Cannabis in the Capital Region: “Ghost Dispensaries” and industry growing pains

For years and even decades, cannabis advocates have been working to educate the public about the medical benefits of cannabis. And even after New York legalized it in 2021, cannabis advocates like Melany Dobson, co-founder of Hudson Cannabis, said educating the public is still necessary and should still be the focus.

“Being able to cultivate cannabis is something that is deeply stigmatized in this country,” she said. “[It] requires a lot of education and rewriting the narrative.”

So far, over 200 retail dispensaries are licensed to operate in the state. But as more retailers and farms open up, so do places operating without a license or permit. These operations are known as ‘ghost dispensaries.’

Just a couple of weeks ago, the Town of Moreau officials reported that OCM confiscated the crop at Spier Falls Road Cannabis Farm because the owners allegedly did not have a license. 

Over the summer, the Cannabis Enforcement Task Force announced 230 closures of ghost dispensaries across the state. But as time continues, licenses and permits continue to be given out….even near other dispensaries.

Damien Cornwell, Board Member Operator of the Cannabis Associaton of New York (CANY), said he understands why many retailers are starting to worry about the possibility of operating within a saturated market.

“I think that, yet again, the devil is in the details,” he said. “If you’re on a city block…where you have a huge population, that thousand-foot rule would be less impacting than if you were in a city in upstate New York that has 43,000 people in the entire town.”

Due to the slow rollout of licenses, advocates say some equity license owners have ended up selling their licenses to others because they had financial struggles while trying to open their businesses.

“So again, it’s all these little things that can contribute to a system that’s not working as well as we would like it to work,” Cornwell said. “And a lot of that just has to do with structure- the infrastructure of an industry and the state’s ability to pull together…to make it so that people can navigate the challenges that they face every day.”

News Channel 13 reached out to OCM about the concern, and the office issued the following statement:

While there are no caps on the total number of dispensary licenses, distance regulations require most upstate retailers to be at least 2,000 feet apart, creating natural spacing between legal dispensaries. 

Additionally, minimum distance requirements from schools, houses of worship, and public youth facilities help limit the number of eligible retail properties. It is important to note that local zoning rules also play a significant role in determining dispensary locations.

OCM officials said New York generated $653.9 million in tax revenue last year, which is reinvested in the community.

40% is reinvested in education programs across the state, another 40% is invested into the community grants reinvestment fund, and 20% is reinvested in public drug treatments and addiction prevention programs for youth and adults.

But while there are benefits, many owners still hope to grow their business as more dispensaries continue to enter the market.

For the final part of the series, News Channel 13 will share how advocates want to bring health back to the industry’s focus and how the current infrastructure may be hindering the path toward psychedelic care.