New York cannabis merchants are frustrated that they are unable to open pot lounges, where customers can consume weed on site, due to the slow pace of regulatory development. The Marijuana Regulation and Taxation Act of 2021 legalized marijuana and allowed for the licensing of “consumption sites,” but four years later, the Office of Cannabis (OCM) has yet to draft the necessary rules.
Many licensed cannabis dispensaries in New York are eager to open lounges, where customers can consume cannabis products, such as edibles and infused beverages, in a controlled environment. However, the OCM has yet to publish the regulations needed to allow these lounges to operate.
Arish Halani, CEO of Herbwell Cannabis, expressed frustration over the delay, stating that his company is set to open a flagship store in Midtown Manhattan, but cannot apply for a license to open a lounge due to the lack of regulations. Herbwell has designed a sleek lounge space on the upper floors and rooftop of the building, which could be a hit with white-collar executives and fashionistas who work nearby.
Other licensed dispensaries, such as The Cannabis Place in Queens, have also expressed disappointment over the delay, stating that they are eager to provide customers with a space to consume cannabis products. The OCM has stated that it is prioritizing the development of business licenses, including cultivation, processing, and retail, before moving on to consumption licenses.
One cannabis industry source suggested that state health officials are resistant to cannabis lounges because they would allow smoking and vaping in workplaces, which would sidestep the Clean Indoor Air Act. The OCM has stated that it is assessing regulatory approaches for consumption licenses and evaluating public health and safety considerations.
Despite the delay, the cannabis industry in New York continues to grow, with over 333 licensed dispensaries generating more than $1 billion in sales. However, legal operators are still grappling with competition from the black market, and the lack of regulations for cannabis lounges is a major obstacle to their growth.
