- Housing Works opened the first dispensary in New York State on December 29.
- A real estate expert says licensees are now struggling to find the right property for their business.
- Business owners face strict regulations and uneducated owners in their search for a storefront.
New York state’s first legal dispensary opened in December, but a commercial real estate expert says cannabis business owners have big hurdles to overcome before they follow suit.
In March 2021, New York State legalized the recreational use of marijuana for adults, but it took nearly two years for the first 36 business licenses to be approved by the Office of Cannabis Management. The next hurdle, director of real estate Gregory Tannor of Lee & Associates NYC told Insider, is finding the right real estate for stores.
According to Tannor, opening a physical dispensary isn’t quite the same process as opening a coffee shop or a clothing store. There are “buffer zones” that cannabis business owners must respect when buying real estate.
“Buffer zones are crucial for CMO approval,” Tannor told Insider. “These locations must be outside of a certain vicinity of schools, places of worship, parks and other dispensaries.”
In order to comply with New York’s buffer zones, a cannabis business cannot be within 500 feet of a school or 200 feet of a place of worship, according to a Bloomberg report. Tannor adds that businesses must also be within 1,000 feet of another dispensary.
Hesitant owners are another hurdle that licensees will have to overcome to open a storefront. The federally illegal status of marijuana, coupled with New York City’s bad reputation for illicit smokehouses, means building owners often have reservations about renting to a legal dispensary.
“There are owners who just aren’t interested, but we try to educate them about what a dispensary really is, feels, smells, tastes and the type of population it attracts,” Tannor said.
However, other landlords are aware of the multi-billion dollar cannabis industry and hope to take advantage of the opportunity by raising the rent for cannabis businesses.
“When you find the property compliant, the next step is to deal with some of these landlords who are starting to impose cannabis tax on their property,” Tannor said, adding that’s where he and his team come in. “with a Real Estate Compliance Rolodex” to help you.
Despite the uphill battle to open legal dispensaries in New York, Tannor told Insider to expect more places to buy weed to open in the coming weeks. He predicts stores will open “on a rolling basis” throughout 2023.