How to Open A Dispensary in New York: Operating & Marketing in NY

Posted on October 11th, 2021 to Branding

New York was the 15th state to legalize recreational cannabis, you can read the entire bill right here on the State of New York’s website. Different from other states, New York has a plan in place to allow for cannabis cafes, wherein customers will be permitted to smoke and consume cannabis on-site. Similarly, cannabis can be smoked anywhere in the state where smoking tobacco is permissible.

But how will the state roll out licenses and how can you apply?

How do I open a dispensary in New York?

The process to open a dispensary in New York State is just about as lengthy as any other state, involving applications, fees, inspections and more. We’ll cover the most important info here, but for any details we might miss, be sure to head over to the Office of Cannabis Management and read up on the FAQs, Social and Economic EquityPenal Fact Sheet, and Governance Structure Fact Sheet.

There are ten license categories available and it’s estimated that New York will be granting a high number of licensees. Just like in other states, businesses that already have licenses in place may be grandfathered in to obtaining new licenses in the same category., but only up to two times the number of licenses they now have. New York counties and municipalities have the choice to opt out of cannabis sales in their area. The withdrawal date is December 31, 2021.

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Is there a social equity component to New York’s cannabis legislation?

Yes, this law also seeks to create a framework for applicants seeking social and economic fairness, with the objective of awarding 50% of licenses to such applicants. According to the New York Times, New York, as one of the most populous states on the east coast of the United States, is predicted to generate one of the largest marketplaces, with an estimated industry size of $4.2 billion.

What is the cost of opening a medical dispensary in New York?

Applicants were required to submit the following non-refundable cannabis license fees during the 2015 application process, according to the New York Medical Marijuana Regulations and the Compassionate Care Act Bill S854A:

  • A non-refundable application fee of $10,000.
  • A registration fee of $200,000 which will be returned to applicants who are not granted registration.

How does this compare to what a recreational dispensary application might cost?

Depending on the facility size and activities, the typical investor will have a budget of about a half-million to 1 million dollars of working capital in order to successfully start a dispensary in New York. However, when seeking to operate a dispensary in New York, the Office of Cannabis Management will assess the anticipated expenses and fees. The application costs will not be decided until rules are finalized by the Office of Cannabis Management. We plan to update this post as we learn more about the state of affairs in NY.

10 types of adult-use cannabis licenses available to New Yorkers:

Each of these license types necessitates a unique set of papers, in addition to what is required by the state of New York’s Office of Cannabis Management and Adult Use License Types. Regulations will be made accessible in the near future.

1. Adult-Use Cannabis Cultivator License in NY

When applying for an Adult-Use Cultivation License in the state of New York, you may additionally have one Processing License and one Distribution License, but no more than one Cultivation License. A cannabis-growing company can also apply for a Cannabis Nursery license.

2. Adult-Use Cannabis Retail Dispensary License in NY

If you apply for an Adult-Use Dispensary License in New York, you may not apply for any additional licenses unless you are a previously medical marijuana licensed company. As a fresh candidate, however, you may apply for up to three dispensary licenses.

3. Adult-Use Cannabis Delivery License in NY

Within the state of New York, you may not have more than one delivery license. With this license, you may not employ more than 25 employees. It is permissible to apply for a Dispensary Retail license as well as a Delivery License.

4. Adult-Use Cannabis Distributor License in NY

A wholesaler with an Adult-Use Distributor license buys from cannabis growers and manufacturing facilities and sells to Dispensaries, Delivery Services, and Consumption Lounge licensees.

5. Adult-Use Cannabis Nursery License in NY

A nursery license allows licensed adult-use growers, cooperatives, microbusinesses, or registered organizations to produce, sell, and distribute clones, immature plants, seeds, and other agricultural goods for the planting, propagation, and growing of cannabis. It is permissible to apply for a Cultivation License and a Nursery License.

6. Adult-Use Cannabis Micro-Business License in NY

Micro-business operators are able to conduct small-scale cultivation, processing, distribution, delivery, and dispensing activities. They might not be interested in any other sorts of licenses. The scope of this license type will be determined by the Office of Cannabis Management.

7. Adult-Use Cannabis Laboratory License in NY

A cannabis laboratory testing permit holder may not have a license in any other category; permits are necessary to submit samples to a laboratory and preserve the results of those tests.

8. Adult-Use Cannabis Processing License in New York

If you apply for an Adult-Use processor license, you may not apply for more than one license per organization. Except for growing, you are not permitted to participate in any other activity on the property. A processor may also get a distributor license for the express purpose of distributing their own products.

9. Adult-Use Cannabis On-Site Consumption License in New York

When applying for an Adult-Use Permit, you may not be interested in other license categories if you have an on-site consumption license; nevertheless, you can obtain three consumption lounge licenses. The property to which the license is linked must be yours. The Office of Cannabis Management must assess if the proposed location is advantageous to the community. Once you have a consumption lounge ready to get up and running, you’ll want to learn more about developing a local SEO strategy for your cannabis cafe.

10. Adult-Use Marijuana Small Business Adult Use Cooperative License in New York

The acquisition, possession, production, processing, and sale of cannabis from the premises to licensed distributors, on-site consumption locations, and retail outlets will be permitted under the Small Business Cooperative License. To get this license, you and your partners must be New York residents, and the firm must be democratically managed as a limited liability corporation or partnership.

Marketing Your New York Dispensary

Once your approved and ready to start working on opening your shop, you’ll want to immediately think of your dispensary marketing plan. Once you have a name, location, and brand, a fast & professional website is an obvious next step.

New York’s medical marijuana program has been well-established for a few years. However, the Empire State has been a little slower to the adult-use cannabis party. Nevertheless, happenings so far in 2022 have finally set the stage for recreational sales to begin by the end of 2022. The Daily News reported in February 2022 that between 100 and 200 dispensary licenses are likely to be issued by autumn. Adult cannabis sales should begin soon after.

Without question, New York’s up-and-coming cannabis industry is bound to be one of the largest in the country. Some sources speculate the projected worth of NY cannabis to be between $3.7 and $5.8 billion within five years. If you’re stepping in as a retailer and opening a New York dispensary, getting your new dispensary noticed is the key to staying relevant and profitable. Below is a look at how to market a dispensary in New York.

Rules for Marketing Your Dispensary in New York

The State Cannabis Control Board (CCB) in NY created the laws for advertising and marketing medical cannabis several years ago. Those laws have been amended a few times, but are covered in-depth in section 113.17 Medical Cannabis Marketing and Advertisings. Even though adult-use cannabis is just getting started, NY state has already laid out its plans for regulations for advertising and marketing adult-use cannabis. These proposed laws are stated in Section 86 – Adult-Use Cannabis Advertising and Marketing.

For both types of dispensaries, the laws can get pretty complicated. Below is a general breakdown of what to know about NY’s dispensary marketing laws.

1. Prohibited Advertising Content

Certain types of advertising are anticipated to be explicitly not allowed with adult-use cannabis, much as they have been with medical use cannabis. Some rules include no advertising that:

  • Is misleading, false, or deceptive
  • Promotes the overconsumption of cannabis or cannabis products
  • Depicts actual cannabis consumption
  • Appeals on any level to minors or children
  • Promotes using adult-use cannabis for medical purposes
  • Promotes discounts or selling products below market value

The rules with medical cannabis state that cannabis advertisements that make statements about efficacy, consequences, contraindications, or effectiveness have to offer accurate statements. In fact, medical dispensaries are expected to submit the ad to the CCB for approval at least 60 days before the ad is posted.

Product advertisements also cannot state in any form or fashion that they have been directly endorsed by New York State of affiliated entities.

2. Prohibited Marketing Strategies

When it comes to packaging, labeling, and advertisements, marketing strategies cannot be designed to:

  • Appeal to people under the age of 21
  • Appeal to people at risk of adverse health outcomes with cannabis use
  • Spread misleading or false information to prospective customers

3. Identifiable Responsible Party

The regulations state that any form of marketing or advertising has to clearly identify who is responsible for the content being advertised. This means that any materials posted must legibly show the name of either the business or the party that created the content.

4. Prohibited Ad or Signage Placement

All advertisements on cable, in print, on the radio, or via digital communications (online) can only be broadcasted when the audience is expected to be 21 years old or older. This can be a challenge with digital marketing for cannabis dispensaries.

Dispensary marketers should rely on audience composition data to reasonably determine the age of the audience where any marketing materials are placed. In the event the age of the majority of the audience is up for question, you will be required to show proof that you made reasonable efforts to get this information prior to ad placement.

Advertising materials also cannot be readily viewable within 500 feet of a playground, child daycare facility, library, public park, or school grounds. Advertising materials are also not allowed:

  • In public transit stations or vehicles
  • As an internet pop-up ad
  • On publicly operated or owned property
  • On a billboard

Get the Help You Need for Cannabis Marketing in NY

New York’s marketing and advertising regulations are set to become some of the strictest in the country. Therefore, working through all the statutes, requirements, and regulations can be tough. CannaPlanners can help when there is just too much to take in.

From building an email marketing plan to building a customized website for your dispensary, we can bring your NY dispensary brand to life. If you need help with marketing your NY dispensary, reach out to us at CannaPlanners for help.

Related: Best Dispensary Websites of 2022 & Guide to Opening A New Dispensary.

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VP Digital Marketing, CMO

This post was written by Zach Santarsiero.

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