On March 10, 2022, the New York State Cannabis Control Board released proposed regulations for conditional adult-use retail dispensaries. The Cannabis Control Board (CCB) indicated that they expect to begin accepting retail (dispensary) applications as early as the summer of 2022, and to award licenses in late summer or early fall of 2022. This will allow cannabis retail stores (or dispensaries) to open before the end of 2022.

New York’s implementation of conditional cannabis licenses will likely assist the state to catch up with their neighbors in the Tri-state area, New Jersey and Connecticut, and allow recreational cannabis (non-medical or adult-use cannabis) to be sold before the end of 2022.

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 will not be 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 involve” the applicant must have 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 are 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.

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.

Cannabis Control Board (CCB)

Issues/inspects/revokes licenses, registrations, permits
Limits/halts number of licenses
Approves social equity plans

Office of Cannabis Management (OCM)

Issues/inspects/revokes licenses, registrations, permits
Limits/halts number of licenses
Approves social equity plans

State Cannabis Advisory Board

Advises and recommends cannabis use of all types
Governs and administers Reinvestment Funds

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.

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.