In March of this year the New York Cannabis Control Board (CCB), which oversees the Office of Cannabis Management (OCM), proposed a regulatory framework to create and oversee Conditional Adult-Use Retail Dispensary Licenses.
These licenses will be the first allowing retailers to sell recreational cannabis in New York, outside of tribal lands. However only certain individuals meeting a “justice-involved” standard will be eligible to apply.
OCM officials have said that the state will issue between 100 and 200 Conditional Adult-Use Retail Dispensary Licenses. Plans to release the licenses are currently slated for late 2022 or early 2023.
An “Eligible Applicant” is:
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An applicant that has:
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a) a significant presence in New York State, either individually or by having a principal corporate location in the state;
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b) is incorporated or otherwise organized in the state; or
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c) a majority of the owners are residents by being physically present in the state no less than 180 calendar days during the current year or 540 calendar days over the course of 3 years;
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An individual, or an entity with one or more individuals, where at least one individual:
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a) Is “Justice-Involved,” meanings individuals who were; or had a parent, legal guardian, child, spouse, or dependent who was; or were a dependent of an individual who was convicted of a marijuana-related offense in New York before March 31, 2021;
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b) Provides evidence of the primary residence of the Justice-Involved individual at the time of said individual’s arrest or conviction; and
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c) The Justice-Involved individual holds or held for at least two years at least 10% ownership and control of a business that had net profits for at least 2 years, or a qualifying nonprofit.
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A nonprofit that is: recognized as an entity pursuant to section 501(c)(3) of the Internal Revenue Code; intentionally serves Justice-Involved individuals and communities with historically high rates of arrest, conviction, incarceration or other indicators of law enforcement activity for marijuana-related offenses; operates and manages a social enterprise that had at least two years of positive net assets or profit; has a history of creating vocational opportunity for Justice-Involved individuals; has board members or officers who are Justice-Involved; has at least five full-time employees.
Additional requirements include 51% ownership in aggregate by one or more individuals who meets the requirements of (1) and (2). 30% ownership by at least one individual who satisfies (1) and (2) whom exercises sole control of the applicant or licensee.
As for the license itself, the conditional period for which the Conditional Adult-use Cannabis Retail Dispensary Licenses applies will last four years from when the license is issued. An applicant that receives a license must begin operations within 12 months of it being granted.
Cannabis products can only be acquired from authorized entities, and can only be distributed within the state.
The licensee “shall enter into and comply with all terms and conditions of any agreement with any fund approved by the [CCB] and made available by [OCM], including, but not limited to, accepting a dispensary location identified by the fund or office, any loan agreement with such fund, any lease or sublease agreement with the State of New York or its agents, or any other such agreements into which the licensee enters.”
After the Conditional Period, licensees may apply to transition to an adult-use retail dispensary license.
