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Overview
An adult-use distributor license allows for the distribution of wholesale cannabis and cannabis products to adult-use dispensaries in New York. This involves selling and transporting cannabis products to licensed adult-use retailers and on-site consumption lounges. Only cannabis products from New York licensed cultivators, processors, and/or microbusinesses can be sold and distributed.
Distributor license holders may also hold either a cultivator or processor license, but not all three at once. The distributor license does not authorize the sale or distribution of cannabis or cannabis products directly to consumers, and a distributor licensee cannot also hold a delivery license.
Authorized Activities
Distributor license holders can:
- Acquire cannabis products from licensed processors and microbusinesses.
- Sell cannabis products to a licensed retailer or adult use consumption lounge in New York.
- Cannabis distributors can store and transport wholesale cannabis and cannabis products for other licensed distributors.
- Distributors can deliver cannabis and cannabis products to other licensees in New York only.
Operational Requirements
Applicants must already have a pre-existing legal New York business to apply for a cannabis distribution license. Every New York distributor needs to follow specific operational requirements to comply to the OCM’s regulations. For every detail and specific requirement, refer to the OCM’s adult-use regulations.
- Cannabis product distribution and transportation must be secure and comply with the OCM’s packaging and labeling requirements. These products cannot be opened during transportation.
- Anyone transporting cannabis and cannabis products to a licensed dispensary or on-site consumption lounge must be an employee of the distributor and be 18 years-of-age or older.
- All cannabis and cannabis products must be transported so that they are not damaged in any way.
- Cannabis and cannabis products must be transported securely in a vehicle legally owned or leased by the distributor.
- Transportation vehicles need to have working temperature controls, a functioning lock box, container, or cage for temporary storage, and a functioning GPS system.
- Transportation vehicles cannot have any markings or indication that would make them identifiable as cannabis transportation vehicles.
- A distributor must provide the OCM with details about any motorized or non-motorized vehicles, including make, model, color, VIN, license plate, and registration, upon request.
- Distributor employees must be always contactable while making a delivery.
- Distributors must maintain their employee’s safety by only utilizing appropriate tools and personal protective equipment that are being used for their intended use.
Restrictions
- Distributors can only sell cannabis products to licensed retailers and on-site consumption lounges.
- Transportation cannot be made using any unmanned transportation method. This includes the use of drones and other remotely controlled devices.
Record Keeping, Reporting, & Security
New York licensed cannabis distributors will need to use an electronic inventory tracking system that’s been approved by the OCM to monitor cannabis inventory tracking in real-time. This system should be able to display the cannabis and cannabis products released to retailers and on-site consumption lounges and facilitate a complete recall if needed. Distributors will also need to do the following:
- Required to maintain all transaction records of cannabis and cannabis product distribution. The information that must be recorded includes the items sold, selling price, tax due, payment method, employee that completed the transaction, device used for the transaction, transaction number, date, and time of the transaction, and more.
- Cannabis Distributors need to maintain accurate records that indicate the costs of the business using legal accounting methods. All books must be held for at least five years and be made available to the OCM if requested.
- Cleaning and sanitation records must be compiled, maintained, and available upon request from the OCM. This includes pest management activities.
Shipping Manifests
Before transporting any cannabis products, the distributor must make a shipping manifest. It is the distributors responsibility to create and maintain accurate shipping manifests that are discrepancy free. The manifest must include:
- The name, physical address, lot number, and license number of the originating licensee.
- The name, physical address, lot number, and license number of the licensee receiving the shipment.
- The unique identifier numbers for each item being transported, the name of the product, weight of the products.
- Estimated date and time items are sent, and estimated time or arrival.
- Driver’s license number of the employee making the delivery.
- Vehicle information including make, model, and license plate number.
- Shipping manifests cannot be altered once a delivery is underway, or after they have been completed.
- Shipping manifests must be captured in the distributor’s cannabis inventory tracking system and made available to the OCM for at least five (5) years following the delivery.
Facility Requirements
When applying for a cannabis distribution license, applicants must submit proof of occupancy of a compliant location. This location must adhere to various standards that ensure the environment is safe and compliant. Distribution facilities must:
- Use the appropriate containers, tools, and equipment for the intended use.
- Floors, walls, and ceiling must be constructed so that they can easily be kept clean.
- Effective lighting, space for storage, and temperature monitoring.
- All required informational signage must be posted throughout the facility.
- Compliant workforce training must be provided to employees of a licensed distributor.
If you’re planning on applying for a cannabis distribution license, be sure to read and understand the OCM’s specific regulations and requirements for facility, location, and employee training requirements.
General Eligibility Requirements
All cannabis license applications in New York must be submitted online via the state government’s portal. Businesses applying for a distributor license in New York must provide comprehensive documents, including business formation documents, operational and security plans, among other information. Key application criteria include:
- Business owners on the license application should not be barred from holding a license under Cannabis Law or related regulations due to specific non-cannabis related convictions, as outlined in Section 137 of the New York State cannabis adult-use regulations or because of True Parties of Interest (TPI) restrictions.
Those on the application cannot have any disqualifying criminal convictions, including:
- Business-related felonies in the past five years, such as fraud, money laundering, forgery, and related crimes.
- Any felony involving controlled substances and minors in the last five years. This includes hiring minors for transport, sale, or distribution of controlled substances, as well as selling or providing controlled substances to minors.
Expenses
New York Adult-use distributor applications have a required fee of $1,000 for every application submission. There is an additional license fee of $7,000 for every operating premises that the distributor is licensed to have. This licensing fee is reduced by $2,500 if the distributor also holds a processor license.
Why Partner With CannDelta?
At CannDelta, our seasoned team of cannabis consultants in New York offers expert guidance to entrepreneurs launching cannabis enterprises. We possess deep insights into New York’s licensing procedures, local municipalities, and regulatory frameworks.
Our track record in New York includes setting up a variety of cannabis ventures, from retail outlets and cultivation sites to testing labs. Here’s why partnering with CannDelta can be pivotal for your business:
Proven Success: CannDelta’s consultants have a solid record of fostering growth for cannabis enterprises, delivering top-notch industry insights and hands-on advice.
Efficiency: We help our clients avoid common mistakes, saving them time and money, and accelerating their market entry.
Regulatory Mastery: Our expertise in navigating complex regulations ensures your business remains compliant and runs smoothly.
Tailored Strategies: We develop customized business plans to meet the specific needs and goals of each client, maximizing their success.
Risk Management: Our continuous support helps identify and address potential risks, safeguarding your business’s future.
Marketing Plans: Our marketing services give cannabis businesses a competitive edge in New York’s competitive cannabis market. We offer support packages and strategies from website development to detailed social media marketing.
Frequently Asked Questions
How do I get a Distribution License in New York?
Getting a distribution license in New York will require an adult-use distributor license. Getting this license will require a successful application resulting in a license being awarded to the applicant. The applicant must already have a pre-existing legal business to apply for a distribution license. Additionally, applicants will need to meet the general eligibility requirements and pay the application and licensing fees. If applicable, the applicant will need to be selected in a lottery drawing.
How do I Distribute Cannabis in New York?
To distribute cannabis in New York, you will need a distributor license. Distributors must follow all the regulated operational requirements in order to conduct distribution operations and transport cannabis. Distributors will have to comply with a variety of different regulations regarding things like inventory tracking and reporting, transportation vehicles, employee requirements. and more.
What are the Requirements to Apply for Distribution License in New York
Businesses seeking a distributor license in New York are required to submit a thorough set of documents, such as business formation papers, operational and security plans, among other details. Each individual on the license application will need to meet the eligibility requirements. The required fees include New York Adult-use distributor applications incur a $1,000 submission fee, plus a $7,000 license fee per operating premises.
