since New York has one of the most comprehensive cannabis regulation laws in the country, a solid dispensary POS is an asset for new dispensaries.
Systems such as BLAZE offer a full suite of dispensary services. Features such as seed-to-sale software and cannabis distribution software add more value to your dispensary. Based in Los Angeles, BLAZE is a valuable software that understands the ins and outs of opening a dispensary in New York. With constantly updated software with real-time data, BLAZE lets retailers worry less about compliance and regulations and more about sales.
Depending on your dispensary needs, cannabis software can range from $300 – $600 a month, plus additional fees for hardware such as iPads, iPhones, and POS equipment.
Product
Much like real estate and wages, New York’s retail cannabis might see higher market prices. A new market means high demand that can have consumers paying higher-than-usual prices for cannabis. Dispensaries can expect to dish out more money for wholesale cannabis as well. According to Cannabis Benchmarks, the average cost of wholesale cannabis is about $1,600 per pound. These figures used data from established markets such as Colorado and Washington, so don’t be surprised if New York’s wholesale flower surpasses the $2,000 mark upfront.
This would be a great time to consider being a vertically integrated cannabis retailer. This means you grow, cultivate, and sell your own product. In the long run, it can be a more profitable alternative to outsourcing for cannabis.
Dispensary Marketing and Promotion in New York
Although cannabis marketing can be just as effective as in any other industry, there are still some challenges to keep in mind when opening a dispensary in New York. Platforms such as Google and Facebook don’t allow for cannabis advertising. And in states where recreational cannabis is legal, there are strict regulations on how dispensaries can promote themselves. However, this is hardly an obstacle and should push you to try more creative channels to market your brand.
In New York, licensees must abide by the following advertising restrictions:
Depicts cannabis consumption
Promotes overconsumption
Appeals to the youth or anyone under the age of 21
Advertisements must be 500 feet away from a public school or daycare
Currently, the New York Office of Cannabis Management is drafting additional provisions to regulate cannabis advertising in the State. Check back for more updates or view the full list of regulations below.
To determine an accurate marketing budget, calculate your gross revenue and deduce 3-5% of your yearly gross revenue. This number is what you should spend on marketing your dispensary or cannabis business.
For a full list of New York cannabis marketing regulations, click here.
Cannabis Banking in New York
Before you open a dispensary in New York, you must secure safe and legal banking. Because it’s not yet legal on the federal level, many banks tend to shy away from doing business with a dispensary. This is why some dispensaries are cash only or do business with local credit unions.
For New Yorkers hoping to cash in on the newly legal industry, there are still options. New York cannabis retailers will have to rely on state-based financial services. Financial crime expert Gabe Hidalgo told Reuters that he does expect New York to pass progressive banking legislation for New York banks. He also expects the State’s legal cannabis market to be fully operational by late-2022.
Recent Developments
With Gov. Andrew Cuomo’s recent resignation on Aug. 10th of 2021 due to a tidal wave of sexual-harassment accusations, the speed in which regulations will be drafted and the time frame for licensing businesses in New York is now in flux.
Although Cuomo was making progress (albeit slow) instituting the necessary procedures to get legalization off the ground and appointing officials, it’s not clear how his replacement Gov. Kathy Hochul will respond. With rising numbers of Delta variant cases and increased crime, Hochul has bigger issues to deal with. All of this will likely culminate in increased gridlock in marijuana reform roll-out. It’s hard to say how long delays will last, but 2022 would be a fair estimate.
Conclusion
Opening up a dispensary is tedious, but worth it. The cannabis industry is growing rapidly and cannabis use is on the rise in every adult demographic. That’s why now is the perfect time to open your dispensary in New York.
Dispensaries that use BLAZE cannabis POS software are already at a major advantage. Our seed-to-sale software enables vertical integration that can elevate your dispensary to new heights. BLAZE Distro software takes the worry out of inventory management and reporting. And powerful integrations make sure you’re covered on all fronts – from cultivation to compliance, and even delivery. Book a demo with BLAZE today if you’d like to open a dispensary in the simplest way possible.
