These 36 Finalists Are Likely to Be New York’s First Marijuana Retailers

New York took a significant step on Sunday toward launching a legal market for recreational cannabis by announcing the 36 businesses and nonprofits under consideration for licenses for the first retail dispensaries in the state.

The Office of Cannabis Management published the list of candidates ahead of a vote on Monday by its governing body, the Cannabis Control Board, that would ramp up the race to begin legal sales in the state despite a legal challenge to the licensing program. Regulators also released 282 pages of draft regulations laying the foundation for the broader market.

The candidates, who were chosen from a pool of 903 applicants, are mostly businesses owned and controlled by people who have been convicted of cannabis-related offenses or their close relatives, as well as a few nonprofits that serve people with histories of arrest or incarceration. All the listed finalists are expected to be approved during Monday’s vote.

The licensing effort was designed to help the state meet its goal of prioritizing people in communities heavily targeted during the war on drugs, for opportunities in the legal cannabis industry. Like the rest of the country, marijuana prohibition in New York mostly swept Black and Latino residents into the criminal justice system despite similar levels of use across all races.

The list released Sunday, which identifies candidates by their application number, includes at least three New York City-based nonprofits: Housing Works, The Doe Fund and LIFE Camp, officials representing the organizations confirmed.

Axel Bernabe, the chief of staff and senior policy director of the Office of Cannabis Management, said earlier this month that the first round of candidates recommended for licenses would represent the “top class” of applicants.

Once approved, state regulators “will be assisting them as much as possible to find an office, open a dispensary and start essentially dispensing the estimated 200,000 pounds of product and several hundred product lines that we are seeing coming out of conditional growers and processors,” Mr. Bernabe said on Nov. 3 at the Business of Cannabis Conference.

The draft regulations lay out fees and timelines for several other license types, including cooperatives and more retail, as well as conditions for the state’s medical cannabis providers to enter the recreational market. The public will have 60 days to comment.

But guidelines governing delivery services that were highly anticipated were not included, and regulators said they would become available at a later date.

New York legalized cannabis for adult recreational use last year in March, allowing for possession of up to three ounces of weed or 24 grams of concentrate for personal use. Officials have said that retail sales would begin before the end of 2022.

LIFE Camp, a nonprofit Erica Ford founded in 2002 to help reduce violence and arrests in Southeast Queens, may become the first Black woman-led nonprofit to receive a license.

Ms. Ford said the vast majority of her workers, who run the gamut from marketers to violent conflict mediators, have negative experiences associated with decades of prohibition of marijuana, including being victims of violence, or having been arrested. Being considered for a license, she said, gives her hope “that working together, we can make some real transformation.”

“And we want to hold the cannabis board, and all of those involved in this industry to the ground of honesty,” she said.

The first wave of applicants are vying for a total of 175 licenses, which allow operators to open up to three dispensaries. The vast majority, 150, will go to businesses which the state plans to provide with turnkey locations — properties to be rented — and loans covering the cost of preparing the storefronts. The remaining 25 licenses are reserved for nonprofits.

Three of the candidates are entrepreneurs who were assisted by the Bronx Cannabis Hub, a partnership between the Bronx Defenders and the Bronx Community Foundation offering pro bono legal assistance, according to Eli Northrup, a policy counsel at the Bronx Defenders. They were a family from the Bronx, a man from Long Island and a man from Queens, he said.

“I’m so excited for these individuals who represented the cross-section of New York who has been targeted and suffering from marijuana policing,” he said.

Housing Works, a nonprofit that serves people who are homeless and living with HIV and AIDS, said in a statement that the organization was “honored” to be considered for a license, adding that having one would help “further our mission of ending the twin crises of AIDS and homelessness.”

New York is the first state to explicitly reserve licenses for nonprofits, and it is unclear how that might affect their federal tax status since cannabis remains illegal at the federal level.

One of the candidates up for approval on Monday is the Center for Community Alternatives, a Syracuse-based nonprofit that provides alternatives to incarceration for people who have been arrested and re-entry services for people returning to society from jail and prison throughout the state.

David Condliffe, the executive director, said that granting dispensary licenses to nonprofits like his has a benefit for public safety. “The programs we provide make communities safer,” he said. “And this becomes a way that those programs can be funded without leaning on the taxpayer. It’s really important and it will enhance public safety.”

The state is temporarily blocked from issuing 63 of the licenses allocated for five regions, including Brooklyn, due to an injunction in a federal lawsuit filed by a Michigan-based company challenging eligibility requirements. The plaintiff, Variscite NY One, argues that the criteria requiring applicants to have strong ties to New York, such as a residence or headquarters, and to have a marijuana-related conviction in the state, violate constitutional protections on interstate commerce.

The state has not said whether it plans to appeal the decision.