Opening a New York Dispensary: How to Break Into the Budding Industry

Mack Bush
May 19, 2022

Opening a cannabis dispensary in New York is tantalizing for many professionals and aspiring business owners in the state. However, the process of applying for a license and opening a New York dispensary can be daunting.

New York legalized adult-use cannabis sales in 2021, but there were delays in the process for obtaining licenses to open legal dispensaries. The first legal marijuana sale took place in December 2022, and the industry has exploded since then. As of May 2023, New York has approved 165 provisional retail dispensary licenses.

Even though many licenses have been issued, it’s not too late to break into the New York cannabis scene. Experts estimate that New York’s legal cannabis market will make $4.2 billion by 2027, making it the country’s second-largest recreational cannabis market.

Want to get in on this growing market and start your dream dispensary? Here’s a rundown on how to open a dispensary in New York in 2023.

What are the Current New York Cannabis Laws?

It is legal for any adult over the age of 21 to buy, possess, or consume marijuana in New York. They can legally possess up to three ounces of cannabis and up to 24 grams of cannabis concentrate for personal use anywhere in the state.

Adults 21+ can use cannabis in a private home, as well as most places where tobacco can be consumed. However, it is not legal to consume marijuana in a motor vehicle, in a private business, at a hookah or cigar bar, or on federal property.

Businesses must have an adult-use dispensary license to sell cannabis. Many illegal shops have opened across the state, especially in New York City, but their owners could face serious legal trouble. It is not recommended to operate or support an illegal cannabis store.

There are many requirements that cannabis dispensaries in New York must follow, including restrictions on products, exterior signage, pricing, and staffing. Dispensaries also need extensive security, including 24-hour surveillance and motion-triggered alarm systems. The state lists the current cannabis laws on their website.

An "open" sign on a New York cannabis dispensary.

What License Do I Need to Open a New York Dispensary?

In order to open a New York dispensary, you’ll need to obtain an Adult-Use Retail Dispensary License. This license allows your business to possess, sell, and deliver cannabis.

The first retail dispensary licenses available, called a CAURD license (Conditional Adult-Use Retail Dispensary License) had specific qualifications for applicants. The application for this program is now closed, but may open again in the future.

To be eligible under qualifying business criteria, at least 30% of the business must be owned by a person that:

  • Is justice-involved
  • Has qualifying business experience
  • Has a significant presence in New York State

New York dedicated many of its resources to helping people that have been negatively impacted by previous marijuana convictions. The Cannabis Social Equity Commision backs this choice to help people who were most impacted by the war on drugs. 

You may be a justice-involved individual if:

  • You were convicted of a cannabis-related offense in New York State before March 31, 2021
  • You had a parent, legal guardian, child, spouse, or dependent who was convicted of a cannabis-related offense in New York State prior to March 31, 2021
  • You were a dependent of someone who was convicted of a cannabis-related offense in New York State before March 31, 2021

If you’re a justice-involved individual, you also need to have owned at least 10% of a qualifying business to be eligible for a CAURD license. Any business can count towards this requirement, regardless of the type of services it provided, structure of the business, or where it was located. A qualifying business must have had a net profit for two of the years the business was operational.

Applicants must also meet a third criteria: you need to have a significant presence in the state of New York. The state wanted to prioritize its citizens, allowing them to open the first dispensaries.

You may qualify as having a significant presence in New York if you:

  • Currently live in New York
  • Own vehicles in New York
  • Own land in New York
  • Own a primary or secondary property in New York
  • Own rental homes in New York
  • Have a bank account in New York
  • Have some other connection with or in New York

As of May 2023, applications for a retail dispensary license have not reopened for CAURD applicants. It’s possible they may reopen in the future.

Applications have not opened for non-CAURD applicants, but we expect them to open at some point during 2023. However, it’s not clear what the requirements will be or who will qualify. KayaPush will keep you updated on the newest details about how to open a dispensary in New York.

Statue of Liberty in New York.

What are the Steps to Open a Dispensary in New York?

You may be wondering how to open a dispensary in New York now, after the deadline has passed. Unfortunately, you’ll have to wait until the state reopens applications to apply. However, there are some things you can do to make sure you’re ready to jump on the opportunity when the window opens.

You can start by looking over the application process from the previous round. Make sure you have all of the necessary information and prepare your required documents.

You’ll need to show that you have a vision for the future of your dispensary. Write a business plan and get feedback from other professionals. You can use this time to make sure your application is the best that it can be. Create branding, visuals, and decide on a name.

You may also use this time to determine where in the state you’d like to open your dispensary. There’s obviously a huge demand for cannabis in New York City, but there’s a market for marijuana throughout the state. Your dispenary location will play a huge role in your business’ success. Start conducting market research and location scouting now, so that you are ready when applications reopen. 

You can also start raising capital to create your New York dispensary. Starting a cannabis dispensary can be very expensive, so it’s helpful to have investors who believe in your vision. You can work on your presentation and pitch to investors while you wait.

The Brooklyn Bridge in New York on a rainy day.

How Much Does It Cost to Open a Dispensary in New York?

Opening a New York dispensary requires a big up-front investment. Depending on the dispensary’s size, it could cost between $500,000 to $2 million to get your New York dispensary operational.

This figure accounts for a variety of business expenses, 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

Ultimately, opening a New York dispensary is a profitable opportunity; however, you’ll need a large amount of capital to invest in your business’ future. Make sure you have a plan to secure your funding.

Final Thoughts on Opening a New York Dispensary

With a $4.2 billion market estimation within the next five years, opening a New York dispensary is a lucrative opportunity. But success is not guaranteed. You will need to establish ties and connections within New York, abide by all state and local regulations, and secure funding to become operational. And most importantly, you must recruit an exceptional team. Your team of budtenders are the face of your business. An educated and motivated team can create memorable experiences to build brand loyalty, leading to a thriving business.

Recruiting and retaining the best can be challenging — and costly. Luckily, KayaPush can help. Our all-in-one employee management software makes it easy to start your New York dispensary. You can use it to recruit your team, track time sheets, and even do payroll. Schedule a free demo today!

To learn more about opening a dispensary in New York, download our free guide! 

how to open a dispensary in new york

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