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New York Announces Conditional Adult-use Cannabis Retail Dispensary Licenses

New York Announces Conditional Adult-use Cannabis Retail Dispensary Licenses

new york adult use cannabis licenses for retailers

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:

  1. An applicant that has:

    • a) a significant presence in New York State, either individually or by having a principal corporate location in the state;

    • b) is incorporated or otherwise organized in the state; or

    • 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;

  2. An individual, or an entity with one or more individuals, where at least one individual:

    • 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;

    • b) Provides evidence of the primary residence of the Justice-Involved individual at the time of said individual’s arrest or conviction; and

    • 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.

  3. 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.

California Cannabis Tax to be Lifted to Aid Cultivators

California Cannabis Tax to be Lifted to Aid Cultivators

California cannabis cultivation tax to be lifted

In an effort to aid cannabis cultivators that have been hanging on by a thread the past several years, California is completely overhauling its cannabis tax codes to try and help.

The changes, which were adopted last week as part of a broader state budget agreement, will also create tax credits for some cannabis businesses, expand labor rights within the industry and switch collection of a state excise tax from distributors to retailers. That tax will pause at 15% for three years, after which regulators could raise the rate to recoup lost revenue from discontinuing the cultivation tax.

Advocates believe the new tax plan will aid the struggling small businesses operating in the legal cannabis industry in California. With exorbitant application fees, license costs and strict regulatory oversight set by local jurisdictions, it has become untenable to run a small-scale cannabis operation in the state.

While this may just be a band aid over the larger issues plaguing California’s legal cannabis industry, it should at least help cultivators stand a better chance of staying afloat in the competitive industry.

Prior to the removal of the tax, cannabis cultivators had to pay a tax of over $10 per ounce of flower. With 16 ounces in a pound, and the price of a pound of cannabis flower tanking as low as $500 in the last year, growers were potentially paying nearly half of their profit just into taxes for cultivation.

Additionally wholesale prices have dropped by as much as 50% over the past year, particularly squeezing farmers whose outdoor crops sell for less and forcing many smaller operations to close down.

Even the trimmings of cannabis plants were taxed at $3 per ounce, making a byproduct of the cultivation process that can be used to create ointments, creams or extracts just as untenable.

And of course, all of the increased costs levied on growers is then transferred to distributors, then retailers, and finally passed on to the consumer. Officials and advocates are hoping the move will lower cannabis prices overall for consumers while making it more profitable for cultivators.

However the state has yet to take any action on retail sales taxes. Business owners and advocates claim that California will never be able to compete with illicit market cannabis which is just as large in the state due to current taxes.

For comparison, alcohol in the state is only taxed at the state sales tax of 6%, with an additional charge of $3.30 per gallon. Cannabis on the other hand, in addition to state and local sales tax, is levied a 15% additional sales tax.

In other words, a customer who thinks they may be getting a deal on a $100 ounce, could actually be paying over $120 for the same product after taxes. Exorbitant sales tax on cannabis is extremely common in legal cannabis industries across the country. Medical cannabis sales in most states have no additional tax at all.

Lastly, the latest removal of the taxes is set to last only 3 years. While this gives advocates time to fight for more ground and lower additional taxes, reform licensing and equity access to the industry, the fight is not nearly over for cultivators and business owners in California’s cannabis industry.

Pennsylvania Cannabis Banking Bill Headed to Governor’s Desk

Pennsylvania Cannabis Banking Bill Headed to Governor’s Desk

Pennsylvania cannabis banking bill

A Pennsylvania cannabis banking bill that would protect state banking and financial institutions from prosecution is on its way to Governor Tom Wolfe’s desk after passing the House last week.

The legislation is nearly identical to a standalone bill that passed through the legislature earlier this session. The new measure passed with a 173-27 vote.

Sen. John DiSanto (R), the chief sponsor of the bill, had initially introduced the measure as a standalone piece of legislation. But after passing the Senate earlier this year and clearing the House committee, DiSanto filed it as an amendment to the already-passed HB 311. That bill deals with authorizing certain financial institutions to conduct savings promotion programs.

The amendment won’t give financial institutions complete immunity however, as it only applies on the state level. As cannabis is still a Schedule 1 controlled substance according to the federal government, banks and financial institutions can still be prosecuted for working with legal cannabis businesses, even if they are operating in a legal state.

However the amendment represents a step in the right direction for an industry that has been plagued with financial burdens due to federal laws. The fed has been stalling the passage of the SAFE Banking Act which would give federal banks protection in dealing with legal cannabis businesses.

The federal government isn’t necessarily cracking down on any banks doing business with legal cannabis businesses currently. But the implication that they could be punished has prevented almost every federal financial institution from working with legal cannabis businesses.

Now state institutions at least will not have to worry about being prosecuted on the state level. With the federal government more or less looking the other way in regards to state legal cannabis industry operations, more banks and financial institutions can feel safer in working with cannabis businesses.

The text of the amendment officially states that a “financial institution authorized to engage in business in this Commonwealth may provide financial services to or for the benefit of a legitimate cannabis-related business and the business associates of a legitimate cannabis-related business.”

The same protections will also be afforded to insurers. However the amendment also specifies that banks or insurers will not be required to provide services to legal cannabis businesses.

Further, the legislation says the state government cannot “prohibit, penalize or otherwise discourage a financial institution or insurer from providing financial or insurance services to a legitimate cannabis-related business or the business associates of a legitimate cannabis-related business.”

Agencies will be prohibited from “recommending, incentivizing or encouraging a financial institution or insurer” to not provide services just because a business is associated with cannabis.

Banking has been the largest issue impacting legal cannabis industries across the country since Colorado first legalized in 2012. With lack of access to federal banking, and few state institutions willing to take the risk, cannabis business owners are at the whim of whatever institution will take them.

This typically results in higher than average interest rates, stricter monitoring of account activity and even account removal without notice. Credit Unions and smaller local banks will even impose exorbitant deposit fees since they know cannabis businesses will deposit larger amounts of cash compared to other businesses.

Additionally as most credit card companies operate in cooperation with federal institutions, the majority of cannabis businesses are cash only. Robbery and theft is extremely common in the cannabis industry as businesses owners must carry bags of cash sometimes containing hundreds of thousands of dollars since they can’t accept credit from customers.

The Secure and Fair Enforcement (SAFE) Banking Act that has passed the House in some form six times at this point, only to stall in the Senate. It is currently the only federal bill focused on solving the banking issues plaguing the legal cannabis industry.

Nevada cannabis lounges approved by state oversight board

Nevada cannabis lounges approved by state oversight board

Nevada cannabis consumption lounge licenses

Regulations for the licensing and operation of cannabis consumption lounges in Nevada received approval from the state’s oversight board Tuesday.

State lawmakers approved a bill authorizing cannabis consumption lounges in Nevada last year. The last several months have included 15 meetings among Nevada Cannabis Compliance Board members to determine the licensing process.

Two consumption lounge license-types will be issued. The first is for lounges that will be directly attached to a retail cannabis dispensary. The second is for independent, stand alone consumption lounges.

Anybody can apply for a Nevada cannabis consumption lounge license. However one person cannot hold a retail dispensary license and an independent consumption lounge license at the same time.

Only the owner of a licensed operational retail cannabis dispensary may be eligible to apply for a retail cannabis consumption lounge license. In other words, a consumption lounge attached to a dispensary will be owned by the owner of the dispensary.

The Nevada Cannabis Compliance Board will hand out 20 licenses for independent consumption lounges, with 10 reserved for social equity applicants. To qualify as a social equity applicant, the applicant must be someone “who has been adversely affected by provisions of previous laws which criminalized activity relating to cannabis, as determined by the Board [. . .] Such adverse effects may include, without limitation, adverse effects on an owner or officer of the applicant.”

An independent cannabis consumption lounge would contract with a retail cannabis dispensary to supply cannabis for customers to consume on site.

If all 20 licenses are handed out by June 30, more will be issued as long as the amount of independent consumption licenses does not outnumber the amount of retail consumption lounges.

However a retail cannabis consumption lounge will not come cheap. The application alone requires a non-refundable application fee of $100,000.

An independent cannabis consumption license on the other hand will carry a $10,000 fee to apply. This fee can be reduced further for social equity applicants.

Currently there is no word on when or how the licenses will be scored and issued. Additionally there will still be several months ahead of developing and promulgating regulations for cannabis consumption lounges.

Local jurisdictions will also have the option to restrict cannabis consumption lounges from opening in their area.

The Nevada Cannabis Compliance Board will be keeping those interested in Nevada cannabis consumption lounges up to date through a newsletter, which can be subscribed to on the government website.

Mississippi medical cannabis industry to launch July 1

Mississippi medical cannabis industry to launch July 1

Mississippi medical cannabis legalization

After months of lengthy legal battles, legislation effectively legalizing cannabis for medicinal use in Mississippi will become law on July 1, 2022. The Mississippi Department of Revenue will be running the licensing process.

The agency has said that it will begin accepting applications for dispensaries starting July 5. Patients and medical practitioners will be able to begin applying for applications and registrations on July 1, along with some cannabis production licenses. These licenses specifically will be handled by the Mississippi Department of Health (MSDOH).

Both agencies’ responsibilities stem from the Mississippi Medical Cannabis Act (MMCA), which was passed in February of this year. Medical cannabis legalization was delayed by nearly a year in the state after a voter initiative to legalize, Initiative 65, was overturned by the Mississippi Supreme Court in May of 2021.

Now patients with conditions covered under the MMCA can go to their physician and complete a medical certification from the MSDOH. If approved, patients will be able to apply to join the medical cannabis program. Once accepted they will receive patient ID they can use to purchase cannabis from a licensed dispensary.

While patients may be accepted as early as next month, plants won’t go in the ground in Mississippi until the bill is officially law, i.e. July 1. With dispensary applications being accepted starting July 5, it will certainly be several months before we see any dispensaries open with cannabis product on their shelves.

Estimates claim that purchasing could begin by December this year, or January 2023.

For those seeking a license, the state plans to hand them out within 30 days of receiving a completed application, meaning dispensary construction could begin within the next two months. The state is also accepting applications for a variety of other medical cannabis industry licenses:

  • Cultivator/Grower

  • Processor/Wholesaler

  • Transporter (local freight)

  • Transporter (long distance)

  • Testing Facility

  • Waste Disposal

Cannabis industry could be worth over $90 billion by 2026

Cannabis industry could be worth over $90 billion by 2026

cannabis industry market projects

When states began legalizing cannabis for recreational use following Colorado in 2012, the trend looked promising. Multiple states followed suit in the years to come, and as of 2022, 19 states and the District of Columbia have legalized cannabis for recreational use.

In addition to adult-use cannabis, the majority of the country now has some form of medical cannabis laws on the books. The rapid growth of the industry has turned initial predictions for the industry’s revenue on their heads.

In 2017, those with insights into the industry and a pulse on the growth of the legal cannabis market predicted that the industry could bring in as much as $25 billion in revenue by 2025. A recent analysis by MarketsandMarkets found that cannabis industry revenue surpassed $20 billion in 2020. It also predicts that legal cannabis markets could be worth over $90 billion by 2026.

In other words, the industry has triple the growth potential as originally thought. This is a positive sign for those wanting to see the industry grow. It also shows the increasing acceptance of cannabis as a recreational product, and the changing perceptions surrounding cannabis consumers.

Concentrates are the main product sector that is seeing the most growth since 2020, and has the most projected growth through 2026. This includes edibles, tinctures, vape pens, cannabis extracts and other concentrated products.

What may come as a surprise is the finding that medical cannabis dominated the majority of cannabis revenue since 2020. However it does appear that the conductors of the analysis included CBD as a medical cannabis product.

CBD has exploded in popularity as a legal “health supplement” after the 2018 Farm Bill legalized hemp, i.e. cannabis with a THC percentage below .3%. Opposed to medical cannabis which requires a patient’s license and purchasing from a licensed dispensary, CBD can be obtained from a smoke shop or gas station in some cases.

Not to take away from the success of medical cannabis states, Oklahoma was the highest grossing cannabis market in the country in 2021, despite only having a medical cannabis program.

Overall, future growth of cannabis markets will be mostly seen in North America as Canadian and US markets continue to grow. Other factors such as an increase in recognition of medical benefits of cannabis and growing consumer demand for cannabis in disease management and treatment due to high health care costs are expected to drive the growth in the North American region.

As for hemp markets, the industry is projected to hit roughly $25 billion by 2025. The hemp industry was worth over $4.5 billion in 2019, just one year after hemp was federally legalized.