A Summary on Cannabis Licenses in New York
At the end of March, New York legalized adult-use marijuana, opening up a new, lucrative market for cannabis entrepreneurs and businesses.
When the state was limited to medical marijuana the only type of cannabis license issued was a vertically integrated grower/dispensary license, but with the new recreational market, the state plans a two-tier structure similar to what’s found in the alcohol industry.
What types of cannabis licenses are available?
Applicants can seek a cannabis license for cultivation and processing or for distribution/retail. Retail applicants will also be limited to direct or indirect ownership in three retail outlets. In general, vertical integration will be prohibited.
For companies that already hold a vertically-integrated medical license there will be an exception allowing them to remain vertically integrated on the adult-use side as well. This year there will be no delivery licenses issued, requiring all cultivators to sell adult-use products through a licensed dispensary.
The New York marijuana law establishes the Office of Cannabis Management (OCM). It will be governed by a five-person Cannabis Control Board, appointed by the governor. The OCM will be responsible for setting the number of licenses, the process to obtain a license and the details for the social equity license program.
Included in New York’s adult-use marijuana program is one of the most robust social equity programs in the country, calling for 50 percent of the licenses issued to be allocated for social equity applicants.
Who Can Apply Under the Social Equity Cannabis Program?
The social and economic equity program in New York is designed to help people disproportionally impacted by cannabis enforcement, as well as minority or woman owned businesses, distressed farmers or disabled veterans have access to the lucrative licenses.
Additional preference will be given to applicants who fall under these categories:
- Member of a community disproportionately impacted by the prior enforcement of cannabis prohibition.
- Have an income lower than 80 percent of the median income in the county, in which they reside or was convicted of a marijuana offense, or had a close family member convicted.
The social equity program is still in development and could include a reduce or deferred licensing fee, access to incubator and workforce development programs and no, or low interest business loans.
In addition to developing the cannabis license program, the OCM is charged with determining the types of products that will be available for sale, advertising and marketing guidelines and labeling rules.