As a Bronx teenager growing up in the 1970s, Gregory Pereira sold loose joints at clubs and after-hours spots for $1 a piece. It’s how he supported himself, since his mother was addicted to heroin and his dad lived on the other side of the country, he said.“We would buy a $5 bag – we would call them pillow bags – and get 20 joints out of it,” Pereira explained, marveling at the return on investment.Pereira, now 62, hasn’t sold marijuana for a long time and doesn’t toke up himself — but he’s looking to get back into the business as New York sets up its legal, recreational industry. It’s an opportunity he said his younger self would find very strange, given “all the times I hid and ran and got my ass beat by cops.”Pereira is among the more than 900 current applicants competing for one of the state’s first recreational dispensary licenses — all of which will be reserved for people with past marijuana convictions or their family members. To qualify, applicants also need to have experience running a successful business.The initial application window closed on Sept. 26, and the recently established New York Office of Cannabis Management now has the Herculean task of whittling those applicants down to about 150. That’s the number of licenses being distributed in the first round statewide, with about 70 to be located in New York City.At the same time, state officials are scrambling to fulfill their promise to secure and build out retail space for the first group awarded dispensary licenses and develop a $200 million equity fund to provide startup capital to those who need it. The goal is to have the first batch of dispensaries up and running before the end of 2022 — less than three months away.But this state-backed real estate process also comes with a lot of unknowns.For starters, applicants can’t choose exactly where they want to set up shop. Instead, they submitted their top location choices by region – or, within New York City, by borough – and now have to wait to see where the state places them.
On a recent weekday evening, Pereira and other aspiring dispensary owners gathered at the office of the Bronx Defenders. They had pizza and ice cream — and celebrated simply having made it through the difficult, weekslong application process, which required them to dig up old tax forms and criminal records, among other documentation.Eli Northrup, one of the attorneys who guided people through the process, offered applicants a note of encouragement.“We think a good number of those [900] applications are from people who don’t even qualify,” Northrup said at the gathering, noting that hundreds were submitted at the last minute. “You all qualify.”The Bronx Cannabis Hub, a project launched in July as a collaboration between the Bronx Defenders and the Bronx Community Foundation, was set up to identify candidates for initial licenses and help them get to the finish line. The group screened about 600 people, most of whom were not eligible, Northrup told Gothamist. It ultimately helped about 30 people submit applications before the Sept. 26 deadline.“There were a number of other people that came to us too late and we just didn't have the capacity to help them, or, in the end, couldn't get everything together to get their applications in,” Northrup said.Earl Jones, an applicant who worked with the Bronx Cannabis Hub, said he and his business partners avoided naming Manhattan as one of their top two choices for their dispensary because the rent burden might be too high.“We think it’s not feasible for a startup like we are,” he said. Instead, they named Co-op City in the Bronx as their first choice.“It's one of the largest housing developments in the country and has proximity to the major highways,” Jones said.
Getting to the finish line
The decision on where the retail spaces will be located falls onto a little known state office.The Dormitory Authority of the State of New York is currently in the process of identifying locations for the retail shops and speaking with landlords, although it has yet to sign any leases, according to Jeffrey Gordon, a spokesperson for the agency.Once the state secures retail spaces, it will work with companies that both design and build out facilities to set up the dispensaries before handing the keys to the license holders. The license recipients will then be responsible for paying rent — which could be a heavy burden, depending on where the sites are located.Jesse Campoamor, who helped craft the Marijuana Regulation and Taxation Act and has been working with dispensary applicants as a consultant, said he is concerned that some of properties will be expensive “vanity locations” that will make it hard for applicants to see a quick return on their investments.“The state's intention is actually pure and good here,” Campoamor said. “It's like, ‘Let's not give the [first] applicants some shanty store in a bad part of town.’”Gordon said that in identifying potential properties for retail locations, the state is accounting for a range of factors, including location, size, and price.Jillian Dragutsky, an applicant who listed Manhattan as her first choice for a retail space and Brooklyn second, said she is banking on being able to cover rent from the store’s revenue — despite some concerns about whether the initial marijuana supply will be able to meet consumer demand.
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