The City of Peekskill is considering another cannabis microbusiness for manufacturing use, this time at 710 Washington Street.

Grand Street Cannabis Co., a state-licensed cannabis microbusiness, seeks a special permit to occupy approximately 7,301 square feet of a two-story multi-commercial tenant space located within the C-3 Zoning District.

At the June 16 Common Council meeting, Director of Planning Carol Samol requested the special permit be referred to the Planning Commission and a public hearing be held on August 18.

If approved, it would be the fourth cannabis business in the city, unless a proposed dispensary being considered at Highland Avenue beats it to the finish line.

Unlike dispensaries, of which the city already has two, the proposed microbusiness would have no retail on site and cannot engage in any consumer-facing transactions at the location. Instead it would produce limited cultivation, hydroponic cultivation and processing, drying, curing, trimming of the product, packaging, and distribution to other businesses, Samol said.

Such a cannabis manufacturing use special permit was approved in November at 1698 Main Street at the corner of Hamilton Avenue in the C3 Zoning District. That business has yet to open, according to Samol.

Joseph McDonald III, one of the owners and managers of Grand Street Cannabis Co., (GSCC) told the Peekskill Herald they are a family-owned business with indoor cannabis growth focused exclusively on flower.

“We’re really hoping that Peekskill’s the right match for us and we’re the right match for it,” McDonald III said. “We’ve had a really good experience going through the planning board process and we have a really good landlord. We intend to really put down roots, no pun intended, and to be part of the community, give back to the community.”

The proposed facility at Washington Street has plans for security, odor, mitigation, integrated pest management, water use and filtration, and waste management. It would operate 7 a.m.-7 p.m. with transport to businesses from 8 a.m.-6 p.m. It proposes starting with three full-time employees and expects to employ up to 10 by 2028.

McDonald, a Brooklyn resident and operator of a nonprofit providing education and job placement for people with disabilities, said it is their intention to hire locally.

“I really want to make sure that the money that we bring back into the community goes toward real impact needs for the community,” he said. “Whether that’s shelters [or] services for families. And I would seek out, through whatever connections I can identify, to hire from a pool of candidates who have otherwise systemic barriers to employment, whether that is income-based, whether it’s disability-based, whether it’s racism.”

Council share cannabis zoning law anxieties

Some on the council are once again having reservations about how many cannabis businesses there are, a result of the zoning laws the council created when the city opted to allow dispensaries in 2022.

“When we were sitting here and everybody was ‘okay, okay,’ we did not zone it,” Mayor Vivian McKenzie said. “Other areas around us have zoned it so… they only have one. And we did not do that. We just gave it a carte blanche.”

The Town of Cortlandt’s zoning code was specific enough that only one site met the requirements, with the town having increased to 1500 feet the distance a cannabis business can open near a park or a school. Peekskill uses the state-mandated minimum distance of 500 feet.

While the city is unable to adopt a moratorium on dispensaries due to state law, Samol said the city could look at adjusting its zoning laws in a way that could ban dispensaries in certain areas. Were this to happen, existing dispensaries would be grandfathered in, according to City Attorney Eric Gordon.

“We’ve learned a lot about these businesses in the year and half since we’ve been really having and seeing them,” Samol said. “We’ve learned some of the limitations of our regulations and other places where regulations should be added.”

McKenzie reported to Samol that while visiting a business directly next to a dispensary in Peekskill she was able to smell cannabis. Gordon said if odors are emanating, the city has to do enforcement to ensure odor control measures are being incorporated. In addition, all products are supposed to be sealed in dispensaries, Samol said.

Councilman Brian Fassett said he was open to the new microbusiness and the employment it could bring to a warehouse where nobody is currently working.

“If we’re doing it correctly, and we are mitigating [odors], these are the businesses that we do want to see because it is bringing employment to Peekskill,” Fassett said. “But we want to make sure that we’re doing it correctly, we’re not bothering the neighbors.”

Unlike dispensaries, microbusinesses have no distancing requirements due to their not being open to the public. Other uses in the Washington Street building include a mirror company and entertainment space company. A former spiral and floating staircase manufacturer was in the space previously. Applicants are not proposing any signage to advertise where they are.

“The desire there is to keep things spread out, to keep visual access limited so kids don’t see it,” Samol said. “They’re limited to the amount that they can grow, the space that they can grow in. But otherwise they’re not limited as far as the number and the proximity to other cannabis uses.”

McDonald told the Herald that it is not in GSCC’s current business plan to become a retail or processor, which would require reapplying for a license at the New York State Office of Cannabis Management. Though possibly down the road he said they could reconsider opening a dispensary three to five years from now, but at a different location than the proposed microbusiness.

Councilwoman Kathleen Talbot requested information on how successful the two dispensaries in the city are, noting she didn’t expect either to be performing off the charts in their first year of business.

In April, Peekskill Comptroller Toni Tracy reported in her first-quarter 2025 budget review, tax revenue from cannabis sales was lower than expected and estimated the total yearly tax revenue would also be lower than anticipated. 

The shortage was attributed in part due to the city’s lack of history with dispensaries. The city last year also anticipated it would have six dispensaries selling cannabis by now as opposed to the two it has currently.

Cannabis: successes, competition, awards

The proposed microbusiness on Washington Street is less than 1,000 feet from Cloud 914, one of two dispensaries that opened last summer. 

Shane Jackson, one of the owners of Valley Greens, the first dispensary to open in Peekskill, told the Peekskill Herald he doesn’t see GSCC’s  proposed microbusiness as direct competition.

“I haven’t thought through the effects it could have on the Peekskill climate, but I can’t see, at least initially, that causing any direct problems for Valley Greens,” Jackson said. “If anything it’s someone to partner with and provide some Peekskill-grown products to our customers.”

Valley Greens was recently named Best Dispensary in Westchester  in Westchester Magazine’s July issue, a new category for the magazine’s annual Best of Westchester honors. Asked how business has been at the dispensary, Jackson said,“We’ve been picking up month over month and things are going very well. We’re very optimistic for the future. Sales have been picking up. We’re getting our business out there and people have a positive response to it.”