CANNABIS LICENSING IN NEW YORK
New York has become the 15th state to legalize recreational marijuana. On March 31st, 2021, New York legalized recreational cannabis for adults 21 years old and older. Here are the basics:
· Adults 21 and older can possess and publicly consume cannabis, as well as gift (NOT SELL) marijuana to other adults.
We can expect retail sales of cannabis by the end of 2022.
As for personal use, it will also allow up to six cannabis plants at home. Up to 12 plants will be possible in a household with more than one adult.
Another very relevant detail is that vertical integration will be prohibited. Vertical integration controls the entire supply chain, such as a business that operates a grow, manufacturer, and retail store. The only exception to this rule appears to be existing medical cannabis businesses and cannabis microbusinesses.
Cannabis Delivery Services are allowed under this bill.
Social Consumption Sites (cannabis lounges) will also be allowed.
Regarding licensing, people with past marijuana convictions or close family members with such convictions will be the first group eligible to apply for licenses to run a recreational marijuana dispensary. This will give New York State a chance to invest early into communities that were disproportionately impacted by weed being illegal.
But with everything, there’s a catch… To get a license in New York, you must (1) pay a $2,000 licensing fee, (2) be a resident of the state, (3) Must be at least a 10% owner of a company for at least 2 years, and (4) must have, or been dependent on someone with, a marijuana related conviction.
Goodluck finding someone with a conviction for drug possession or sale who has managed to own an entire business and operated it for any amount of time. Everyone knows that if you have a criminal record, finding jobs or gathering funding is not easy. So it’s rare to see people with such a record who also have business experience of managing a commercial company.
The proposed regulation states they must "hold or have held, for a minimum of two years, at least ten percent ownership interest in, and control of, a qualifying business, which means a business that had net profit for at least two of the years the business was in operation."
Nonetheless, Gov. Kathy Hochul is proposing a $200 million fund to help these licensees rent retail space and to start up their businesses. Another requirement is that license holders must operate out of a commercial property, not a residence. The state is also launching a Farmers First Program, which will give hemp farmers the first chance to grow cannabis for the adult-use market.
However, it appears that you cannot hold multiple licenses with a retail license (for example, if you have a retail license, you cannot get a license to cultivate, distribute, etc.)
BUT DON’T SLEEP! New York may be one of the hottest cannabis markets in the United States. According to the New York Comptroller, legalization may help the state make the 3.1 billion dollars. Brightfield Group, a Chicago-based research firm, puts it at 2.2 billion dollars by 2023 if legalization were to occur by 2021, making New York the second-largest cannabis market. The common-sense notion is that the size of the state’s population, along with wealth, and open culture, makes it clear that the opportunity for earnings is vast.
