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How to Start Your own Cannabis Brand in New York in 2024: Type 3 Processor License Snapshot

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Wondering How you can Build a Cannabis Business in New York in 2024?

Whether you’re looking to build a business from scratch or shift your already established business into New York’s cannabis space, here’s what you’ll want to keep in mind.

  1. What licenses and certifications will I need?

     

  2. Do I meet eligibility requirements?

     

  3. How much will it cost to get started?

     

  4. Do I have an existing business plan, or will I need to create one?

     

  5. What is the application process?

     

  6. What happens if my submission gets accepted and what happens if it doesn’t?

     

It’s no secret that starting a cannabis business in New York means navigating through a variety of roadblocks, expenses, and long waiting periods. But the same isn’t necessarily true for people interested in having a cannabis brand within New York’s Cannabis Market. Here’s how New York’s Type 3 Processor license is innovating the cannabis landscape and creating opportunities for brands to thrive in a growing industry.

A cannabis brand is a company that sells cannabis products that are distinguished by things like name, logo and other factors that are unique to the company’s branding. Having a cannabis brand in New York has never been more possible than it will be in 2024. If you’re wondering how you can start a successful cannabis brand as a New York resident, multi-state operator, or business owner from anywhere else, getting a Type 3 Processor license should be on the top of your to-do list. 

Your Guide to New York's Type 3 Processor License

The New York Office of Cannabis Management (OCM) will begin receiving Type 3 processor license applications on a continuous basis. The OCM will announce the precise opening date for the application window at least 30 days before the application period begins. This is a landmark moment for all New York cannabis processors that want to establish their brand and build a base of loyal customers by becoming one of New York’s original licensed cannabis products.

Even though the OCM will be awarding an unlimited number of Type 3 cannabis license applications, getting a license as soon as possible will be a huge advantage for Type 3 processors that want to stand out in New York’s rapidly growing cannabis market. This opportunity is also extremely valuable for both young and established Canadian cannabis businesses and multi-state operators (MSOs) that want to grow their brand by expanding into a young and prospering market. This is reinforced by the New York City Independent Budget Office’s forecast, which predicts that the cannabis market in New York City alone will experience a significant surge, reaching $950 million in annual taxable sales by the fiscal year 2027.[i]. With that in mind, here’s everything you need to know about the Type 3 processor license in New York.

The image of a shop with the name "Cannabis Business in New York"

What is a Processor License in New York?

The OCM uses a three-tiered approach to processor licensing, with each tier allowing and/or restricting different functions of cannabis processing.

Type 1 and Type 2 processor license holders can package, label and brand their own cannabis products without a Type 3 License. However having a Type 1 or Type 2 license allows the processor to engage in other processing activities that those holding only a Type 3 license cannot. More specifically, Type 1 processors can extract, and Type 2 processors can infuse and blend cannabis products. Type 3 Licenses allow the holder to package, label, and brand cannabis products, but do not allow for extracting, blending, and infusing.   

Initially, there was uncertainty of whether processing businesses needed to apply for Type 3 licenses and the application process itself. OCM previously indicated that applicants needed site control, leading to assumptions that only in-state operating companies needed to apply. However, OCM clarified that businesses must apply for Type 3 licenses solely for branding or white labeling purposes, without the need for formal site control. However, Type 3 processors that will be packaging, labeling, and subsequently handling cannabis need to apply with a suitable facility location.

In short, the Type 3 License gives the license holder the ability to brand, package and label products that have already been produced, and have them sold in New York dispensaries.

  • Those looking to acquire a Type 3 license solely for branding purposes do not need a specific facility for cannabis processing, but instead must submit the location where your business is or will be registered.
  • Those looking to acquire a Type 3 License for packaging and labeling purposes need to have an appropriate facility location.

What are the Application Requirements?

Eligibility:

  • All license holders must be 21 years of age or older.

  • Applicants must not be disqualified from holding a license under the Cannabis Law or regulations because of prior non-cannabis related convictions as noted in Section 137 of New York State cannabis adult-use regulations or True Parties of Interest (TPI) prohibitions.

  • You must not have any disqualifying criminal convictions. These include:
    • Any business related felony conviction from the last five years like fraud, money laundering, forgery and offenses of similar nature.
    • Any felony conviction within the past 5 years involving controlled substances and minors. This encompasses activities such as hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling any controlled substances to a minor. Additionally, it involves selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor.

  • For branding purposes only, applicants must disclose a location that they own or lease from which the business will be registered. Businesses that will be packaging and labeling cannabis products will need facilities that meet Good Manufacturing Practices (GMP) certification standards.

  • You need a business plan.

  • You need to provide a driver’s license or another form of identification.

Are There Product and Packaging Standards?

Cannabis product packaging must feature one of the three universal symbols displayed below. The square symbol must be at least 1.25 inches in height, the vertical symbol must be 0.5 inch in width, and the horizontal symbol must be 0.5 inch in height. To ensure visibility, the symbol must be printed on—or outlined with—a contrasting color.

The signs about Cannabis and OCM on a page about New York's Type 3 Processor License
The signs related to Cannabis on a page on "How To Build a Cannabis Business in New York"
Three vertical signs

Every brand must be associated with a licensed processor, which may be authorized for full-scale cannabis product manufacturing or limited activities. The licensee and their employees are solely responsible for all cannabis product processing, and contractors are not permitted to engage in processing activities. Learn more about product packaging standards by clicking the button below.

What Expenses are Tied to Type 3 Applications?

  • Fees depend on processor license types and the activities applied for. However, each adult-use application has an attached fee of $1,000 regardless of type.

  • Type 3 Processor applications include the $1,000 non-refundable application fee and another $2,000 before they are issued to successful applicants.

  • Qualified social and economic equity (SEE) applicants will receive a 50% discount on all application and license fees.

  • All licenses are valid for two years from date of issuance before requiring renewal.

Advantage of Working with CannDelta

CannDelta is New York’s leading cannabis consulting service, with a proven track record of successfully helping clients get past roadblocks.

We empower businesses all over North America by guiding them to success in New York’s evolving cannabis scene. We offer robust application support, strategic site selection, competitive strategies and much more.

New York’s cannabis sector is swiftly evolving. With CannDelta’s guidance and expertise, entrepreneurs and existing businesses can excel in New York’s dynamic market. Learn more about starting a cannabis business on our website or reach out to our toll-free number below.

There are three types of processor licenses in New York, each granting businesses the ability to legally conduct different processing activities. Type 1 allows for extraction, Type 2 allows for infusion and blending, and Type 3 allows for packaging, labeling and branding of cannabis products.

Getting a processing license in New York has requirements that vary between types. In general, those applying for processor licenses should be able to know about and provide the following:

The Office of Cannabis Management (OCM) in New York grants licenses based on applicants’ ability to adhere to state regulations. Essential components for successful applications include ownership details, organizational structure documents, financial disclosures, an organizational chart, floor and site plans, facility visuals, operating plans, community impact plans, environmental plans, and the application fee. Additionally, factors such as ownership structure, team experience, moral character, and financial viability are crucial considerations. To maximize chances of success, applicants should aim for high scores on their applications. Given the competitive nature of acquiring a New York cannabis license, consulting services are available to provide guidance throughout the application process, with a track record of over 300 successful cannabis business launches.