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Cannabis is legalized in New York. On April 1st, 2021, former Governor Cuomo announced he signed recreational cannabis into law, but thankfully it wasn’t an April Fool’s Day joke! New York will hopefully begin adult-use cannabis sales by the end of 2022, and the tax collections from the new program are projected to reach $350 million annually. Recreational cannabis is also expected to provide between 30,000–60,000 jobs for New Yorkers! 

As current Governor, Kathy Hochul has made incredible progress in establishing the cannabis program.  By October 2021, all five members of the Cannabis Control Board (CCB) were appointed and ready to adopt new rules to expand the state’s existing medical cannabis program and launch its first Cannabinoid (CBD) hemp program. The Office of Cannabis Management (OCM), which is overseen by the CCB, has yet to announce regulations for the adult-use industry. However, we do know that cannabis tax dollars will go towards rebuilding communities harmed by the War on Drugs. Here’s a breakdown of the 14% sales tax (4% local, 9% state, and 1% county):

  • 40% will go towards education
  • 40% will go to a community grants reinvestment fund
  • 20% will go to a drug treatment and public education fund

New York’s new legislation comes with a unique component: public consumption. That’s right. Wherever tobacco can be consumed, so can cannabis. New York is currently the only state in the nation allowing for public cannabis consumption. It’s a big deal and, needless to say, the cannabis community (especially in New York) is thrilled.

The New York cannabis market is one to jump on if you’re serious about the industry. The state has been trying to legalize cannabis for years, and New Yorkers have long supported it. It was actually supposed to come to fruition in 2020, but like basically everything else, COVID-19 stopped it in its tracks. 

Also, alongside adult consumption, the legislation implements a social and economic equity program to propel those license applicants who were disproportionately impacted by cannabis prohibition. This applies to “marijuana producers, distributors, retailers, and other actors in the cannabis market,” according to the official government website. The state plans to award 50% of licenses to these applicants, with service-disabled veterans and distressed farmers included in these groups, too. The law will also automatically expunge prior cannabis offenses that would be seen as legal actions today, freeing countless New Yorkers’ criminal records.

The CCB is working quickly to establish requirements, however, we don’t yet have all of the details surrounding applications for retail stores. The Office of Cannabis Management (OCM), installed when New York’s medical marijuana program was passed in 2014, will announce specifics over time. However, there are some things we do know about opening a retail location. So if that’s your next move, read on to learn how to open a dispensary in New York.



Currently, the application fees for cannabis businesses have not been clearly defined. As the OCM establishes regulations for the adult-consumption program, these details will be announced. 

New York’s medical cannabis program, however, required a non-refundable deposit of $10,000 and a refundable deposit of $200,000, returned only if you didn’t receive a license. The adult-consumption program may follow similar patterns, so it’ll be interesting to see it unfold. 

The OCM has an official website, though it’s pretty bare-bones for now. Its email address is; we recommend emailing the office and asking if you can be notified about updates regarding application fees and other decisions made before sales begin. 

One thing you should plan on: hiring a consulting group to help you secure a license. Cannabis license applications are tedious and require complex answers about the law you may not know the answer to. 

Some states only have the window for applications open for a certain period of time, so if you aren’t hitting the ground running, you might be too late. Once the window closes, it’s closed. New York may or may not have a window, but regardless, a consulting group with a proven track record in securing cannabis licenses may be crucial to your success.


Geographical Restrictions

Most states, if not all, allow individual counties and towns to choose whether or not they want to allow cannabis businesses in their area. New York is no exception. So before you scout your dream dispensary location, be sure you can legally operate there.

It is vital to know where your local government stands since 769 municipalities opted out of adult-use cannabis sales by the December 31 deadline.  About 118,000 New Yorkers live in cities that opted out.  Municipalities may rescind their decision not to participate at any time by opting in, although this decision may be unlikely.  In addition, local municipalities have the final decision on whether or not public consumption lounges are allowed. 58% (884 municipalities) voted against it. Opt-out data is according to a statewide tracker system maintained by the Rockefeller Institute.


Securing Capital

It’s difficult to generate capital in the industry, simply because the federal government still considers cannabis to be an illegal controlled substance. This largely forbids banks and other traditional lenders to work with cannabis businesses, so companies are left primarily with private investors as a source of capital. Thankfully, cannabis can be pretty lucrative if you do it correctly, so there are plenty of private investors willing to work with you if you prove yourself. 

We also mentioned New York’s legislation making room for underserved communities in cannabis, but private investors are also doing the same thing. There are many cannabis companies focusing on rebuilding minority groups, so if you’re a part of one of these communities and have a solid pitch and plan, hopefully you can find an investor you align with. 

Be forewarned: it is not cheap to operate a cannabis dispensary, especially if you plan to operate it in, say, New York City. 

According to Cova Software, you’re looking at a minimum $150,000 and up to $2 million to simply open the dispensary. Let’s face it: the chances of operating a dispensary in New York for $150,000 are very low. You may not need to set aside $2 million, but New York has a high cost of living that will require more than $150,000 to begin. Let’s also not forget the additional costs of operation after you launch:

  • You’ll pay approximately $100,000 in annual rent.
  • You’ll pay roughly $50,000 in professional services that come with operating a retail store.
  • Set aside about $250,000 a year to pay your staff.
  • You could be looking at about $25,000 a year for marketing efforts.
  • Surveillance systems can cost around $50,000 or more.
  • Set aside funds for a whole host of other expenses, too.


Staffing for Cannabis

We mentioned staffing costs, but you’ll also need to ensure your employees are cannabis-educated and familiar with the products you have. There will be plenty of people who have never consumed cannabis entering your storefront. Your staff needs to educate them appropriately and be able to recommend a product to meet their needs. 

You are responsible for ensuring your staff is trained. The best way to keep your staff knowledgeable is by having concrete standard operating procedures (SOPs) for all staff members to follow after completing a comprehensive onboarding training program. SOPs set a standard for your business and give your employees a tangible point of reference for operations. Set the model for every employee and always put your customers first. 

Remember, every dispensary around you is searching for the same thing: knowledgeable, passionate, and hardworking budtenders. Expect to pay your employees between $12 and $16 an hour, but remember New York’s high cost of living will require you to compensate people fairly. New York City, for example, has a required minimum wage of $15/hour. So if you’re operating there, that’s your baseline for pay.


Finding Product

If you’re not a vertically integrated operation, meaning you have a cultivation and manufacturing license too, you’ll need to source your products from outside suppliers. As it seems now, New York doesn’t have too many limitations on what consumers can and can’t buy. 

The best thing to do is begin reaching out to your cannabis-friendly network in New York now. If you don’t have a network, consider joining LinkedIn and building a virtual one. When you work with a supplier, it’s crucial you see eye-to-eye. These are the people responsible for providing your customers with their products. 

It can be hard to maintain a good relationship when problems like inconsistent product, sloppy packaging, poor communication, and unreasonable prices take over, so always put your customers first and consider terminating those contacts if you spot major red flags.


Maintaining Compliance

Compliance is the cannabis industry’s most and least favorite word. Maintaining a compliant cannabis business is tedious. You’re operating under clashing federal and state laws creating the most confusing gray area, and not to mention the regulations can change from county to county. 

But at the same time, compliance keeps you open, keeps your customers safe, and helps to set you apart from the bad players in the industry. Consider hiring an attorney or cannabis compliance consultant who can keep you abreast on the everchanging regulations.


Marketing Your New Dispensary 

This is the fun part. Well, to us, the cannabis marketers. 

What are some things you might need to know in terms of marketing? Social media and traditional ads are a no-go most of the time, thanks again to the clashing federal and state laws. This doesn’t mean you can’t use social media to promote your business, and in fact you should, but you just have to go about it a little bit differently. You can’t post pictures of the cannabis itself on Facebook or Instagram (you can on LinkedIn!), but you can post other company lifestyle photos that amplify your brand’s message. 

One of the most important tools will be utilizing Google My Business to attract local traffic. You know when you Google “Applebee’s” or “Applebee’s near me” and a business listing comes up under the map? Those are Google My Business listings and they increase your company’s visibility, as well as allow your customers to leave reviews. 

Digital marketing done right will propel your dispensary forward (and to the top of Google) while helping you differentiate your brand. Whether you need help with application writing services or you need marketing support once you’ve secured your dispensary license, reach out to us to book your complimentary consultation.



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