The emerging adult-use cannabis market in New York looks much different than it did when licensed sales began on Dec. 29, 2022.

Three years ago, there were no approved cannabis stores in the Rochester area. It took until midway through 2023 to get a single licensed store here. By early 2024, there were only two.

Today, there are 25 in Monroe County alone.

In 2024, the nonprofit cannabis advocacy group BLOOM ROC was only a few months old. The group had just started its incubator program to support founders for licensing, compliance, and sustainable growth.

Now, BLOOM ROC is receiving a year-end community award from state Sen. Jeremy Cooney for its work in the field.

“Since their program first launched, BLOOM ROC has been leading the way in creating opportunities for those who have been historically impacted by the failed War on Drugs,” Cooney said at the award ceremony on Wednesday. “I’m proud to honor them for their boots-on-the-ground work in helping to make New York’s cannabis marketplace one of equity, inclusion, and opportunity.”

“We’re really proud of this and what it means,” says Precious Brown, president of BLOOM ROC. “Not only is it something that honors the work we have done, but it also shows that that work is meaningful.”

Along with the growth of the cannabis market in New York, there have been challenges, some of which continue even after a messy rollout period seems to have settled. A persistent black market, changes by federal and state lawmakers, and lobbying against the industry are concerns voiced locally in the cannabis industry.

Still, advocates and retailers see vast potential for the industry.

“We have to be relentless in our pursuit and we have to be bold in our actions,” Brown says.

Birth of an industry

Recreational adult-use cannabis was legalized in March 2021, with business licenses first issued late the following year. The initial license rollout was criticized by early entrepreneurs, many of whom faced long wait times to receive their license while they paid rent for their retail space.

The first round of approved licensees for the Finger Lakes region was in June 2023. Ryan Martin, the owner of MJ Dispensary, which was the first approved retail space for cannabis in Monroe County, recalls that difficult period.

“We were waiting and waiting and waiting through it all,” he says. “Just like, ‘Will we ever be able to open?’”

To date, the Office of Cannabis Management, which regulates the industry in New York, has issued 535 retail licenses across the state, with 42 in the Finger Lakes region. Of the 25 in Monroe County, the city of Rochester has the most locations with 13, followed by Henrietta with 6.

“There is still tons and tons of room to grow,” says Tanner Hay, a manager at Finger Lakes Cannabis Co., located in Victor. “There are still dispensaries popping up left and right, which is great. There’s room for everybody.”

Of the currently held retail licenses, 32 are social and economic equity applicants, with most of them (26) in the category of minority-owned or woman-owned. In addition, four licenses are held by “distressed farmers,” two by service-disabled veterans and one by an “individual from a community disproportionately impacted by the enforcement of cannabis prohibition.”

SEE goals were added to the Marihuana Regulation and Taxation Act to incentivize participation in the new industry by individuals disproportionally impacted when cannabis possession and use was illegal.

The goal set for SEE is to award 50 percent of all adult-use licenses to the five distinct categories. Across New York, OCM has continued to achieve that goal, with SEE businesses accounting for 57 percent as of November, most of those being retail dispensaries. (In comparison, Michigan, which also has a social equity program for legalized adult-use cannabis, only had a 6.8 percent participation rate as of October.)

“I’m happy with what we have, but we have to do a better job at making sure that we have a thriving, diverse, legal market where education, technical education, and business development is at the forefront,” says Brown.

BLOOM ROC has supported 39 individuals interested in the cannabis industry as part of its second incubator cohort. Seven of those are “tier one,” meaning they are close to launching their own business or applying for a license.

In addition to retail operations, the Finger Lakes region also has 109 licensees for cultivation, processing, or distribution of adult-use cannabis.

Among them is Nabis, a cannabis wholesale purchasing platform and distributor that expanded its operations from California and Nevada to New York this summer. The company predicts employee growth from 15 to 50 at its Rochester warehouse in 2026 and has ambitions of serving as much as 20 percent of New York’s market.

The field of agriculture has also been a focus for the Finger Lakes. The cultivation and research of hemp, both industrial and cannabinoid, was permitted in the state in 2015. By 2020, New York farmers were rivaling the hemp output of Oregon, which has been involved in cultivation since 1997.

In 2019, Cornell University received $500,000 to establish the nation’s only industrial hemp seed bank and Finger Lakes Community College began a cannabis biology and cultivation track in its horticulture program.

Economic impact

After the slow start, total cannabis sales since legalization have surged, surpassing $2 billion in September.

Monthly retail sales reached a record high this year in August, when they totaled $214.4 million. That number topped the August monthly total of more established markets in Colorado, Oregon, Illinois, and Massachusetts.

Tax revenue from retail sales has jumped from $42.3 million in fiscal year 2024 to $161.8 million in 2025. Gov. Kathy Hochul’s 2026 budget projects another large leap, to $248 million.

Revenues collected from cannabis sales are split among the Community Grants Reinvestment Fund, which is intended to help communities disproportionately impacted by past drug law enforcement; the Drug Treatment and Public Education fund; and the state lottery fund (for education purposes).

An additional 4 percent excise tax is collected on sales and split between the municipal and county governments.

Retail growth

After finally receiving a license, MJ Dispensary quickly found success, Martin says. The business competed early on with another retail space in Henrietta, RISE Dispensary, a corporate multistate operation with locations in 15 other states.

“It’s like a David-and-Goliath story, in my opinion. Being right down the street, on the same road, we were able to outpace billionaires; that’s pretty impressive,” Martin remarks. “We’re still rocking in the top sales percentile in the whole state of New York. We’re one of the top dogs somehow, right up there with the big dispensaries in Long Island or Manhattan.”

Martin, who recently opened another MJ Dispensary, in Spencerport, attributes this growth to his store’s focus on customer service. MJ Dispensary’s “budtenders” are welcoming and knowledgeable, particularly to cannabis-product newcomers, a substantial portion of his customers.

“We’re very dedicated to our customer service and helping people figure out the dos and don’ts when they come in because everyone has questions,” he says. “It’s not like you’re going to your dealer and getting only one choice. You come into my store and there are a thousand choices.”

Hay says he’s had a similar experience with Finger Lakes Cannabis Co.’s customer base. For example, many are older people returning to cannabis use since its legalization in the state.

“Maybe they’re coming back after 20, 30 years. Now they can feel safe because they’re using tested products. It’s not just a guy you’re meeting on a corner to get (weed),” he says. “And we’re fully recreational here, but a lot of customers use it for sleep or as a pain relief too.”

The ‘legacy’ market

For all its early success, the fledgling New York market still faces challenges. Among them is the continuing prevalence of illicit cannabis sales.

Exact details on the illegal market are difficult to obtain, but a 2023 report by New York City’s Independent Budget Office examined the issue in the five boroughs. The report estimated there were 1,500 unlicensed smoke shops in New York City representing an estimated $484 million worth of cannabis products.

Enforcement by OCM has been the main approach by Hochul with this issue. Her 2026 budget includes an additional $5 million to the agency for hiring more personnel to crack down on unlicensed sales. OCM says it has conducted 2,000 inspections and seized $125 million in illicit cannabis to date.

Locally, an unlicensed smoke shop in Henrietta was searched and shut down in May with an additional four in the Seneca Falls area forced to close in August.

“I was a legacy grower,” Martin says, using the term for cannabis cultivators who operated in the underground market before legalization. “But I wanted to do things legally, so I went through the process to do things the right way. So, it’s frustrating to see (illegal sellers) after all that.”

Unlicensed products—which have not been tested for contaminants and whose processing methods are unknown—pose a safety risk, OCM, BLOOM ROC, and local retailers agree.

“It does, in a weird way, show how popular (cannabis) is and how much it could still grow,” Hay says, citing a silver lining he sees in the popularity of the illegal market.

Brown agrees, saying more public education could be an antidote to this issue. She says when BLOOM ROC’s outreach teams connect with legacy growers, they are sometimes not aware the sale of cannabis has been legalized or confused about the true meaning of the law.

She also says the amount of work to transition to legal sales can be daunting, which is why BLOOM ROC keeps its cohort sizes small.

“You have to meet people where they’re at first of all,” Brown says. “We realize everyone’s standard operating procedure is going to be different. We want to be sure that we can customize things for you, it’s not a cookie-cutter approach.”

A shifting legal landscape

A looming change at the federal level also has clouded the industry’s outlook. The Trump administration’s spending bill that ended the government shutdown included a provision establishing strict new limits on THC content in consumable hemp-derived products such as beverages, snacks, gummies, vapes, and topical creams.

The measure is scheduled to take effect in November 2026.

Proponents say this measure will close a loophole in a 2018 farm bill that allows makers of these products to undercut taxed, regulated products while selling them through gas stations or convenience stores. Critics say it could devastate the $24 billion hemp industry and leave companies scrambling to offload products before the new regulation begins.

Brown says she views the measure as an “assault on a plant” that could have “vast implications” for the New York market.

“Truthfully, I go both ways with that one because in one sense, it really stinks that that is happening because there are tons of businesses and people who make a living from it. So, for it to be banned stinks if it is going to put people out of business,” says Hay.

“Another way I see it, it’s also a good thing. A lot of the hemp-derived products, they don’t have to go through the New York State testing so you don’t really know what is in it,” he adds. “So, I’m glad in that sense that everything will have to be tested.”

Cannabis growth, possession, and trafficking are still crimes under federal law. However, rumors persist that the Trump administration is considering reclassifying cannabis from a Schedule I to Schedule III drug. Under that classification, which includes drugs such as anabolic steroids or ketamine, it would be acceptable to use in medical treatment. Before President Joe Biden left office, this reclassification idea was being considered by his administration as well.

At the state level, OCM altered its proximity rules for retail stores following an internal audit this summer. The audit found that a discrepancy in measurement practice meant that over 152 licensees and applicants were located too close to schools when re-measured.

Two adult-use cannabis stores in Monroe County, Good Life Collective and Pure Wellness Dispensary, were impacted by this revision. 

“Both didn’t go through BLOOM ROC. And I will say, if they were in our cohort, we would have caught it,” Brown says.

OCM first directed stores to move, offering up to $250,000 from the state for some affected businesses. Then, the agency used a court order to instead allow for the continuation of the old measurement until Feb. 15, 2026. The agency says it will look for a permanent solution with the governor and state Legislature.

Also in Albany, an attempt to rework the state’s adult-use tax and excise tax policy continues. Cannabis cultivators and processors in the current system pay the excise tax quarterly, resulting in scenarios where they owe taxes before the product is sold to consumers.

Nabis, along with Jaunty, a distillate, resin, and rosin producer, and several other cannabis companies has championed altering this policy based on previous experiences in other state markets. A Cooney-sponsored bill that would extend the period has passed the Assembly and Senate and reached Hochul’s desk. She has yet to sign it, however, and it is uncertain whether she will do so before the Dec. 31 deadline. If not, a new bill will have to be submitted and approved by the Legislature.

Industry outlook

Looking ahead, local retailers also see the established alcohol and tobacco industries as a potential threat.

“For sure they’re messing with cannabis,” Martin says. “More people are doing (cannabis) now, less people are drinking alcohol. They’ll always do whatever’s in their power to nip it in the bud, pun intended.”

Indeed, Gallup polling from August suggests that drinking is at an all-time low, with the percentage of U.S. adults saying they consume alcohol falling to 54 percent. Fueling this trend are negative impressions of health effects from drinking. In the Gallup survey, 53 percent responded that drinking in moderation is bad for your health, the highest number in at least two decades. 

The exact impact and scope of alcohol and tobacco lobby groups’ efforts in New York is uncertain, but mainstream culture already sees cannabis as controversial.

“There’s still definitely that stigma around cannabis. And I get it, smoking can be bad for you, there are health concerns to be aware of, so on and so on,” Hay says. “But, maybe this is just me, I would way rather be locked in a room with 50 people who were using cannabis as opposed to 50 people who are using alcohol.

“But it does feel like there’s a change that is happening and a greater acceptance of cannabis on a cultural level,” he adds.

Hay’s upbeat outlook for the local cannabis industry is largely shared by his peers. BLOOM ROC’s plans for 2026 include plans to try to sway municipalities that originally opted out of allowing adult-use cannabis sales, such as Greece.

“They’re the largest suburban municipality and they’ve opted out. We really want to spend time with them and go over the benefits of receiving that tax revenue,” Brown says. “The residents obviously want this to happen. They’ve had multiple businesses that have been put up as storefronts that have been illicit shops.”

BLOOM ROC also wants to fight the perceived stigma through continuing education, workshops, and events. For example, Brown envisions relaxed get-together meals that also feature cannabis, throwing out the names “Green Supper Clubs” or “Bud and Breakfast” as possibilities.

She hopes such efforts can increase inclusivity and welcome more people to the plant, perhaps eventually having cannabis-and-coffee shops like those popular in Europe.

“It’s like we’re coming out of the 1920s prohibition of alcohol. It’s going to take some time, we have to have some grace here,” Brown says. “But you know we aren’t going to give up. We’re cocky, we’re stubborn, we’re New Yorkers.”

Jacob Schermerhorn is a Rochester Beacon contributing writer and data journalist.

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