Member Blog: 5 Things You Need to Do Before You Launch Your Cannabusiness in New York

Cannabis was legalized in New York in 2021, and now the market is starting to fully open up for all types of cannabusinesses across the state. Despite a rocky start to rolling out new licenses, it’s almost time for the general public to dip their toes in and start their own dispensaries.

New York’s legal cannabis market is projected to be worth $4.2 billion by 2027, making it the country’s second-largest recreational cannabis state. It won’t be long before cannabis businesses have hundreds of locations across New York.

Curious about how to open a New York dispensary? Here are five things you need to do to get ready for your blossoming cannabusiness.

Conduct Market Research & Choose a Location

Since many cannabusinesses will be opening up in New York in the next few years, you need to ensure that yours is set up for success from the start. The best way to secure success is by selecting a high-demand area with minimal competition. You can identify lucrative locations by exploring different neighborhoods and conducting market research.

Visit prospective spots in person, instead of just looking at them on a map. You’ll get a much better sense of the feel of the area, the type of people walking through, the surrounding businesses, and more. And if feasible, talking to residents and local business owners will help you to really understand the market.

It is also important to be mindful of the New York zoning laws before securing a location. According to statewide zoning restrictions, a cannabis dispensary can’t be on the same road or within 500 feet of a school and 200 feet from a house of worship. Cities may have additional restrictions to limit the number of cannabis dispensaries in a certain location. Do your research before you get married to a location that won’t work out for logistical reasons.

Apply for a License

You’ll need a license to open a cannabusiness in the state of New York. However, as of October 2023, the path to applying and receiving a cannabis license in the state is a little up in the air.

When applications for the first licenses opened up, New York legislators wanted to ensure that people who were negatively impacted by the state’s previous criminalization of cannabis could apply first. This included people who were convicted of a cannabis offense in New York or were affected by a loved one’s conviction.

Now, starting on October 4, 2023, New York will start accepting license applications from a much broader pool of entrepreneurs. Applications are open to everyone over the age of 21 who does not already have three licenses. This is exciting news for many aspiring cannabusiness owners who were not eligible the first time around.

However, these licenses may not be issued as soon as prospective owners hope. When the state legalized cannabis, its goal was to award half of the retail licenses to people with previous cannabis convictions, racial minorities, women, and veterans disabled during service. Several veterans have filed a lawsuit stating that veterans were unfairly passed over for the early licenses. The judge in the case ordered that the state wait to award any new dispensary licenses until the case continues.

Keep an eye on the New York Office of Cannabis Management’s website for updates on the next round of licensing applications.

Secure Funding for Your Cannabusiness

Opening a dispensary in New York will be expensive. While profits will likely be high once you open, you need to find a way to secure the funding needed to get your cannabusiness operational — which experts say could cost between $500,000 to $2 million.

This figure accounts for a variety of expenses for your cannabusiness, including:

Licensing and application fees
Lawyers and consultants
Real estate
Dispensary design and construction
Staffing
Business equipment
Surveillance and security system
Marketing and advertising
Products and inventory

Many cannabis entrepreneurs take out loans to cover these up-front costs, either from credit unions or cannabis-friendly banks. Some are able to partner with others or enlist investors to start their businesses. However, you should do your due diligence and research before taking on a loan or going into business with an investor. Unfortunately, there has been some predatory lending occurring in the market because of the inability to lend from large banks. Make sure that you do this research before you get too far in the process of creating your cannabusiness.

Understand Cannabis Laws & Regulations in New York

There are hundreds of laws and regulations that apply to cannabusinesses in New York. While this can feel overwhelming, it’s important to follow them carefully, especially when you’re setting up your dispensary.

There are some regulations that apply to your customers that you’ll need to adhere to, including:

Customers must be over the age of 21
Customers can only buy 3 ounces of cannabis flower per day
Customers can only buy 24 grams of cannabis concentrates per day

Others regulations apply to your business location, including:

Installing a 24-hour commercial-grade security system
Installing a perimeter alarm
Conducting video surveillance in every part of the store with cannabis products
Products cannot be visible from outside of the store
Maintaining minimum staffing levels (depends on business plan submitted with application)
Training staff on local ordinances, laws, and cannabis safety

It’s vital to take these rules seriously from the beginning. Neglecting even a single law could result in your dispensary getting shut down. You can consult an extensive overview of the New York cannabis laws and regulations here.

Invest in the Right Team

You need to hire a team of high-quality employees who will help your business succeed from the very first day. Your budtenders can make or break your entire business model, so you need to vet them carefully and train them well.

Your budtenders will be interacting directly with clients. They’ll answer their questions, suggest products, and upsell items. Hire these employees carefully, and make sure they’re happy in their positions by offering great pay and benefits.

To streamline training, create training manuals and SOPs (standard operating procedures) so that every employee is trained in the same way. This will limit mistakes and increase efficiency and customer satisfaction.

Final Thoughts on Launching Your New York Cannabusiness

Cannabis is expected to become a booming industry in New York. If you’ve always dreamed of opening a cannabusiness, now’s your chance to get in as early as possible and make your impact on the market!

Member Spotlight: Consumer Research Around Cannabis

In this month’s member spotlight, we learn more about Consumer Research Around Cannabis from Vice President, Jeffrey Stein. The mission of Consumer Research Around Cannabis is to deliver market research that merges cannabis & marijuana usage data, perceptions, and attitudes regarding marijuana, with hundreds of local consumer-level demographics, lifestyle information, shopping trends, media habits, and numerous plan-to-purchase targets.

Consumer Research Around Cannabis

Member Since:
November 2018

Industry Sector/Business Type:
Data Services

Tell us a bit about you, your background, and why you launched your company?

I spent many years in the broadcast industry in sales & management. Driving revenue in this sector has not only been about quantitative ratings, but about the qualitative position of your audience – in demonstrating that a properties audience matched the consumer characteristics of the proposed client. When a client leans more on the qualitative aspect of a media property, they always enjoy more success – revenue – ROI. This was an area that always fascinated me and where we had the most success.

Consumer Research Around Cannabis is the sister company of The Media Audit – a company which surveys local markets in order to help broadcasters and publications better position its audience against consumer characteristics like income, demographics, education, plan to purchase and hundreds of other consumer targets. With this expertise already in place, it made sense to add cannabis consumer questions to the consumer surveys. This is how Consumer Research Around Cannabis was born.

What unique value does your company offer to the cannabis industry?

The cannabis industry is no different than any other consumer industry. Products are developed and put on the market. There is no consumer products company which does not lean on consumer research to help them make better decisions on products, packaging and marketing – the cannabis industry is no different. What is obviously unique is that cannabis is relegated various laws on a state by state basis.

Through our proprietary software, we can take cannabis consumer targets (legal opinions, purchasing, category choices, and behavioral choices) and cross tab that against traditional consumer data to help answer questions facing cannabis companies today and into the future. And we do it on a market by market and state by state basis.

What kind of challenges do you face in the industry and what solutions would you like to see?

In order to continue to be relevant, we have to adjust our questions and offerings as the cannabis industry grows. One example is merging our data with other databases to further refine our research. We also have to be cognizant of new cannabis products and the ever growing cannabis research, especially on the medical side. And of course, evolving state regulations.

Why did you join NCIA? What’s the best or most important part about being a member?

As a small, growing company, we have a limited budget so we have to choose the organizations we join carefully. NCIA seems to be the place where all cannabis companies come together to further the industry and, to see how other cannabis companies are evolving.