Roland Conner became the first person with a criminal conviction to open a licensed cannabis dispensary in New York with the state’s help.
Jan. 24, 2023, 7:51 p.m. ET
Roland Conner’s first foray into the weed business as a teenager in the early 1990s resulted in a string of arrests and convictions on possession and other charges.
Now, at 50, he is returning to the industry, this time with the state’s full support. Mr. Conner, who grew up in public housing in Far Rockaway, Queens, opened a dispensary on Tuesday in Greenwich Village under a state initiative to give people convicted of offenses related to cannabis a head start in the newly legal business.
The shop, Smacked!, is just the second licensed store to open since the state legalized recreational cannabis in March 2021. But Mr. Conner is the first entrepreneur with a marijuana conviction to open a dispensary as a result of the initiative, which is being watched across the country. (The other dispensary is owned by a nonprofit.)
“I feel like a guinea pig,” he said in an earlier interview inside his store on Bleecker Street, sandwiched between an Indian fusion restaurant and a stationery shop.
New York drew praise for placing entrepreneurs like Mr. Conner at the head of the line when planning the rollout of its legal cannabis market. The approach aimed to atone for the racially discriminatory policing of the so-called war on drugs.
But the implementation of the rollout has been bumpy. Unlicensed storefronts sprung up across the state, stirring confusion. Start-up financing and other support that state officials promised to the legal market have been slow to appear.
And regulators helping to find and outfit storefronts for licensed dispensaries like Smacked! have run into an unexpected challenge in a state where unlicensed cannabis retailers have opened seemingly everywhere: Landlords have been resistant to lease out spaces to the industry.
Desmon Lewis, a co-founder of the Bronx Community Foundation, said the state of play has left some business owners wondering whether they should continue to invest their energy in the licensing process. His organization is part of a coalition called the Bronx Cannabis Hub that helped 30 people apply, including Mr. Conner.
“There’s a lot of hope still, but there’s a lot of despair,” he said. “A lot of them put their chips on this opportunity. It’s taken much longer than they expected, and people are anxious.”
Regulators say they have been wrongly accused of dragging their feet when they have actually moved faster than most other states, building a new agency — the Office of Cannabis Management — and industry in a little over one year since the first official was appointed in October 2021.
Chris Alexander, the executive director of the cannabis office, said it would have been easier to hand the market over to deep-pocketed corporations and investors. “But we decided to take this long route,” he said. “And although we have gotten operational much quicker than most states have, we know that nothing in New York is fast enough.”
Last March, the state committed to support 150 licensees like Mr. Conner with prime real estate and start-up loans to help lower hurdles that have hindered people in other states. The cannabis agency’s governing board plans to award 28 of the licenses on Wednesday, adding to 28 that were issued in November. (The figures do not include nonprofits who received licenses under different rules.) Still, hundreds of applicants have been left waiting to learn whether they have been successful.
The highly coveted licenses give them access to a state investment fund set up last March to raise $200 million to finance their businesses. But the fund received no contributions last year beyond an initial seed of $24 million, and few leases have been signed.
“It’s been hard, all the pieces have been difficult,” Reuben R. McDaniel III, a member of the Cannabis Control Board, the cannabis agency’s governing panel, said in an interview in late December. “But ultimately, I believe when we look back, this structure will be one that people say that really was the most effective and efficient way to do this even though in the moment we’re sitting, it may not feel that way.”
Mr. McDaniel is also the president and chief executive of the Dormitory Authority, which comanages the $200 million fund under a partnership with a private firm. The agency additionally negotiates the terms of leases and some business services on behalf of the dispensaries.
Mr. McDaniel, a former investment banker, said it has enough money to finance the leasing, renovation and start-up costs for up to about 20 dispensaries. Bringing investors on board is a monthslong process, he added, and he expects additional contributions in the coming months.
But Mr. McDaniel said his agency had run into problem with landlords being unwilling to work with the state.
“I don’t think any of us expected the complications with mortgages and landlords who didn’t want to approve the use,” he said. But he added, “We feel good about how the real estate is moving now.”
The fund partners had looked at some 10,000 locations for potential dispensaries and whittled the prospects to 265 spaces, he said. Only about 70 landlords signed letters indicating they were willing to lease to dispensaries, and just four leases had been signed as of Dec. 30.
News that the agency had signed its first lease for a dispensary on West 125th Street in Harlem, across from the Apollo Theater, fueled backlash from a neighborhood business group. The response signaled the state could face resistance in some of the places that have been most harmed by drugs and enforcement.
Mr. McDaniel said that it would be “untenable” for the state to negotiate with every community about where it will open dispensaries. Nevertheless, he acknowledged that officials could have done a better job communicating how the dispensary in Harlem would be a benefit.
The concerns are rooted in fears of crime and disorder that have grown with the number of unlicensed smoke shops, many of which sell illegal tobacco and cannabis products. The businesses have emerged as attractive targets for robberies in New York City, where the police reported 593 incidents last year, more than double the 250 robberies from 2021.
John Chell, the chief of patrol, said during a recent City Council meeting that thieves netted about $1.5 million in cash last year, or about $2,500 per robbery. “The stores are making money, and the bad people know this,” he said.
Sheriff Anthony Miranda told the panel that officials have identified more than 1,200 smoke shops across the city, and that they are in the process of inspecting them for illicit activity.
Despite the turbulence in the rollout, cannabis regulators have given licensees some flexibility to speed things along by choosing their own locations, starting delivery services and opening as pop-ups. The Dormitory Authority has also signed contracts with private companies to provide a slew of services to the dispensaries, including renovations and accounting, banking, inventory tracking and point-of-sale systems.
All the contractors had been working feverishly over the last few weeks to get Smacked! up and running for its opening on Tuesday.
Inside, Queen Burr, 32, of Manhattan, hovered over a case containing small jars of smokable flower. Behind the counter, Gabriel Encarnacion, the store’s chief procurement officer, guided her.
“I like taste,” she told him. “That’s the terpenes,” he responded, referring to natural compounds that affect that taste, smell and color of cannabis.
Ms. Burr settled on a fruity strain from Harney Cannabis and another citrusy one from Lobo. She said she did not expect to entirely replace her dealer, who sells cheaper products, but that she’d continue to support the dispensary if she likes its offerings.
Eliz Cruz-Irvy, 42, a fitness consultant from the Bronx, reached the front of the line in the late morning, after waiting for over an hour. She applied for a license last year through the Bronx Cannabis Hub and is still waiting to hear if she got one.
While her own journey has required patience, she said she was eager to support another member of the cohort.
“I’m supporting him like I want someone to support me,” she said. “If I have to stand an hour on line, then that’s what I have to do.”
Mr. Conner, who also owns a real estate business managing an emergency shelter in the Bronx, said in the interview on Sunday that he hopes to bridge the legal industry and the legacy market that existed before, starting with his own son, Darius, 25, who was selling weed in Florida before he joined his father last year.
Mr. Conner’s wife, Patricia, 43, also joined the business, and they were soon confronting a task that was bigger than they had imagined.
Mr. Conner said that although there have been bumps in the road, he was sure they would ultimately succeed.
“Of course we will,” he said. “We’re legacy that’s legal now.”