- New York’s integration of cash-on-delivery restrictions into Metrc on Sept. 15 has increased enforcement of existing payment rules.
- Retailers have 30 days from delivery to pay suppliers, with an additional seven days for suppliers to report overdue invoices.
- Retailers are shifting to smaller orders to manage cash flow, potentially sacrificing volume discounts and facing higher delivery costs.
- Distributor Nabis has lowered its order minimum to $1,000 across more than 50 brands, giving retailers greater purchasing flexibility.
Cannabis store owner Jayson Tantalo used to place $40,000 orders with a single supplier. Now, he splits them up and buys more often – and he’s telling other New York cannabis retailers to do the same.
Since Sept. 15, New York’s Office of Cannabis Management has used Metrc, the state’s track-and-trace system, to track overdue payments and enforce cash-on-delivery restrictions. The change is prompting retailers to rethink how they purchase inventory.
Cannabis retailers must pay suppliers within 30 days of delivery, and suppliers have an additional seven calendar days to report overdue payments. Retailers reported for delinquent payments are placed on the state’s cash-on-delivery list, which included 87 retailers owing a combined $3.9 million in September.
Through Metrc, suppliers cannot extend credit to retailers on the COD list, requiring those retailers to pay for new orders upon delivery until their outstanding debts are resolved.
For retailers in New York’s cannabis market, which generated $1.7 billion in sales in 2025, smaller, more frequent orders can help manage cash flow but also mean fewer volume discounts, higher delivery costs and thinner margins.
“It’s a volume game,” Tantalo, co-founder of Flower City Dispensary in Victor and vice president of the New York Cannabis Retail Association, told MJBizDaily. “The more you buy, the cheaper it gets.”
Why did OCM change the system?
The integration is intended to strengthen oversight of overdue payments and ensure existing payment rules are enforced consistently across New York’s cannabis industry.
It also aims to prevent suppliers from giving certain retailers preferential treatment, which is prohibited under state cannabis regulations, OCM Chief Operating Officer Patrick McKeage told MJBizDaily.
“If someone can get preferential treatment and terms from a distributor, that sets up an unfair market,” McKeage said. “This stops the side-deal relationships … to have a consistent approach to how these transactions are handled on the compliance side.”
Suppliers that fail to report overdue payments risk penalties, including having their licenses suspended or permanently revoked.
How are cannabis suppliers and retailers affected?
Eric Steenstra, a partner at Indigenous-owned cultivator and distributor Skyworld, said the rule ties suppliers’ hands.
Before the new rules went into effect, Skyworld contacted customers who were behind on their bills and worked out payment plans.
“I don’t know how they came up with seven days to notify, but it’s too short,” he said, noting that a mailed check can take 10 days to arrive. “That doesn’t leave a lot of flexibility, and past seven days, we have to report them.”
Osbert Orduña, CEO of The Cannabis Place, said the payment deadline also fails to account for how long products can sit on dispensary shelves. Products typically take 45 to 60 days to sell through, he said, meaning retailers might need to pay suppliers before generating enough revenue from that inventory.
“The help they need is not a COD list,” Orduña said. “That’s the final nail in the coffin for the New York cannabis industry.”
Orduña argued that regulators should focus on retailers who consistently fail to pay rather than impose restrictions that could affect businesses experiencing temporary payment issues.
He also cited payment issues beyond retailers’ control, including an incident in which $120,000 in checks mailed by his store were stolen and altered. It took 11 months to recover the funds, he said, adding that his business experiences misapplied payments 10 to 15 times a month.
How are distributors adapting to the payment rules?
Cannabis distributor Nabis is adjusting its ordering model to help New York retailers manage stricter payment terms while keeping products on shelves.
The company has eliminated minimum delivery fees on its marketplace, allowing retailers to meet a $1,000 order minimum across more than 50 brands rather than meeting individual brands’ minimums of $5,000 or more.
Higher order minimums helped distributors offset fixed delivery costs, including vehicle insurance that runs about $35,000 per vehicle, said Smrita Choubey, general manager of Nabis’ Northeast operations, which serves about 700 New York cannabis retailers.
Industrywide, invoices typically are paid 65 to 95 days after delivery, Choubey said.
“Asking an industry to pay in one month when they’re used to three – there’s going to be a sector of retailers that won’t have enough cash flow to keep products in their stores,” she said.
Nabis is also rolling out Nabis Connect, a tool that uses retailers’ point-of-sale data to generate editable draft orders.
Choubey said the company is already seeing smaller average orders and more retailers opting for COD terms. Nabis expects about a third of retailers to cycle on and off the COD list.
“The bet we’re taking is that it helps keep our brands on shelves,” she said.
Margaret Jackson can be reached at margaret.jackson@mjbizdaily.com.
