Only 24 new retailers can be licensed under the 2022 law that legalized recreational cannabis, making it highly competitive.

Because it took so long to start accepting applications, the existing medical marijuana dispensaries got a significant head start, as the state allowed them to start selling recreational cannabis in December 2022. A maximum of 9 medical dispensaries are currently allowed.

The 7 dispensaries that are open now sold a combined $118 million in cannabis in 2024, and are on track to hit a similar number this year, according to state data. More than 83 percent of the sales are recreational.

The state plans to use a random lottery drawing to select the winners, after first doing a merit-based review to determine which applicants are qualified. A spokesperson did not have a rough timeline for when the lottery could take place.

Because the number of licenses is limited and there's no way to know when or if applications could reopen in the future, potential store owners have been gearing up for years, securing premises and lining up investors.

Towns and cities, which get a cut of the tax revenue if they host a store, have also been preparing. Providence changed its zoning rules last year to allow stores to open in commercial districts rather than just industrial zones, opening up more options for retailers.

Voters in six towns banned the sale of cannabis in the 2022 election. The other 33 allow it.

The 2022 legalization law, which also created the Cannabis Control Commission that oversees the industry, requires that the new retailers are spread out throughout the state in six geographic zones.

Four licenses will be allowed in each region, with at least one license for a social equity applicant, and one for a worker-owned cooperative.

Social equity applicants, who don't have to pay the $7,500 application fee, began submitting applications in late August. The Cannabis Control Commission will certify the social equity applicants in November, so those who don't qualify will still have time to apply for a regular license by the December deadline.

The social equity licenses are meant for people disproportionately affected by cannabis prohibition. That could mean the owner of the business was convicted of marijuana possession in the past, or lives in certain areas that were deemed to be disproportionately impacted, among other criteria.

The social equity program already had 89 applicants in the first two weeks, administrator Michelle Reddish said during a meeting of the Cannabis Control Commission last week.

Kim Ahern, the chair of the commission, said opening the application process "represents years of work, collaboration, and preparation to ensure Rhode Island has a cannabis marketplace that is safe, transparent, and equitable."

Potential retailers and the state's licensed cannabis growers -- who aren't allowed to supply retailers outside of Rhode Island -- have complained that it took far too long to start taking applications. McKee took a year to name his nominees for the three-member commission, which then had to come up with new rules and regulations for the recreational market, and formally take control of the program from the Department of Business Regulation.

In the meantime, consumers were able to grow and possess cannabis from the day it was legalized, and have been able to purchase recreationally at the medical dispensaries since December 2022.

That has led to a precipitous drop in the number of medical marijuana cardholders. There are now fewer than 8,000 active medical patients, compared to more than 19,000 before recreational use was legalized.

There is still a benefit to getting a medical card, for those who have qualifying conditions, as medical marijuana is taxed at a lower rate.

Separate from the recreational applications, there is a deadline this Thursday for applicants to open a medical marijuana dispensary in the northwest region of the state known as Zone 1, which includes Burrillville, Cumberland, Glocester, North Smithfield, Smithfield, and Woonsocket.

The applicant for that region that was selected from a lottery back in 2021, RMI Compassion Center, faced a lengthy legal battle with officials in Woonsocket and never actually opened.

There is one applicant so far to take its place: New Leaf Compassion Center, which is also proposing to open a dispensary in Woonsocket.

Want to sell cannabis? R.I. opens retail applications for first time since legalization - The Boston Globe