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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.
- What licenses and certifications will I need?
- Do I meet eligibility requirements?
- How much will it cost to get started?
- Do I have an existing business plan, or will I need to create one?
- What is the application process?
- 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.
What is a Processor License in New York?
New York’s Office of Cannabis Management (OCM) uses a three-tiered structure for processor licenses, each allowing different activities.
Type 1 and Type 2 Processor license holders can package, label, and brand their own cannabis products without needing a Type 3 License. Type 1 licensees are authorized to extract cannabis, while Type 2 licensees are permitted to infuse and blend cannabis products.
There are two avenues of the Type 3 license:
- Branding License: For businesses that only market and collect revenue from branded cannabis products produced by others. This license does not require a cannabis processing facility, but you must provide the address where your business is or will be registered.
- Packaging and Labeling License: For businesses that will physically package and label dried flower products. This license requires an appropriate facility location.
If you are collecting revenue based on branded cannabis product sales, or if you hold ownership in a brand being sold in New York dispensaries, you are required by state law to hold a Type 3 License.
Type 3 licensees are not able to extract, blend, or infuse cannabis products. Their activities are limited to packaging, labeling, and branding, depending on the kind of Type 3 license you have obtained.
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.Initially, there was confusion around whether all Type 3 applicants needed site control. OCM has since clarified:
- If applying only for branding purposes, no cannabis facility is required.
- If applying for packaging and labeling, a suitable cannabis processing facility is necessary.
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.
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.
Q: What is the adult-use processor license in New York?
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.
Q: How do I get a processing license in New York?
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.
