Southampton’s Main Street has the type of stores you’d expect for a place where homes routinely sell for over $5 million: One can pop into Veronica Beard for a $350 pair of skinny-flare jeans, snap up some art at Hauser & Wirth and then grab a $9 cappuccino at Sant Ambroeus.
If Kim Stetz gets her way, you’ll also be able to pick up some weed — legally — on your way to the beach.
“Hell yeah, we want to have a place in the Hamptons,” said Stetz, a psychotherapist who received one of 40 available dispensary licenses on Long Island and is looking to establish a cannabis shop in Southampton with her partner, chef Marquis Hayes. “[Long Island] was my first choice.”
Setting up one of the only weed stores in Long Island — and in Southampton no less — could be a gold mine for those lucky enough to hold a license. But it’s not going to be easy.
When New York state legalized cannabis two years ago, it gave municipalities the choice to opt out of allowing dispensaries in their jurisdictions. In Long Island, 85% of municipalities opted out, leaving just four towns outside of New York City — Babylon, Brookhaven, Riverhead and Southampton — plus a few villages that said yes to dispensaries.
In those places, space is severely limited by zoning restrictions, reluctant landlords and a dearth of financing. So far, not a single legal store has opened on the island.
“Long Island is one of the narrowest locations because of all of the opt-outs,” said Elizabeth Kase, a Long Island-based cannabis attorney. “If I’m one of those lucky 40 companies to have gotten one of those first golden tickets, where am I opening my store?”
The Hamptons, and Southampton specifically, is a particularly enticing spot — the ultra-affluent enclave, where at least two mansions are for sale for more than $100 million, is a second-home locale for Wall Street, but also a party destination in the summer.
With the help of a realtor, Stetz says her team has been combing the Hamptons for a storefront since February. While they’ve had luck identifying a small industrial space to house a delivery service, they haven’t been able to find a retail location for their dispensary-slash-consumption lounge, which they believe will fit right in with the Southampton aesthetic.
“We plan on offering high-end services to the people who live there and to the tourists,” said Stetz. “We’re going to have private dinners. It’s about a whole lifestyle.” Stetz said that Hayes wants to serve food infused with cannabis — “It’s a chef’s dream.”
‘Slow Process’
The hurdles facing Long Island’s retail cannabis industry reflect the slow development of the industry statewide. Just five dispensaries are open across New York two years after marijuana was legalized — three of them near Greenwich Village in Manhattan. With names like Union Square Travel Agency and Housing Works Cannabis Co., they sell everything from THC-infused dark chocolate bars to low-dose, pineapple-mango-flavored sparkling water.
On Long Island, a “disproportionate number of small towns and villages” opted out, said Axel Bernabe, chief of staff at the state’s Office of Cannabis Management.
That means it’s likely to remain a relative cannabis desert as other regions see a gradual rollout.
Even in those municipalities that chose to allow dispensaries, landlords are reluctant to rent space to cannabis businesses because of the perceived financial risk, as well as the stigma that the newly legal industry still carries. James Adames, a license holder who’s looking for locations in Southampton and elsewhere on the island, said he’s faced a series of rejections so far.
“I’ve been getting a lot of no’s because they don’t support cannabis. More than I can count on two hands,” said Adames, owner of Kushmart NY.
Long Island’s quirky tiered municipal setup, in which villages sit within towns, also masks the reality of just how little area will be available for dispensaries.
Some villages, like Oyster Bay Cove, 35 miles east of Manhattan, didn’t go through the process in 2021 to opt out of allowing dispensaries, although the surrounding town of Oyster Bay did. But Oyster Bay Cove won’t see any cannabis retailers: It simply has no commercial zoning. This is the case in the majority of municipalities that didn’t opt out.
In the remaining towns, each has established its own set of regulations dictating where the shops can be. The local rules go further than the state’s proposed guidelines, whose purpose is to keep dispensaries away from schools, houses of worship and each other, to avoid a high concentration of weed businesses in one area.
The Southampton rules would preclude the shops from downtown areas, so visitors won’t find a dispensary nestled among the luxe cafes and designer baby-clothes shops, but rather along highways or in shopping centers. In Babylon, dispensaries will be relegated to industrial zones. Brookhaven cannabis stores must not be within 500 feet of any residential buildings.
“Trying to find real estate that meets the setback requirements and is commercially viable, it’s been a little bit of a slow process,” said Siobhan Brady, part-owner of Natural Wonders Cannabis, another Long Island retail licensee. “We were hoping that we could open by the summer but it looks like it’s going to be a little later.”
The state’s cannabis agency predicts communities will loosen their regulations this summer when the statewide zoning regulations, which are less restrictive, are expected to be officially adopted. It’s also hopeful that some of the Long Island municipalities that initially opted out will eventually take advantage of a law that allows them to reverse the decision through a referendum.
“It doesn't need to happen overnight,” said Aaron Ghitelman, a spokesman for the Office of Cannabis Management. “New York has an incredible capacity and incredible appetite for cannabis. That doesn’t end at the eastern edge of Queens.”
Opposition
Underpinning the restrictiveness is a general wariness of cannabis. At a Southampton Town Board meeting on March 14, where dispensary zoning was up for discussion, town supervisor Jay Schneiderman had to emphasize that the legalization of cannabis was not on the agenda. “It is not a hearing on whether cannabis should be legal or not,” said Schneiderman. “We may not have all agreed on that, but that decision is behind us.”
At the same meeting, parents and education administrators implored the council to make the dispensary guidelines as restrictive as possible. “I do have a lot of concerns about dispensaries close to downtowns. I do fear edibles and so on getting into the hands of some of the young people in town,” said town board member Rick Martel. To dispensary owners he said, “I am leaning on you 150% to abide by all the rules, protect our children.”
The cautiousness goes beyond “this is your brain on drugs” rhetoric. Because marijuana is illegal at the federal level, traditional banks cannot serve the industry. This makes it difficult to get business loans, set up cashless payment in stores, and even pay employees.
Without the backing of most banks, business owners must turn to private funding. But investors are staying away from New York companies for the moment because unlicensed cannabis sellers have come to “dominate” the space, said Matt Hawkins, co-founder of cannabis venture firm Entourage Effect Capital. “The thousands of illicit shops are effectively putting hardworking license owners out of business before they start,” he said.
Without additional funding, business owners are stuck — especially since landlords are wary of renting space to weed shops. “Everyone wants a $10,000 deposit, or once they know it’s for cannabis [the rent] is tripled,” said Stetz, who’s still hunting for a space in Southampton. “We don’t have the rollout yet because we have no money.”