201901.22
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Or asked another way, What Types of Cannabis Businesses Can I Have in New York?

Under Governor Cuomo’s proposed New York’s “Cannabis Regulation and Taxation Act” (as released in January 2019, the Cannabis Law), there are plenty of new business opportunities in the New York cannabusiness space, most of which will need to be licensed by the State Office of Cannabis Management (the “CannaCzar”) within the Division of Alcoholic Beverage Control.

The proposed (the bill has yet to be voted upon and the rules have yet to be written) Cannabis Law imposes many restrictions on each cannabis-related license as well as regarding cross-ownership as between the various cannabis-related licensees (for example, with the exception of the prior 10 medical marijuana licensees, vertically integrated cannabusinesses are for the most part prohibited).

It is best to discuss your proposed business with a NY Canna Business Lawyer.

Here is a list of identified licenses (but the CannaCzar may license other activities as well (or the enacted law may differ):

Adult-use cultivator license — for the acquisition, possession, cultivation and sale of cannabis from the licensed premises of the adult-use cultivator by such licensee to “duly licensed processors.”  A cultivator can apply for one processor and one distributor license.

Adult-use processor license — the acquisition, possession, processing and sale of cannabis from the licensed premises of the adult-use cultivator by such licensee to “duly licensed distributors.”  Processors must purchase cannabis from cultivators and can sell cannabis to distributors only. A processor licensee can have up to three processor licenses.

Adult-use cooperative license — the acquisition, possession, cultivation, processing and sale from the licensed premises of the adult-use cooperative by such licensee to duly licensed distributors and/or retail dispensaries; but not directly to cannabis consumers.

Adult-use distributor license — the acquisition, possession, distribution and sale of cannabis from the licensed premises of a licensed adult-use processor, microbusiness cultivator, or registered organization authorized to sell adult-use cannabis, to duly licensed retail dispensaries.  A distributor licensee may not have any economic interest in any retail dispensary license (no vertical integration (except for grand-fathered Registered Organizations)).

Adult-use retail dispensary license — the acquisition, possession and sale of cannabis from the licensed premises of the retail dispensary by such licensee to cannabis consumers.  No person may have a financial or controlling interest in more than three retail dispensary licenses. This restriction, however, does not prohibit Registered Organizations (the pre-existing licensed medical marijuana licensees) from obtaining adult-use retail dispensary licenses at locations previously registered and in operation as of April 1, 2019. Under the current medical marijuana regulations, Registered Organizations can have up to 4 medical dispensary locations.  A retail dispensary would not be permitted to sell more than one ounce of cannabis per consumer per day, nor more than 5 grams of cannabis concentrate per consumer per day.

On-site consumption license — Adult-use retail dispensaries (provided the location would qualify for alcohol sales) can apply to have an on-site license (which cannot sell more than 1 gram of cannabis to a consumer for on-site consumption).

Note, MBE, WBE, Disadvantaged Farmers and Incubators all are given special consideration.  The law is drafted to favor small business and give special consideration to license applications by minority-owned, women-owned businesses and disadvantaged farmers; or made under the newly announced incubator program.

The law also anticipates issuing special permits for other cannabis-related activities.  The rules and regulations for these permits have yet to be released.

  1. Industrial cannabis permit to purchase cannabis for use in the manufacture and sale of any of the following, when such cannabis is not suitable for consumption purposes, namely: (a) apparel, energy, paper, and tools; (b) scientific, chemical, mechanical and industrial products; or (c) any other industrial use as determined by the CannaCzar.
  2. Nursery permit to produce clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis, and to sell such to licensed adult-use cultivators, registered organizations, and certified patients or their designated caregivers.
  3. Solicitor’s permit to offer for sale or to solicit orders for the sale of any cannabis products, medical cannabis and/or hemp cannabis, as a representative of a registered organization or licensee governed by the CannaCzar.
  4. Broker’s permit to act as a broker in the purchase and sale of cannabis products, medical cannabis and/or hemp cannabis for a fee or commission, for or on behalf of a person authorized to cultivate, process, distribute or dispense cannabis products, medical cannabis or hemp cannabis within New York.
  5. Trucking permit to allow for the trucking or transportation of cannabis products, medical cannabis or hemp cannabis by a person other than a registered organization or licensee governed by the CannaCzar.
  6. Warehouse permit to allow for the storage of cannabis, cannabis products, medical cannabis or hemp cannabis at a location not otherwise registered or licensed by the office.
  7. Delivery permit to authorize licensed adult-use cannabis dispensaries to deliver adult-use cannabis and cannabis products directly to cannabis consumers.
  8. Cannabinoid permit to sell cannabinoid products derived from hemp cannabis for off-premises consumption.
  9. Temporary retail cannabis permit to authorize the retail sale of adult-use cannabis to cannabis consumers, for a limited purpose or duration.
  10. Caterer’s permit to authorize the service of cannabis products at a function, occasion or event in a hotel, restaurant, club, ballroom or other premises, which shall authorize within the hours fixed by the CannaCzar, during which cannabis may lawfully be sold or served on the premises in which such function, occasion or event is held.
  11. Packaging permit to authorize a licensed cannabis distributor to sort, package, label and bundle cannabis products from one or more registered organizations or licensed processors, on the premises of the licensed cannabis distributor or at a warehouse for which a permit has been issued by the CannaCzar.
  12. Miscellaneous permits to purchase, receive or sell cannabis, cannabis products or medical cannabis, or receipts, certificates, contracts or other documents pertaining to cannabis, cannabis products, or medical cannabis, in cases not expressly provided for by the law, when in the judgment of the CannaCzar it would be appropriate and consistent with the policy and purpose of the law.

The rules and regulations promulgated by the CannaCzar will govern license requirements and other licensing matters.  The Cannabis Law has yet to be voted upon by the NY legislature and promulgated into rules.  Coincidentally, the proposed law’s enactment is slated to take effect on the first of April 2020 (yes folks, “4/20” — government can have a sense of humor)!

It is best to discuss your proposed business with a NY Canna Business Lawyer.  Please feel free to contact us if we can be of any assistance or answer any questions.

**This post is for informational purposes only, For legal advice, contact a Canna Business Lawyer**

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