A Busy Monday for the New York Cannabis Market: Regulations Released and Licenses Awarded
This morning, 11/21, the New York Cannabis Control Board (CCB) made history by awarding the state’s first Conditional Adult-Use Retail Dispensary (CAURD) licenses along with announcing a slate of regulations.
CAURD Licenses
In late September of this year, the Office of Cannabis Management (OCM) received over 900 CAURD applications. Anticipation for the awarding of these CAURD licenses has been high, however a recent judicial decision blocked the awarding of any CAURD licenses in the five regions of the state that the plaintiff had applied in. Many had wondered if this would delay the entire award process.
Instead, this morning the OCM released 36 licenses including eight for non-profits and 28 for private businesses. This leaves potentially 114 CAURD licenses yet to be awarded, though 63 of those licenses are currently expected to go to the five regions affected by the lawsuit. Thus, potentially 51 spots are still available in current districts and are expected to be awarded in the coming months. The distribution of the remaining licenses is:
13 out of 20 licenses still available in Long Island
1 out of 3 licenses available in Staten Island
10 out of 16 licenses available in Queens
14 out of 22 licenses available in Manhattan
7 out of 10 licenses available in the Bronx
2 out of 7 licenses available in Capital Region
1 out of 2 licenses available in Mohawk Valley
3 out of 4 licenses available in North Country
Cannabis Regulations in New York
After almost an entire year of delays, the OCM (finally) published the first draft of the State of New York’s first Adult-Use Cannabis Regulations which will now enter a 60-day comment period. One of the bigger and more pleasant surprises for New York’s nascent cannabis industry is that municipalities are prohibited from imposing special fees on cannabis businesses. Municipalities will still be allowed to create restrictions regarding zoning, hours, and similar rules. Less of a surprise is that the regulations include multiple rules creating a two-tier market that strictly separate the wholesaler and retailer, with multiple provisions directed at assuring that the same individuals do not participate on both sides of the market.
When it comes to future applications, the regulations make clear that all license applicants must demonstrate a commitment to social equity. Licensing will use a multi-tier approach to social equity as follows:
Level 1: individuals with a cannabis conviction and who have lived in a community disproportionately impacted by the enforcement of cannabis prohibition (CDI)
Level 2: individuals who have formerly or currently live in a CDI
Level 3: minority-owned, women-owned, distressed farmers, disabled service veterans, and other social equity applicants
In addition, the OCM passed the revised packaging, labeling, and marketing regulations and authorized three testing labs. Some of the packaging and labeling regulations include:
Allowing multiple logos and brand elements, making co-branding possible
Allowing strain names and brand names that would otherwise be prohibited under bans related to the items related to children (i.e., “Candy Kush”)
Customer incentive programs are allowed if intended to promote environmental activism (i.e., returning item packaging for recycling and receive a discount on next purchase)
The next Cannabis Advisory Board Meeting is December 1st, 2022.
Global Go’s team of licensing and legal analysts is currently reviewing the regulations in full and will be providing a detailed analysis of the new regulations and proposals later this week to our clients and newsletter recipients. Please contact us by filling out the form for more information and to speak to one of our analysists on how these regulations may affect you.