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What is a Processor in New York's Cannabis Market?
Adult-use cannabis processor licenses authorize different levels of acquisition, possession, extraction, blending, infusion, packaging, and labeling of cannabis products. There are three (3) processor license types and each one authorizes different activities. In short, processors produce cannabis products in accordance with their license type and the necessary Good Manufacturing Practices (GMP) to be sold and distributed to retail dispensaries. Every product batch must undergo testing by an independent, third-party laboratory authorized by the Cannabis Control Board (the “CCB”).
The cannabis processor license is also sometimes referred to as a cannabis manufacturing or a processing/manufacturing license. This license class has an extensive list of broad activities that are pemitted within it. Processors will often purchase bulk flower and may conduct drying, trimming, milling, and packaging of dried flower but are also allowed to perform physical or chemical extraction of cannabinoids (name THC) from biomass. Further, they are permitted to use sell and market concetrated, extract products such as oil, hash, rosin, kief, diamonds, sauce, and shatter – in container or in vape carts or pens. They may also infuse other goods, such as beverages, edibles products (brownies, gummies, cookies, etc..), topicals and bath bombs. A processor license allows for the packaging and labelling of the above mentioned products.
Processors are allowed to hold a cutlviation and/or a distribution license but cannot own or have or hold any interest in retail dispensaries, delivery services, or on-site consumption lounges. That is processors may hold the license that allows for them to grow and cultivate their own biomass, to process it and to distribute and wholesale these products to retails. Based on New York’s two tier system, processors fall on the production side and may not sell or deliver products directly to consumers.
Things to Consider Before Applying:
1. All license holders must be aged 21 or above.
2. Applicants must not be disqualified from obtaining a license under the Cannabis Law or regulations due to prior non-cannabis-related convictions as outlined in Section 137 of New York State cannabis adult-use regulations or True Parties of Interest (TPI) prohibitions.
3. You must not have any disqualifying criminal convictions, which include:
– Any business-related felony conviction within the last five years, such as fraud, money laundering, forgery, and similar offenses.
– Any felony conviction involving controlled substances and minors within the past five years. 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 includes selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor.
4. For branding purposes only, applicants must disclose a location that they own or lease for the registered business. Businesses engaged in packaging and labeling cannabis products will require facilities meeting Good Manufacturing Practices (GMP) certification standards.
5. A business plan is required.
6. You must provide a driver’s license or another form of identification.
7. Be aware of product standards, safety, and compliance requirements.
8. Understand and hold all required information and documentation for your application and business.
New York Cannabis Processor License Types & Permitted Activities
Type 1 Cannabis Processor License (Type I)
The Type 1 processor license is a plant-touching license that allows the holder to engage in extraction, blending and infusion, while being able to package, label and brand their products. Cannabis extracts are created using solvents that separate cannabinoids and terpenes from the flower. The result of this process is the foundation of many products that are widely enjoyed among consumers. Cannabis extracts are required in products such as live resin, shatter, wax THC distillate and many other products of similar nature. Extracts are also used in edible cannabis products through infusing or blending the extract into a consumable product.
Type 2 Cannabis Processor License (Type II)
The Type 2 processor license is a plant-touching license that allows the holder to infuse and blend cannabis products, while being able to package, label, and brand cannabis products. In other words, Type 2 processors can acquire extracts from Type 1 processors and infuse or blend them into consumable items, like edibles, beverages, tinctures, pre-rolls containing extract, and many other products.
Type 3 Cannabis Processor License (Type III)
The Type 3 processor license can be both plant-touching or non-plant-touching depending on the activities the license holder engages in. Type 3 processors can only package, label, and brand cannabis products that have already been produced by a Type 1 or Type 2 processor. This license is great for businesses that do not want to be responsible for the creation of the cannabis product. Instead, Type 3 processors can do any combination of white labelling with their branding, and packaging, and applying other brands’ labels to cannabis products. Type 3 license holders that will be doing nothing other than having their branding placed on already produced and packaged cannabis products must register their business’ location, but they do not need to have a GMP-certified facility. The packaging and labelling of previously unpackaged and unlabeled cannabis products need to have a GMP-certified facility.
What are the Facility Requirements?
Each type of processor license has different facility requirements. To be sure your facility will be suitable for application location requirements and pass GMP audits, consult with CannDelta today!
GMPs consist of sections including details about management commitment, risk management, quality management systems, product controls, and staff training.
If you plan on becoming a Type 1 processor that will be engaging in extraction, having the proper equipment and safety standards are important for both regulatory compliance and the health and safety of those working in the facility. Extraction facilities will need to have proper ventilation in appropriate locations, and alarms that can spot leaks of CO2, butane, and all other gasses that are harmful to humans. Proper employee training and personal protective equipment will need to be provided as well.
Type 1 or Type 2 processors that will be blending and infusing cannabis into consumable products need to meet health and safety requirements and have the appropriate equipment to undergo this process. This requires suitable kitchen appliances to cook and blend cannabis or cannabis extract into the product that will be made for consumption.
Working with CannDelta’s cannabis consultants is the best way to ensure you’ll past inspections and audits by meeting all the required standards for your processing facility.
Type 3 processors participating solely in branding cannabis products do not need a GMP facility.
What's the Cost of a Processor License in New York?
Processor License application fees are as follows:
$1000 adult-use application fee for every application submitted.
Type 1 processor license holders must pay a fee of $7000 per processing premises.
Type 2 processor license holders must pay a fee of $4000 per processing premises.
Type 3 processors license holders must pay a fee of $ 2000 per processing premises. Type 3 processors participating in white labeling only are only required to this fee once since they do not require a GMP premises.
If you qualify as a social and economic equity applicant, you might qualify for a 50% reduction, waiver, or deferred fee, supporting social equity in the industry.
Partner with CannDelta for Cannabis Consulting in New York
At CannDelta, our New York cannabis consultants support entrepreneurs as they navigate the intricate process of establishing a cannabis business. We achieve this by maintaining in-depth knowledge of the New York licensing process, municipalities, and regulatory commissions.
CannDelta has successfully launched numerous cannabis businesses in New York, including retail dispensaries, cultivation facilities, testing and research facilities, and more. Here’s why our expertise is vital to your business’ success:
- Proven Track Record: The CannDelta team offers premier cannabis consulting in New York with a history of driving success for cannabis businesses, offering unrivalled industry-specific knowledge and practical experience.
- Cost and Time Efficiency: Our services help clients save significant amounts of money and time by guiding them around common pitfalls that could lead to unnecessary expenses and delays.
- Expertise in Regulatory Navigation: Navigating complex regulations can be daunting, but our team excels in steering businesses through these complexities, ensuring compliance and operational smoothness.
- Customized Business Strategies: We provide tailored solutions to align with the unique needs and circumstances of each client, ensuring the best possible outcomes.
- Risk Management: With ongoing support, we help identify and mitigate potential risks to secure the long-term prosperity of your cannabis cultivation business.
What is a New York Adult-use Cannabis Processing License?
A cannabis processing license in New York gives the licensee the ability to engage in processing activities as authorized by the processor license type.
What Can I do With a Processing License in New York?
Processor license holders can engage in a variety of different activities depending on the type of licenses held. In short, Type 3 processors can do any combination of packaging, labeling, and branding of cannabis products. Type 2 processors can do everything a Type 3 processor can do, with the addition of extracting and infusing cannabis into consumable cannabis products. Type 1 processors can do everything Type 2 and Type 3 processors can do, with the edition of extraction.
Who Needs a Cannabis Processing License in New York?
New York processor licenses are for anyone meeting the eligibility and legal requirements who wants to begin a processing company that engages in any of the authorized activities as determined by the processor license type. International businesses and multi-state operators may be interested in Type 3 processor licenses for white-labeling purposes and the development of a New York cannabis brand.
Can a Cannabis Processor License Also Open a Retail Dispensary in New York?
No. New York’s two tier system forbids any entity on the production side to hold interest in a cannabis retial dispensary in New York.
Can a Licensed Cannabis Processor Process Cannabis for a Cannabis Microbusiness in New York?
Yes. A cannabis processor in the state of New York is permitted to process (package/manufacture) cannabis and cananbis products for an adult-use cannabis microbusiness license holder.
I want to Launch a Cananbis Brand in New York, do I need a Cannabis Processor License to do so?
Yes. Unless your preferred or contracted co-manufacturer captures your current brand’s officers, directors, and officers under their True Parties of Interest (TPI) disclosures, you are required to apply for a Type 3 processor license.
Can Cannabis Cultivators Package their Own Dried Flower and Pre-rolls?
Yes, cultivators that hold a Type 3 cannabis processor license may also package, and sell their cannabis products directly to retailers.
