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A court order last week to indefinitely pause New York’s Conditional Adult-Use Retail Dispensary program sent shockwaves through the state’s legal cannabis industry –and not for the first time.
The latest injunction comes on the heels of another that led to a months-long slow-down of parts of the CAURD program, which occurred amid a crisis for cultivators who collectively spent millions to plant and harvest a marijuana crop last year, only to realize that there were few retail stores where they could sell their products.
And now, some CAURD licensees are wondering if they’ll be able to open at all.
Earlier this month, prior to Judge Kevin Bryant’s injunction halting the CAURD program, NY Cannabis Insider conducted an informal mental health survey for people engaged in the state’s cannabis industry. The results – from nearly 70 respondents – show a notable decline in mental health, with these professionals saying their stress has increased tremendously as their business outlook looks increasingly dire.
“My stress and anxiety levels have skyrocketed in relation to having to restructure how we’ve entered the market and how we’re proceeding moving forward,” one respondent, a cannabis cultivator, said.
Launching a legal cannabis company is a risky affair at best, but licensed New York cannabis business owners and workers have spent more than a year adjusting to new regulations, out-of-the-blue announcements and predictable lawsuits that have periodically shut down large parts of the industry.
As a result, mental health around the Empire State’s legal weed sector appears to be deteriorating.
“Sometimes people do not talk about that part of their industry: of being overwhelmed,” said Sarita Ford, a social worker and therapist in Baltimore, who specializes in work-related mental health issues. “It definitely can affect business owners – long term and short term – if you’re stressed and you’re under a lot of pressure.”
A graph based on NY Cannabis Insider’s survey (n=69) of people involved in the state’s cannabis industry. Images created using ChatGPT Code Interpreter.
A stressful environment
The Office of Cannabis Management and Cannabis Control Board started issuing conditional cultivation and processing licenses in the middle of last year, under the premise that plenty of dispensaries would be ready to open by the time these companies harvested their crops or stood up a processing operation.
The early 2022 legislation that created the Adult-Use Conditional Cultivation and Adult-Use Conditional Processing licenses was driven by the need to speed up the establishment of the adult-use cannabis market. Advocates for provisional licensing also said at the time that it was necessary to ensure dispensaries would have products to sell.
Around the time the CCB began licensing CAURD businesses later that year, Gov. Kathy Hochul pledged that at least 20 retailers would open by the end of 2022, with about 20 per month opening after that.
But nearly a year later, only 17 brick-and-mortar dispensaries are open state-wide.
As the CCB began issuing CAURD licenses, Variscite NY One, Inc., a Michigan-based plaintiff, sued the state over its alleged violation of the U.S. Dormant Commerce Clause. The judge in that case placed an injunction preventing regulators from granting CAURD licenses in five regions – but later narrowed the injunction to only apply to the Finger Lakes region. The state settled that case in late May.
Several plaintiffs have filed suit since then, including the recent case brought by four service-disabled veterans and, later, joined by a coalition that includes many of New York’s medical cannabis Registered Organizations.
If the situation looked bleak before the most recent lawsuit, it only looks more dismal today, according to the survey.
A graph based on NY Cannabis Insider’s survey (n=69) of people involved in the state’s cannabis industry. Images created using ChatGPT Code Interpreter.
Survey results
When asked to rate their mental health on a scale from 1 to 10 (1 being poor, 10 being excellent), about 43% of 69 respondents to the survey ranked their mental health in 2022 between 1 and 5.
When the same respondents were asked to rank their mental health in 2023 on a scale of 1 to 10, that percentage grew to 61%.
The survey respondents included cannabis stakeholders ranging from conditional licensees to ancillary service providers to cannabis advocates. Many of them also commented anonymously about how their mental health has shifted amid New York’s legal weed rollout.
Some respondents cited specific actions state regulators have taken as having a negative impact on their mental health.
“The main cause for my deterioration in mental state is due to the accelerated acceptance of RO’s into the market coupled with continual lawsuits that plague and slow down the opening of the market for small business owners,” said a respondent who referred to himself as a “service provider.”
Others said they invested time and resources into an industry they were told would be up and running by now, and feel duped.
“I feel like I was misled and have been seriously financially affected,” said a respondent who described himself as a CAURD applicant.
Those who initially scored above a 5 in 2022 showed the biggest decline in mental health year-over-year, with the average scores reported by this group in 2023 dropping by around 23%.
A minority of respondents said changes in the industry from last year to this year improved their mental health, citing events that have improved their business prospects.
“With the Variscite NY One, Inc. lawsuit injunction lifted and licensing for the Brooklyn region commenced my mental health and attitude changed dramatically dire to being extremely positive,” a CAURD licensee respondent said.
However, as previously said, the survey concluded before the most recent injunction.
Mental health effects
Work-related stress can lead to a host of physical and mental issues, said Ford, the Baltimore therapist and social worker. In the short-term, consistent stress can cause headaches, loss of sleep, stomach problems, and anxiety. In the long-term, work-related stress can manifest physically as back pain, muscle issues, and clinical depression.
These problems can become more acute if left untreated, and that’s doubly true for small business and startup owners, since many glorify a “hustle culture” which calls for complete commitment to work, said Ford.
“I definitely think hustle culture plays a part … in feeling like you have to have it together, you have to be perfect,” Ford said. “Sometimes anxiety can look like perfection.”
Ford said the pressure entrepreneurs feel is often compounded when they have employees whose livelihoods depend on the company succeeding. This can become a barrier for entrepreneurs to seek mental health care, since they ignore mental health concerns as they internally catastrophize the idea of failure, Ford said.
It’s important for family, friends, and colleagues of small business owners and employees to recognize signs of serious mental breakdown, such as drastic changes to their mood and/or appearance, giving away many of their personal items and talking about wanting to join friends and relatives who’ve died, Ford said. But well before these flashing warning signs, it’s key for these people to prioritize their mental health.
Ford, whose clients include small business and startup owners, said therapeutic options exist even for people with busy, unpredictable schedules. For example, she often sees clients remotely via Psychology Today’s telehealth platform. There are also smartphone apps like Calm, in addition to resources listed by the U.S. Center for Disease Control and Prevention, and the Small Business Administration.
A key piece of advice Ford has for New York cannabis business owners, employees and stakeholders is to not ignore work-related stress, or discount the negative effects it can have on all aspects of life.
“The effects of it can be huge: personally, professionally, and for relationships,” Ford said. “It affects your productivity, how many hours of sleep you may get, all those different things.”