Housing Works, a New York City-based nonprofit that runs a chain of thrift shops, will launch sales at a 4,400-square-foot Manhattan dispensary at 1 Astor Place, Governor Kathy Hochul said on Wednesday. All proceeds will be directed to the nonprofit. The charity, which provides services to people who were formerly incarcerated and those living with HIV or AIDS, is one of three dozen groups and individuals awarded the state’s first retail licenses last month.

“Their decades of work with marginalized communities make them a perfect partner in the effort to ensure that New York’s cannabis market provides meaningful opportunities to those most impacted by the failed cannabis criminalization policies of the past,” said State Senator Liz Krueger in a statement.

The launch represents more than just what could be the world’s second-largest legal marijuana market outside of California’s, but a stab at getting regulations right where other states have failed. New York has taken a novel approach that aims to include African Americans — disproportionately arrested for marijuana in the past — in the legal industry. It’s also pledged to separate suppliers from retailers in a so-called two-tier system, in order to try and create a lot of “mom-and-pop” small businesses. 

Retail licenses were granted to people who have a cannabis conviction and organizations that provide services to people who were harmed by past drug enforcement. There are plans to let those licensees do delivery by bike and scooter. New York has also given out licenses to 280 farmers to grow the first adult-use cannabis in the state.

A growing tide of illicit sellers have opened storefronts to make inroads with customers who don’t know the difference between their cheaper — but sometimes tainted products — and licensed, contaminant-tested weed. The state passed legislation in 2019 to decriminalize marijuana and has since loosened restrictions on purchase and consumption of cannabis. However, it took months to formulate regulations and grant licenses, leading to the proliferation of illegal storefronts that popped up across the state. 

Now, regulators and law enforcement are trying to rein in the $2 billion market in illegal sales by providing support to licensed sellers. Measures so far include a verification tool that will be posted in the window of licensed sellers, and a universal symbol on each product to show it meets standards set by the state.

“We are eager to take the lead as a social equity model for America’s cannabis industry, specifically with our hiring practices and continued support of individuals and communities disproportionately impacted by the unjust war on drugs,” said Sasha Nutgent, store manager of Housing Works Cannabis Co., in a statement.