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The cannabis industry in New York is growing rapidly, but it hasn’t come without its fair share of challenges. In a recent Qredible Live broadcast, Brian Fitzpatrick sat down with Herb Barbot, the former Director of Operations for the New York State Office of Cannabis Management (OCM), to discuss the evolution of cannabis regulation in New York, the state’s efforts to balance social equity with market growth, and the path forward for the cannabis industry.
Herb Barbot brings a wealth of experience to the table, having spent years as a healthcare attorney and transitioning into operational leadership within the cannabis regulatory space. His role at OCM positioned him at the heart of New York's ambitious cannabis rollout, giving him firsthand insight into the obstacles and opportunities presented by this nascent market.
Herb shared how his legal expertise in healthcare helped him navigate the complexities of cannabis regulation. While providing legal advice is one thing, switching to an operational role allowed him to see the real-world impact of those regulations on the day-to-day operations of businesses—a crucial perspective in an industry as new and tightly regulated as cannabis.
New York's cannabis industry has made significant strides in a relatively short period. As of 2024, the state has over 213 legal dispensaries, with projections to reach 220 by the end of the year. The number of licenses issued has surpassed 1,100 across the supply chain, and the cannabis market is expected to generate up to $5 billion within the next few years.
However, the rollout has not been without challenges. Herb pointed out the state’s initial struggles with opening dispensaries at a sufficient pace. Staffing, regulatory hurdles, and infrastructure delays slowed the process. But now, as the pace picks up, the industry is showing signs of stability and growth.
Despite the progress, the rise of illegal cannabis shops in New York City remains a major issue. Estimates suggest there are between 2,000 and 8,000 illicit stores operating in the city alone, which hurts legal dispensaries trying to gain a foothold in the market. Addressing this will be key to ensuring the long-term health of the legal cannabis industry in New York.
One of New York's standout approaches to cannabis regulation has been its focus on social and economic equity. More than 53% of the state's cannabis licenses have been issued to individuals from historically marginalized communities, an effort mandated by the Marijuana Regulation and Taxation Act (MRTA).
This equity-first approach was not an afterthought but a core component of the state’s cannabis strategy from the beginning. Herb explained how centering equity has helped open doors for many who otherwise would not have had the opportunity to participate in this burgeoning industry. He emphasized the importance of keeping this focus as the market continues to evolve.
Looking ahead, Herb predicts that the cannabis market in New York will experience rapid growth in the coming years. With over 160 million in sales in 2023 and projections pointing to a billion-dollar market by 2025, the potential is immense.
But it’s not just about expansion. Herb stresses the importance of balance: growing the supply and retail sides of the market in tandem, ensuring that there aren’t too many stores without enough product or vice versa. This delicate balance will be key to the industry’s continued success.
Another exciting development is the state’s commitment to educating consumers. The launch of a new tool called "LOCAL" allows users to easily find licensed dispensaries near them—a step forward in ensuring that consumers choose legal and safe products. However, more public awareness campaigns are needed to ensure widespread adoption of this tool.
Herb believes that New York’s equity-focused approach could serve as a model for other states. By centering equity from the start, rather than as an afterthought, New York has ensured that the cannabis market is more inclusive and diverse.
Other states can also learn from New York’s legal challenges. Knowing that lawsuits are an inevitable part of any new regulatory system, New York has taken steps to mitigate some of the constitutional challenges that have tripped up other states.
The cannabis industry in New York is just getting started. While there have been growing pains, the state’s commitment to equity, balanced growth, and consumer education is setting the stage for long-term success. As Herb Barbot notes, the seeds planted in the early days of cannabis regulation are now beginning to bear fruit, and the future looks promising for both businesses and consumers in this evolving landscape.
To hear more insights from Herb Barbot, including the ongoing legal battles and the similarities between cannabis prohibition and alcohol prohibition, check out his podcast Joint Session: Diverse Voices in New York State Cannabis. It’s a must-listen for anyone looking to understand the intricacies of cannabis regulation in New York.
For more updates on the cannabis industry and its regulatory landscape, stay tuned to Qredible Live broadcasts on LinkedIn and YouTube.
