In March 2021, Governor Cuomo signed into law New York’s “Marijuana Regulation and Taxation Act” (the “MRTA”). The MRTA sets forth the new canna-business opportunities to be governed by the State Office of Cannabis Management (the “OCM”). The OCM will draft the rules regarding the licensing and operating of these businesses (which may not appear until mid- to late- 2022).
The 128-page MRTA (which rules have yet to be written as of the date of this post) defines each cannabis-related license, and sets forth base requirements of each license and ownership restrictions (including cross-ownership as between the various cannabis-related licensees (e.g., vertically integrated cannabusinesses are for the most part prohibited (with the exception of the prior 10 medical marijuana licensees)).
Here is a list of identified licenses (but the OCM may license other activities as well (or the promulgated rules may differ)):
Adult-use cultivator license — for the acquisition, possession, cultivation and sale of cannabis from the licensed premises of the adult-use cultivator by such licensee to “duly licensed processors.” A cultivator can apply for one processor and one distributor license.
Adult-use processor license — the acquisition, possession, processing and sale of cannabis from the licensed premises of the adult-use cultivator to “duly licensed processors or distributors.” An Adult-use processor licensee is one who extracts concentrated cannabis and/or compounds, blends, extracts, infuses, or otherwise manufactures concentrated cannabis or cannabis products (including cannabis edibles, bakery goods, beverages, oils, and tinctures).
Adult-use cooperative license — the acquisition, possession, cultivation, processing and sale from the licensed premises of the adult-use cooperative by such licensee to duly licensed distributors, on-site consumption sites, registered organization and/or retail dispensaries; but not directly to cannabis consumers.
Adult-use distributor license — the acquisition, possession, distribution and sale of cannabis from the licensed premises of a licensed adult-use cultivator, process- or, adult-use cooperative, microbusiness, or registered organization to sell adult-use cannabis, to duly licensed retail dispensaries and on-site consumption sites. Any distributor with a direct or indirect interest in a licensed cultivator or processor, shall only distribute cannabis or cannabis products cultivated and/or processed by such licensee.
Adult-use retail dispensary license — the acquisition, possession and sale of cannabis from the licensed premises of the retail dispensary by such licensee to cannabis consumers. No person may have a financial or controlling interest in more than three retail dispensary licenses. This restriction, however, does not prohibit Registered Organizations (the pre-existing licensed medical marijuana licensees) from obtaining adult-use retail dispensary licenses at locations previously registered and in operation as of April 1, 2019. Under the current medical marijuana regulations, Registered Organizations can have up to 4 medical dispensary locations.
Microbusiness license — the limited cultivation, processing, distribution, delivery, and dispensing of their own adult-use cannabis and cannabis products. The granting of such licenses shall promote social and economic equity applicants.
Delivery license — shall authorize the delivery of cannabis and cannabis products (independent of another adult-use cannabis license), provided that each delivery licensee may have a total of no more than 25 individuals, or the equivalent thereof, providing full-time paid delivery services to cannabis consumers per week under 1 license. No person may have a direct or indirect financial or controlling interest in more than one delivery license. The granting of such licenses shall promote social and economic equity applicants.
Nursery license — shall authorize the production, sale and distribution of clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis by licensed adult-use cultivators, cooperatives, microbusinesses or registered organizations. The granting of such licenses shall promote social and economic equity applicants.
On-site consumption license — a person can hold up to three on-site Adult-use on-site consumption licenses. No person holding an adult-use on-site consumption license may also hold an adult-use retail dispensary, cultivation, processor, microbusiness, cooperative or distributor license or be a registered as a registered organization.
SI/SE – under the MRTA, the OCM has a goal of awarding 50% of the licenses to social and economic equity applicants (these include minority business owners, women business owners, LGBTQIA+ business owners, those applicants having been disproportionately impacted by enforcement of marijuana laws (which are now legal), disadvantaged farmers or made under the newly announced incubator program, with the goal to provide business opportunities to those groups presently under-represented in business).
The law also anticipates issuing special permits for other cannabis-related activities. The rules and regulations for these permits have yet to be released.
Industrial cannabis permit to purchase cannabis for use in the manufacture and sale of any of the following, when such cannabis is not suitable for consumption purposes, namely: (a) apparel, energy, paper, and tools; (b) scientific, chemical, mechanical and industrial products; or (c) any other industrial use as determined by the OCM.
Trucking permit to allow for the trucking or transportation of cannabis products, medical cannabis or hemp cannabis by a person other than a registered organization or licensee.
Warehouse permit to allow for the storage of cannabis, cannabis products, medical cannabis or hemp cannabis at a location not otherwise registered or licensed by the office.
Packaging permit to authorize a licensed cannabis distributor to sort, package, label and bundle cannabis products from one or more registered organizations or licensed processors, on the premises of the licensed cannabis distributor or at a warehouse for which a permit has been issued.
It is best to discuss your proposed business with a NY Canna Business Lawyer. Please feel free to contact us if we can be of any assistance or answer any questions.
**This post is for informational purposes only, For legal advice, contact a Canna Business Lawyer**
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