People with pot convictions to get first crack at dispensary licenses

New York plans to give business owners convicted of marijuana-related offenses the first chance at retail licenses for recreational cannabis, officials announced Thursday.

State regulators released plans for a "conditional" license exclusively available to entrepreneurs who have or are related to someone with a marijuana-related conviction. The license will also be available to nonprofits that offer vocational training in communities with historically high rates of pot-related arrests.

The conditional license will ensure people who bore the brunt of marijuana prohibition have a chance to get established before other retailers open, Gov. Kathy Hochul said. Black and Latino Long Islanders have been arrested for marijuana-related offenses at higher rates than white residents, despite national research showing similar cannabis consumption rates across race and ethnicity.

"New York State is making history, launching a first-of-its-kind approach to the cannabis industry that takes a major step forward in righting the wrongs of the past," Hochul said in a statement.

To qualify for the license, applicants will need to show that they’ve owned a business that turned a profit for at least two years or are an eligible nonprofit. New Yorkers with other types of crimes on their record may be excluded from getting licenses, said Christopher Alexander, executive director of the Office of Cannabis Management, the state agency that regulates medical marijuana, recreational cannabis and hemp or CBD products that don’t produce a high.

Jessica Naissant, 28, of Valley Stream, praised the plan, but said the state should be mindful of people who don’t have convictions, but were harmed by the criminalization of marijuana. Naissant said she was arrested in college because officers believed her car smelled of smoke, but she was not convicted of a crime.

"My case was thrown out, but I had to take off a semester of college so that I could pay for a lawyer," said Naissant, who thinks she will still be eligible because she has relatives with marijuana records. "It’s more than just convictions. It’s over-policing. It’s discrimination."

The state will accept public comments on the proposal for 60 days. The rules will then be put before the Cannabis Control Board, a five-member body appointed by the governor and state lawmakers that is charged with approving the regulatory framework for pot and CBD.

If approved, the state anticipates 100 to 200 enterprises qualifying for the conditional licenses. Retailers should have the ability to start selling cannabis by the end of the year and continue for up to four years, regulators said. Their supply will come from farmers who have been growing hemp for CBD products and will soon be eligible for a conditional cannabis cultivation license.

Regulators aim to release proposed regulations for cultivation, processing, wholesaling and other retail licenses in May, Alexander said.

"We acknowledge the need to move quickly, but also the need to do it right," Alexander said.

People seeking the conditional license would pay a $2,000 fee.

Many communities on Long Island have chosen not to allow cannabis retail and consumption sites. Prioritizing people with convictions didn’t sit well with some Long Islanders.

"It’s legal marijuana, but they got caught for illegal marijuana, so they should not be benefiting," said Janine Buttler of North Bellemore.

Under the 2020 law legalizing recreational marijuana, a number of demographic groups will be given a priority for these licenses: people with cannabis-related convictions, residents of communities with historically high marijuana arrest rates, minority and women-owned businesses, veterans disabled during service and distressed farmers. Regulators aim to issue all licenses to these so-called social equity applicants.

The state is also considering launching a $200 million fund to support their retail operations. Regulators said there will be additional investments in social equity applicants across the industry, which Naissant described as critical.

"I’m sure New York made way more than that off of convictions of New Yorkers that have been sent to prison," said Naissant said, who owns a CBD business in Elmont and started a networking group for people of color interested in the cannabis industry.

The state law generally forces recreational cannabis firms to focus on one segment of the industry, with the goal of preventing large, well-financed companies from dominating the sector. But medical marijuana firms will be allowed to vertically integrate and handle everything from planting seeds to serving retail customers.

With Steve Langford

By Sarina Trangle

sarina.trangle@newsday.com@SarinaTrangle

Sarina Trangle covers affordability and cost of living issues and other business topics. She previously worked as an editor and reporter at amNewYork.