Cannabis License Applications

Estimated time until the OCM Cannabis applications open to the public in the State of New York is less than 90 days.

On December 14th, 2022, the New York State Cannabis Control Board released proposed regulations for the implementation of the Marijuana Regulation and Taxation Act of New York in the state register. The comment period for the proposed reguations ended on February 13th, 2023 at 11:59 pm New York Time (EDT). 

The Cannabis Control Board (CCB) received 903 applications for the Conditional Adult-Use Retail Dispensary in the summer of 2022, and awarding 66 total licenses in late into 2022 and early 2023. This has allowed the first cannabis retail store (or dispensary) to open before the end of 2022, which was selling New York first regulated and tested cannabis products. New York’s implementation of conditional cannabis licenses will assist the state in catching up with its neighbors in the Tri-state area, New Jersey and Connecticut, and has allowed recreational cannabis (non-medical or adult-use cannabis).

There are only a few existing medical dispensary licenses in the state and applications are currently not being accepted for medical or adult-use dispensaries. Further, existing medical cannabis dispensary license holders are not prioritized for conditional licenses.

New York’s Conditional Adult-Use Retail Dispensary (CAURD) licenses are temporary licenses only available for “justice-involved” applicants in the first round of applicants for cannabis retail (dispensary) licensure. To be considered “justice-involved” the applicant must have a cannabis-related offense or have an immediate family member with a cannabis-related offense, who have experience owning and operating a profitable business. 

Conditional licenses are valid for four (4) years from the date of license issuance by the OCM. License holders may apply to convert their “Conditional Adult-Use Retail Dispensary License” to a standard, “Adult-Use Dispensary License” prior to its expiration. License holders would be required to enter a labor peace agreement with a bona fide labor organization. Note, this is not to be confused with the State of New Jersey. New Jersey’s conditional licenses are meant to allow people to obtain adult-use cannabis licenses without large amounts of capital pre-application.

Anyone. In the first round of licensure, the adult-use (non-medical/recreational) dispensary (cannabis retail) licensing process is designed to favor those that have a past conviction of a cannabis offense or have a close relationship with someone who has been charged and convicted with a cannabis-related offense. We refer to this as “justice-involved” individuals.

Applicants will also need to prove that they have had at least 10% ownership in a profitable business for at least two years.

Residency Requirement

A majority of the ownership of the applying company/entity must have been in New York State for 180 days within the last year, or 540 days within the last three years.

Conviction Requirements

The applicant, of if the applicant was dependent to must have been convicted of a cannabis-related offense in New York State at any time prior to 3/31/2021.

Business Requirements

You need to have held at least 10% ownership for two years in a business that had at least two years of net profit.

Or if you’ve owned at least part of a non-profit, a non-profit that has all the following:

• Have people with marijuana convictions in New York on its board or as its officers
• Has at least two years of positive net assets or profit
• Has at least 5 full-time employees
• Serves individuals and communities with high rates of cannabis-related arrests and convictions
• Has a history of creating work for people with marijuana convictions

Ownership Percentages

The entity with sole control of the applying business and at least 30% of the ownership interest must meet the residency requirement AND the conviction and for-profit business requirement OR the non-profit business requirement.

In addition, at least 51% of the applying business’s ownership interest must 1) meet residency requirement AND the conviction and for-profit business requirement OR the non-profit business requirement or 2) the conviction requirement.

You were eligible for a Conditional Adult-Use Retail Dispensary license if you are an applicant (a business or entity) that satisfies the following:

• Majority-owned company by “justice-involved” individuals;
• The applicant consists of individuals that have had at least a 10% ownership stake for at least two years in a business that had a net profit;
• Are New York residents if applying as an individual, or have a principal corporate location within New York or be organized under the laws of New York if applying as an entity.

Alternatively, applicants can be:

• Non-profits that serve “justice-involved” individuals and communities that managed a social enterprise with at least two years of positive net assets;
• Have a history of creating opportunities for “justice-involved” individuals;
• Have “justice-involved” individuals on its board or as officers;
• Have five or more full-time employees.

CannDelta has successfully helped acheive CAURD Licencses from the Office of Cannabis Management (the “OCM”).
It is believed that the OCM will continue to prioritize applications that are classified with a social equity component as the application process opens up in Summer 2023.

The costs per license application is $2,000 (non-refundable) and each license allows for the opening of a single location. Each operator may hold a maximum of three licenses and operators cannot be vertically integrated i.e. it’s not possible to cultivate, process or manufacture, and distribute, etc.v

To be eligible for an Adult-Use Conditional Cultivator License an applicant must meet all of the following:

1. Have been authorized to grow hemp under the Department of Agriculture and Markets Industrial Hemp Research Pilot Program.
2. Be in good standing with the Department of Agriculture and Markets.
3. Have been authorized by the Department of Agriculture and Markets to grow cannabinoid or “CBD hemp” as opposed to growing hemp for grain or fiber.
4. Have grown and harvested cannabinoid or “CBD hemp” for two of the past four years (between 2018 – 2021) and be able to provide the Office with proof documenting such activities.
5. Hold at least 51% or more ownership in the entity that held the industrial hemp grower authorization from the Department of Agriculture and Markets.

To open a dispensary or a consumption lounge in the state of New York, you’ll need the following:

1. A lease or proof of title or ownership of a site
2. No more than three (3) Adult-Use on-site consumption licenses per individual investor.
3. No vertical integration permitted – individual investors cannot be an Adult-Use Cannabis Cultivator and own a Consumption Lounge in the State of New York.
4. Respected set back distances – there is prohibition of consumption licence within 500 feet (ft) of a school.
5. A detailed and well-crafted application package submitted by the Applicant.

License application and regulatory fees vary depending on the license you are seeking. The minimum application fee for any license in New York is $1,000.

In terms of total overall costs, please contact our office so we can learn more about your goals, your situation and provide with you an accurate estimate of how much it will cost to open a cannabis business in New York.

There a 280 conditional adult-use cultivators and 39 condtional adult-use cannabis manufacturers so far. 

New York has now provisionally approved 165 Conditional Adult-Use Cannabis Retail Dispensary (CAURD) Licenses that have been issued.

Currently there are 15 open cannabis retailers statewide and over 40 in development. Over 250 licenses have been approved across the state, with 21 percent of New Yorkers now living in a city with legal cannabis access.

OCM also reported that New York legal cannabis sales so far this year total $22.6 million.

The NYS Office of Cannabis Management (OCM) is responsible for issuing licenses for businesses to participate in New York’s adult-use, medical, and cannabinoid hemp industries. They are in the process of establishing regulations on how individuals or businesses can apply for and obtain these licenses. However, it’s important to note that acquiring such a license can be time-consuming and may incur significant costs if not handled correctly. Therefore, it’s highly recommended to seek professional assistance to navigate through this process.

Since March 31st, 2021, the use of cannabis has been legalized for adults aged 21 and above in New York, which also hosts a medical cannabis program. Keep in mind that applications for cannabis business licenses could open any day now.

Yes, but there are stipulations!

While New York state has legalized adult-use cannabis, including home cultivation under the Marijuana Regulation and Taxation Act (MRTA Bill S854A) signed in March 2021, there are restrictions in place. Until the Office of Cannabis Management is fully operational, adults are required to wait, with an estimated 18-month wait for adults and a 6-month wait for registered medical patients. Detailed regulations are still under development.

However, what’s confirmed is that adults aged 21 and over can grow up to 3 immature and 3 mature cannabis plants each, with a household cap at 6 mature and 6 immature plants. Moreover, up to 5 lbs of cannabis can be securely stored at home, while possession elsewhere is limited to 3 ounces or less. Complete prohibition of home cultivation is not allowed by any county, town, city, or village.

Individuals aged 21 and above are permitted to purchase recreational cannabis from a licensed dispensary. Moreover, both adults and minors diagnosed with an eligible medical condition can partake in the Medicinal Cannabis Program.

CBD products, as hemp derivatives according to the 2018 Federal Farm Bill, come under the regulation of the U.S. Food and Drug Administration (FDA) and must comply with the Federal Food, Drug and Cosmetic Act. The legality of selling CBD products hinges on the intended use of the product, its labeling, and other factors. 

Sale of Cannabis and Cannabis products is prohibited in any other establishment like, a smoke shop or a convenience store in most states. The only exception is Saskatchewan, Canada where some existing establishments were allowed to sell Cannabis.