New York’s Seeding Opportunity Initiative
This spring, Governor Hochul and the NY Office of Cannabis Management (“OCM”) began to roll out the regulated adult-use cannabis market in the Empire State. Under the state’s Farmers First Program, existing CBD hemp cultivators and processors may cultivate and process cannabis (marijuana) as the first licensed cannabis cultivators and processors in the adult-use market. Under the State’s Equity Owners Lead Program, business owners with certain New York marijuana convictions will have the first opportunity to apply for retail dispensary licenses and enjoy significant first-to-market advantage.
So, while we wait to learn more about when and how the other license types will become available pending further regulation, we now have an idea of how the early adult-use cannabis market will unfold in New York. Let’s take a quick look.
Farmers First Program
Under this initiative, New York hemp cultivators and processors who have grown or processed hemp for two of the last four years are eligible to apply for conditional cultivator or conditional processor adult-use cannabis licenses, respectively. As of May 19, 2022, OCM has issued 146 conditional cannabis cultivator licenses, so seeds are already in the ground.
To qualify, the hemp licensee must maintain at least 51% ownership in the cannabis license applicant and cannabis licensee for two years, and the cannabis licensee must comply with the State’s environmental and sustainability program, and participate in a state-run cannabis industry mentor program.
Equity Owners Lead Program
Under this program, which is still being finalized, applicants that are majority owned by one or more individuals affected by past marijuana convictions may be eligible to apply for the first dispensary licenses in New York. Among other requirements, the applicants must be at least 51% owned by “justice involved” individuals who have also been part owners of a profitable business.
A justice involved person is someone who has been convicted of, or who has a parent, guardian, child, spouse, or dependent who has been convicted of, a cannabis-related offense in New York before March 31, 2021. Furthermore, the justice involved individual must have owned at least 10% of a business that was profitable for at least two years. Finally, one justice involved individual with the applicable business ownership experience must maintain at least 30% ownership interest in, and sole control over, the retailer license applicant for the first four years.
The regulations for the Equity Owners Lead Program are still being finalized. The public comment period for the draft rules ended on May 30th, 2022, and OCM intends to finalize the rules and open applications this summer.
For much more detail on this early cannabis market in New York and the specific license requirements, please check our YouTube page where a recording of the webinar will be posted within the next week.