With high-maintenance cannabis retail outlets slow to open, Ney York state fast-tracks the launch of courier services.
Legal weed isn’t yet coming to a store near you — but cannabis delivery service could soon be seamless.
Little noticed when the state Office of Cannabis Management announced its first 36 retail licenses last week was the news that couriered delivery is on the menu. Delivery could speed the launch of retail sales while planned storefronts stall.
At the Nov. 21 meeting of the office’s governing board, a presentation slide indicated that the selected operators could start delivery services even before they are permitted to open storefront cannabis locations.
A spokesperson for the Office of Cannabis Management (OCM), Aaron Ghitelman, said in a statement to THE CITY: “We are allowing adult-use retail dispensary non-storefront delivery as a means of jumpstarting adult-use cannabis product sales,”
adding that operational details will be coming as soon as next week about getting “non-store front delivery operations up and running.”
Delivery is revving up even as the process for matching the newly named sellers with storefronts is moving in slow motion. The state Dormitory Authority controls the selection of locations, none of which have yet been named, as well as the build-out of the retail stores using an approved list of cannabis architects.
Hundreds of millions of dollars worth of cannabis grown in the state remains warehoused, for want of sales outlets.
Dan Livingston, executive director of the trade group Cannabis Association of New York, said the delivery option is a positive development.
“There’s a certain amount of excitement because we had the sense that delivery might not make that first cut,” Livingston said. “The fact that dispensaries are going to be able to run their own cannabis delivery is exciting because we know that that’s where the market is, in New York City in particular.”
The state OCM had previously laid some groundwork for delivery. Proposed regulations say that businesses would be limited to ground transportation, with verification upon delivery that the purchaser is at least 21 years of age. They would also be limited to no more than the equivalent of 25 employees providing paid delivery services.
Because credit card companies have been loath to participate in the pot economy — with cannabis still an illegal controlled substance under federal law — transactions may have to take place through other means, such as debit cards or cash.
And while New York’s 150 licensees are assigned specific counties for their retail operations, they will be permitted to sell and deliver across boundaries — so a Bronx dispensary may deliver to Manhattan or Westchester County, and a Manhattan or Staten Island outlet can deliver to Brooklyn, a borough where a court injunction has frozen retail cannabis sales.
David Feder, an attorney who founded Weed Law and is representing a dispensary license recipient who will be based in Queens, said a robust delivery service would be crucial for licensed sellers to compete with unauthorized cannabis sellers, which have proliferated across the city. Despite the prevalence of cannabis storefronts in many areas, none have been licensed by the state yet to sell weed.
“It’s a whole universe that can be completely distinct from the retail experience that a brand has,” he said. cannabis Licensees “can be running two very significant and meaningful brand experiences that can cater to different audiences completely.”
Cannabis Delivery Tradition
The news that delivery could rev up before storefronts open caught the new license holders by surprise.
Along with her brother, father, and partner, Naiomy Guerrero is getting ready to launch Nube NYC LLC in The Bronx, one of the first licensees. Guerrero said she grew up with her family in Morris Heights during the height of stop-and-frisk policing and its disproportionate impact on Black and brown communities. Her brother, Hector, had a cannabis-related conviction, qualifying him for a first-round license.
Now the family is reaching out to cultivators, and working on their business plan. Guerrero said that while she and her family always planned for delivery to be part of their operation, she was not expecting to hear that delivery could launch before their dispensary opened.
But she’s also aware that the launch into what she calls “uncharted waters” requires flexibility by all parties involved.
“It’s an opportunity to sort of get moving faster than we would if we had to wait for these dispensaries to be built out or whatever it is that’s happening,” she said. “In the end, I’d rather be doing deliveries than not be doing anything.”
Jeffrey Hoffman, an attorney representing two license recipients, said that the OCM is looking to fend off the increasingly entrenched gray market of cannabis sellers. But Hoffman, 52, also observed that delivery has long been a foundation of NYC’s weed economy.
“The cannabis industry in New York City has existed as long as I’ve been alive — and it’s always been a delivery market. So opening a regulated market without delivery would be problematic, to say the least,” he said.
Buying Weed at an NYC Bodega? Watch Out for E. Coli, Salmonella and Lead
A study commissioned by the New York Medical Cannabis Industry Association also found branding violations.
About 40% of cannabis products purchased from 20 illicit stores in New York City were found to contain harmful contaminants such as E. coli, lead and salmonella, according to a report commissioned by the New York Medical Cannabis Industry Association.
One of the products purchased also included double the amount of advertised THC, the psychoactive ingredient in marijuana.
All of the items tested also failed the state’s proposed branding regulations, with many including images of copyrighted food brands — such as Rice Krispies treats — that could be mistakenly confused with the real product, posing a particular threat to children, according to the study released Wednesday.
While New York state is on the cusp of welcoming legal cannabis dispensaries statewide after doling out more than 30 licenses on Nov. 21, many businesses have jumped the gun by opening illegal shops that conspicuously sell marijuana. To date, products sold at illicit shops have largely flown under the radar as law enforcement struggles to close locations.
Earlier this year, the Office of Cannabis Management, the state agency that’s overseeing the market rollout, sent out dozens of cease-and-desist letters to illicit operations statewide, although it’s unclear whether those stores have since closed.
“Allowing these unregulated, illicit operations to continue operating with impunity will only exacerbate an already alarming public health trend, especially among teens and young adults who either are unaware of or choose to ignore the health risks,” according to the report.
Exploiting the Gap
The study was conducted in August, with online resources like Facebook and Google Maps guiding the initial search for stores. Of the 30 dispensaries identified, 20 were visited, with two THC products purchased at each site and then subsequently tested at an independent lab. Both E. coli and salmonella can cause serious health problems. The former can cause complications such as lung infections, whereas the latter can lead to severe fever and fatigue, the study says.