New York Makes Two MSOs Wait for Recreational Market Entry

During a chaotic meeting on Friday, New York marijuana regulators told two multistate operators that they’ll have to wait at least a few more weeks to join the state’s recreational cannabis market.

Members of the state’s Cannabis Control Board split 2-2 on a motion to let two licensed medical marijuana companies – Fiorello Pharmaceuticals Inc., which is owned by Green Thumb Industries (CSE: GTII) (OTC: GTBIF), and Citiva Medical LLC, which is owned by iAnthus Capital Holdings Inc. (CSE: IAN) (OTCQB: ITHUF) – transition fully into the adult-use market.

The tie vote meant the motion failed, forcing the two companies to wait until at least the board’s January meeting, which has yet to be scheduled.

Neither company responded to requests for comment Tuesday.

Six other so-called “registered organizations,” the formal term for the 10 licensed MMJ companies in New York, were given the green light last month to start recreational sales on Dec. 29, and it’s unclear why GTI and Citiva had to wait.

It’s also not clear why the motion failed. Two board members who abstained from voting on the motion – Chairwoman Tremaine Wright and member Dr. Jennifer Gilbert Jenkins – didn’t spell out their reasons for not supporting the transition. A fifth board member, Jessica Garcia, recused herself from the vote, citing a possible conflict of interest.

At times, board members spoke over each other and over Chris Alexander, the executive director of the Office of Cannabis Management, which had recommended that the board give GTI and Citiva the thumbs up. Gilbert Jenkins also accused Alexander of labeling her “anti-farmer” in an email, a characterization she said she spent most of December fending off.

Gilbert Jenkins was also irate that the board meeting had been rescheduled at the last minute from its original date of Dec. 20 to Dec. 29, which she suggested during the meeting was at the behest of “outside forces.”

“I’m really confused why I’m being asked to come off of vacation with my family to do this normal business that could easily be taken care of during our January meeting,” Gilbert Jenkins said. “What’s so important that I need to be here right now?”

Gilbert Jenkins said the Friday meeting makes it look like the CCB is prioritizing large companies instead of small mom-and-pop operators. She repeatedly asked why the CCB wasn’t more focused on extending the cannabis growers showcases, which helped many of the state’s 279 conditional farmers unload marijuana products.

All of the showcases – which were essentially cannabis farmers markets – were closed at the end of 2023, and thus far there’s no plan to legally set up more.

“The optics of this, to me, are that we are going outside of our way to help a small group of people and not others. That, I find very problematic,” Gilbert Jenkins said.

The OCM’s Alexander said the opposite is true, and that what the OCM is trying to address is a “lack of dispensaries” statewide, given that only 40 legal shops are operational, compared to an estimated 8,000 illegal marijuana sellers doing business in New York.

“Adding a dispensary is not counter to the (showcases); it’s supportive of a supply chain that functions. We need more dispensaries. We’re trying to add more dispensaries,” Alexander said.

An OCM spokesman confirmed that both GTI and iAnthus will be up for another board vote, likely in January, to allow them to enter the New York recreational market.

There are two other R.O.’s in New York that have not yet been considered for a transition to the recreational market: MedMen Enterprises Inc. (CSE: MMEN) (OTCQX: MMNFF) and Vireo Health International, which does business as Goodness Growth Holdings (CSE: GDNS) (OTCQX: GDNSF). It’s not clear if those two companies have even applied for adult-use licensure in New York.

Before the close of the Friday meeting, the CCB approved the addition of two new cannabis testing labs – Falkor Labs and Aardwolf Labs NY LLC, which does business as New Bloom Labs. Both are located in Syracuse, and the additions brings the statewide total of marijuana testing labs to 18.

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