NYC’s Adult-Use Market Is Officially Open for Business

December 30, 2022 · Mg Magazine

NEW YORK CITY - CIRCA 2017: Busy crowds of people walk across 3rd Avenue in front of rush hour traffic in the East Village neighborhood of Manhattan in New York City.

NEW YORK – The nonprofit Housing Works Cannabis Co. opened its doors to the public in the East Village on December 29, marking the beginning of a new era for the industry in what’s expected to be the second-largest legal market after California.

New York’s new market is expected to reach $1.3 billion in sales by 2023 and create more than 20,000 jobs in the next three years. Grand View Research expects the total New York cannabis market to eclipse $7 billion by 2025.

The enthusiasm from the community was apparent on the first day of adult-use dispensary sales with a line of hundreds wrapped around the block for the public opening at 4:20 p.m., including “many giddy with excitement over the opening,” according to NPR.

Chris Alexander, executive director of the New York State Office of Cannabis Management, was the first customer, purchasing a 100mg pack of Florist Farms sour watermelon gummies. According to its online menu, the dispensary launched with edibles, flower, pre-roll, and vape products from Florist Farms, Aryloom, and Back Home Cannabis Company.

In November, the state’s Cannabis Control Board approved 36 conditional adult-use dispensary licenses. According to the NYS Office of Cannabis Management, 28 justice-involved individuals and eight nonprofit organizations were approved for adult-use sales with New York farmers to “bring countless opportunities to our communities.” But the relatively quick rollout has not been as fast as expected by Gov. Kathy Hochul (D), who told Syracuse’s The Post-Standard in October the state was on track to open 20 dispensaries by the end of 2022 with an additional 20 each subsequent month. The state received more than 900 applications and plans to issue 175 retail licenses with 25 designated for nonprofits. The state also expects to issue delivery licenses in January.

As a nonprofit, all proceeds from Housing Works Cannabis Co.’s 4,400-square-foot dispensary will fund the community services offered by its parent company, Housing Works, which has served New York City since 1990. Housing Works operates with a mission to “end the dual crises of homelessness and AIDS through relentless advocacy, the provision of lifesaving services, and entrepreneurial businesses” that sustain its efforts. Housing Works operates a dozen thrift shops and bookstores across New York as well as event spaces for weddings and private events to fund its community services.

Paula Collins, a NY attorney who represents cannabis operators and investors, sees a potential conflict with a 501(c)(3) selling a Schedule I drug. “At issue is the way the [Internal Revenue Service] views cannabis,” she wrote in a guest column published on “As we all know, cannabis is federally illegal. Therefore, an organization that participates in the cannabis market, even for education and advocacy purposes, cannot obtain or maintain its status as a 501(c)(3) organization.” If the IRS revoked the nonprofit status of organizations like Housing Works, they would incur taxes on all their revenues, and their donors also would lose tax deductions for their contributions. For Housing Works, with annual revenues of more than $148 million, the financial repercussions would be significant.

The Doe Store, which operates under the nonprofit parent Doe Fund, is expected to open the city’s second legal adult-use dispensary a few blocks away on Broadway in January. Established in 1985, the Doe Fund provides “economic opportunity, housing, career training, and supportive services to homeless and formerly incarcerated men.” In 2021, the Doe Fund reported nearly $68 million in revenues. (Full Story)

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