Cannabis Licensing Updates for NY

On September 12, 2023, The New York Cannabis Control Board voted to finalize the Office of Cannabis Management’s proposed regulations for recreational cannabis [1, 2]. Starting October 4, 20203 cultivator, processor, distributor, microbusiness, and retail dispensary licenses can be applied for. As of March 21, 2021, cannabis for adult use has been legal in New York but exists in a “gray market.” This means the cannabis products being sold in bodegas and shops originate on the black market but have not been illegal for adults to use- a nuanced difference between being legitimately legal and licensed to sell and produce.

Moving forward, growers, processors, and retailers will need to obtain a license and comply with regulations. The state will likely face a challenging transition where it will need to crack down on those who have been selling black-market cannabis without licensure. The new Adult-Use Cannabis Regulation Package details the six main aspects of New York’s Adult-Use Cannabis Program [1]:

  1. Application and license selection and process
  2. Regulatory role of municipalities
  3. Social and economic equity program provisions
  4. Environmental and sustainability standards for cannabis cultivation, processing, and manufacturing
  5. Provisions for ownership and true party of interest
  6. General business operating requirements such as security, worker health and safety standards, inventory tracking, record keeping, and transportation

The new regulations establish eight types of New York cannabis licenses [1, 2]. They include plant nurseries, cultivators, processors, cooperatives, distributors, dispensaries, delivery services, and microbusinesses. Microbusinesses will be allowed to grow, process, and sell their own cannabis products on a small scale. To prevent individual entities from dominating the market, companies and individuals can only obtain either a supply-related license or a retail-related license, but not both.

This applies to financial investors as well [2]. They are permitted to have a stake in multiple licenses, but they must choose either supply or retail. If they hold a stake in an entity in another state, that must also be in the same category. Equity and social provisions also aim to keep the New York recreational cannabis market competitive and give special consideration to individuals disproportionately impacted by anti-marijuana enforcement, minority and women-owned businesses, distressed farmers, and service-disabled veterans.

When it comes to New York medical marijuana companies that are already licensed, they will be allowed to switch to a recreational license as a retailer or wholesaler [2]. Medical marijuana businesses, like microbusinesses, will be allowed to grow, manufacture, and sell cannabis products. For the 300+ growers and processors with existing conditional licenses, they will also be allowed to transition to the new non-conditional licenses.

The New York Adult-Use Cannabis License application window will be open for 60 days starting on October 4, 2023 [1, 2]. Application and licensing fees range from $750 to $300,000. The full details and applications are available from https://cannabis.ny.gov/adult-use. There is also information about allowances for individuals who want to grow their own cannabis. While there are caps on the number of licenses, The New York Times estimates that the state will need up to 2,000 dispensaries to accommodate consumer demand.

References

  1. New York State Significantly Expands Cannabis Market with Final Approval of Adult-Use Regulations. (2023). Cannabis.ny.gov https://cannabis.ny.gov/system/files/documents/2023/09/new-york-state-significantly-expands-cannabis-market.pdf
  2. Southall, A. (2023). Expecting Cannabis Boom, New York Lays Down the Rules. The New York Times (Digital Edition), NA-NA.

https://go.gale.com/ps/i.do?id=GALE%7CA765236286&sid=googleScholar&v=2.1&it=r&linkaccess=abs&issn=15538095&p=AONE&sw=w

Sabine Downer
Author: Sabine Downer