Recreational marijuana can take New York to new heights
new York joins a growing number of states that have legalized recreational marijuana after state lawmakers struck a deal last month to allow the drug to be sold for recreational purposes. Dispensaries and “consumption sites” (eg, coffee pots) are now permitted, along with changes such as relaxing restrictions on medical marijuana.
To note: Although the legislation went into effect immediately, sales won’t begin until New York City puts in place rules and a cannabis advisory proposal, which means it could take two years for sales to start.
Real estate angle: Many owners will not do business with companies selling cannabis because the federal government still classifies marijuana as controlled substance, like cocaine or heroin. So, for homeowners keen on renting from cannabis companies, it’s very lucrative. Properties with federally chartered loans and mortgages cannot legally be leased to these tenants.
High rents: The owners were able to charge as much as three times market rates when selling or renting to businesses involved in the cultivation, distribution, processing or sale of cannabis.
Obstacles in play: The opening of a dispensary or a salon requires the flexibility of an owner; applicants must demonstrate that they are in possession of the premises 30 days after the approval of their permit, either by lease or by possession of a property, The real deal Noted. Openings can also impact surrounding businesses, attracting some while repelling others.
Zoning considerations: Like tobacco stores, marijuana retailers cannot be within 500 feet of a school or church, according to the law. No other location is prohibited. But cities and towns can use their zoning authorities to determine where dispensaries and other retailers may be located. This could involve placing dispensaries on the outskirts of cities, as adult businesses often are, or distributing retailers to avoid a cluster of businesses in one or more locations.
Like a liquor license: Under approved legislation, dispensaries will need to have a separate license to allow consumption on site. Like liquor stores and bars, there are separate categories for where consumers can buy the product and where they can consume it. And as of now, the laws also ban the sale of food and drink in cannabis parlors, although that could change as the Office of Cannabis Management tightens regulations, TRD noted. [AP+Gothamist+TRD]