New York Cannabis Microbusiness License

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A microbusiness cannabis license allows for craft or small-batch cultivators to own and operate an adult-use cannabis retail dispensary within 25 miles of their cultivation facility if they are licensed in a municipality with less than 1M in population

Understanding the New York’s Cannabis Microbusiness License under the Office of Cannabis Management: Section 73 Explained

Author: Dr. Lucas C. McCann, CSO & Co-founder, CannDelta Inc.

With the Office of Cannabis Management is predicted to open the public portal for cannabis license applications as early as September 23rd, 2023 many are curious to learn if the cannabis microbusiness would be the right option for them to consider. New York’s legal cannabis industry continues to expand with an increased crackdown on the grey-market stores operating illicitly, many prospective applicants are keen to learn all that is required to apply for these new cannabis licenses opening in Fall 2023. To support smaller operations, there is a unique opportunity known as the ‘Microbusiness License’. For prospective applicants, specifically, Section 73 provides clear regulations on these smaller businesses may operate in the New York Cannabis framework. A Microbusiness License authorizes limited cultivation, processing, distribution, delivery, and dispensing of a license holder’s own adult-use cannabis and related products.

This means that the license holder can handle every step of the cannabis lifecycle, from seed to sale in what is largely a two-tier system based on the alcohol model that prevents vertical integration of business. Much as in the beer and wine industry in New York State, the entities involved in the production, manufacture, and distribution of cannabis are otherwise prohibited from being involved in the sale or licensing of cannabis retail dispensaries. Like craft beer, the New York Cannabis Microbusiness license allows for (and requires) vertical integration from production to sale.
However, Section 73 also establishes certain restrictions for microbusiness licensees. They are not allowed to have any direct or indirect interest in any other license mentioned in this section. This rule maintains the ‘micro’ in ‘microbusiness’, by ensuring these firms only distribute their own cannabis and cannabis products to their dispensary. Furthermore, the specifics regarding the size, scope, and eligibility for obtaining a microbusiness license are determined to be less than 3,500 sq. ft. of cannabis cultivation space. This regulatory measure is designed to promote social and economic equity in the cannabis industry, encouraging a diverse range of applicants. The microbusiness operators may not hold an interest in any other license type in New York, as the name suggests, there’s a ceiling on how much you can grow. If an operator outgrows the microlicense, there is the possibility to divest from either tier of the business to just focus either the production or the retail stream should that be required/
The cannabis microbusiness license does offer some flexibility in its requirement to become vertically integrated: the cannabis processing. The microbusiness license holder may leverage the services of cannabis processors or manufacturers to produce a wider range of products than they normally might be able to produce themselves. This can be advantageous for those that are low on space and can’t accommodate bulky extraction equipment, beverage and canning lines, kitchens, or long packaging lines for primary packaging. This is allowed under the proposed cannabis regulations for New York State.
The New York Cannabis Microbusiness provides a clear regulatory framework for craft cannabis cultivators looking to venture into the cannabis industry, providing opportunities and limitations. As the sector continues to evolve, these regulations will play a vital role in shaping a sustainable, equitable, and competitive cannabis industry
Section 73 – Microbusiness license
1. A microbusiness license shall authorize the limited cultivation, processing, distribution, delivery, and dispensing of their own adult-use cannabis and cannabis products.
2. A microbusiness licensee may not hold any direct or indirect interest in any other license in this chapter and may only distribute its own cannabis and cannabis products to dispensaries.
3. The size, scope and eligibility criteria of a microbusiness shall be determined in regulation by the board in consultation with the executive director and the chief equity officer. The granting of such licenses shall promote social and economic equity applicants, as provided for in this chapter.

If you have questions about the microbusiness license, you’d like to apply or learn more about any of the other cannabis licenses available in New York, call us at 1 (877) 274-6777 and speak to a New York Cannabis Consultant today!

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