New York Adult-Use Cannabis Licenses
This post summarizes the types of New York adult-use cannabis licenses authorized by the Marijuana Regulation and Taxation Act (MRTA). Under the new law, the Cannabis Control Board (CCB) will oversee the Office of Cannabis Management (OCM), which will develop regulations and issue the licenses. OCM posted this table describing the different licenses and the ownership limits placed on each (i.e., MRTA’s vertical integration limits). Here are the adult-use license types:
- Cultivator
- Processor
- Cooperative
- Distributor
- Retail Dispensary
- Microbusiness
- Delivery
- Nursery
- On-site Consumption
There will also be two adult-use licenses available to registered medical marijuana businesses (not discussed in this post):
- Registered Organization Adult-use Cultivator Processor Distributor Retail Dispensary
- Registered Organization Adult-use Cultivator Processor Distributor
Textualism: Straight from the Horse’s Mouth
In the early 20th century, when cars were horses, you might ascertain your ride’s age by examining its teeth. This is the origin of the phrase “straight from the horse’s mouth.” By analogy, when you’re working in a heavily regulated industry, it’s a good idea to familiarize yourself with the applicable laws and regulations. And whether or not you’re a lawyer, it can be useful to get info directly from a statute or regulation, i.e., straight from the horse’s mouth. If nothing else, it will make you sound informed (compare “According to the applicable statutory provision _______” to “Hey man I once read on Reddit that ______”).
But MRTA is 128 pages long! That’s OK! I’ve included below the relevant MRTA section (§) to help you locate a provision that I’m referencing (use <cntrl-F> to find it even quicker).
1. Cultivator License (MRTA § 68)
"Cultivation" means growing, cloning, harvesting, drying, curing, grading, and trimming of cannabis plants for sale to certain other categories of cannabis license- and permit-holders. (MRTA § 3-19)
What to do with a Cultivator License: plant, grow, clone, harvest, dry cure, grade and trim cannabis (MRTA § 68-2). CCB may also create rules to allow Cultivators “to perform certain types of minimal processing” without a processor license (MRTA § 68).
License Limitations: a Cultivator can also own a Processor license and Distributor license, but only to process and distribute its own products (MRTA § 68-3). A Cultivator may not own (directly or in directly) a Dispensary (MRTA § 68-4).
Q. But what if I’m a cultivator and only want to own a little bit of a company that owns the dispensary license?
A. “Ownership” is defined as “a direct or indirect interest, including by stock ownership, interlocking directors, mortgage or lien, personal or real property, management agreement, share parent companies or affiliated organizations, or any other means” (MRTA § 68-4).
CULTIVATOR 🢂 PROCESSOR
2. Processor License (MRTA § 69)
“Processor" means a licensee that extracts concentrated cannabis and/or compounds, blends, extracts, infuses, or otherwise manufactures 48 concentrated cannabis or cannabis products, but not the cultivation of the cannabis contained in the cannabis product. (MRTA § 3-42)
What to do with a Processor License: blend, extract, infuse, package, label, brand and otherwise make or prepare cannabis and cannabis products (MRTA § 69-2).
License Limitations: a Processor can also own a Distributor license, but only to distribute its own products (MRTA § 69).
Limitation: a Processor may not also own (directly or indirectly) a Dispensary (MRTA § 69-5).
CULTIVATOR 🢂 PROCESSOR 🢂 DISTRIBUTOR
3. Cooperative License (MRTA § 70)
Caveat: Like non-cannabis cooperatives, a cannabis cooperative must qualify as a NY cooperative. Specifically, under MRTA § 70-2, a cannabis cooperative must:
- Be comprised of New York residents as a New York LLC or LLP (or other appropriate business structure allowed by the CCB)
- Subordinate capital (i.e., returns to investors are limited)
- Be democratically controlled with one vote per member
- Apportion interests in proportion to a member’s active participation
- Operate according to the 7 principles of the International Cooperative Alliance (1995)
What to do with a Cooperative License: cultivate, process, and sell cannabis to Distributors and On-site Consumption cites, but not directly to cannabis consumers (MRTA § 70)
Limitations: Cooperatives may not own (directly or indirectly) a Dispensary, Microbusiness, or On-site Consumption site (MRTA § 70-5). Also, no member of a Cooperative can have a direct or indirect interest in any adult-use cannabis license (MRTA § 70-4).
COOPERATIVE 🢂 DISTRIBUTOR / ON-SITE CONSUMPTION SITE
4. Distributor License (MRTA § 71)
"Distributor" means any person who sells at wholesale any cannabis product, except medical cannabis (MRTA § 3-24).
What to do with a Distributor License: acquire, possess, distribute and sell cannabis (MRTA § 71).
License Limitations: a Distributor can also have a Cultivator or Processor license, but only to distribute cannabis and cannabis products cultivated or processed by that Cultivator or Processor license (MRTA § 71-3). A Distributor may not also own (directly or indirectly) a Dispensary, Microbusiness, or On-site Consumption site (MRTA § 71-2).
CULTIVATOR / PROCESSOR / COOP / MICROBUSINESS DISTRIBUTOR 🢂 RETAIL DISPENSARY / ON-SITE CONSUMPTION SITE
5. Retail Dispensary License (MRTA § 72)
What to do with a Dispensary License: acquire, possess, sell and deliver cannabis from the licensed premises of a retail dispensary to cannabis consumers (MRTA § 72-1).
License Limitations: Retail Dispensaries may not own (directly or indirectly) a Cultivator, Processor, Microbusiness, Cooperative, or Distributor license (MRTA § 72-3). No person may own more than three Retail Dispensary licenses (MRTA § 72-2)
CULTIVATOR / PROCESSOR / COOP / MICROBUSINESS 🢂 DISTRIBUTOR 🢂 RETAIL DISPENSARY
6. Microbusiness License (MRTA § 73)
"Microbusiness" means a licensee that may act as a cannabis producer for the cultivation of cannabis, a cannabis processor, a cannabis distributor and a cannabis retailer under this article; provided such licensee complies with all requirements imposed by this article on licensed producers, processors, distributors and retailers to the extent the licensee engages in such activities (MRTA § 3-34).
What to do with a Microbusiness License: limited ability to cultivate, process, distribute, deliver, and dispense its own cannabis (MRTA § 73-1). The CBB will determine the size, scope, and eligibility criteria for microbusinesses, and in a manner than promotes social and economic equity applicants (MRTA § 73-3).
License Limitations: Microbusinesses may not own (directly or indirectly) more than one microbusiness or any other type of adult-use license.
CLTIVATOR / PROCESSOR / COOP 🢂 MICROBUSINESS 🢂 DISTRIBUTOR 🢂 RETAIL DISPENSARY / ON-SITE CONSUMPTION SITE
7. Delivery License (MRTA § 74)
"Delivery" means the direct delivery of cannabis products by a retail licensee, microbusiness licensee, or delivery licensee to a cannabis consumer (MRTA § 3-20).
What to do with a Delivery License: deliver cannabis and cannabis products to cannabis consumers (MRTA § 74). No more than 25 individuals (providing full-time delivery services in a week) per Delivery license (MRTA § 74).
License Limitations: Delivery Licensees may not own (directly or indirectly) more than one Delivery license or any other type of adult-use license (MRTA § 74).
DELIVERER 🢂 CANNABIS CONSUMERS
8. Nursery License (MRTA § 75)
“Nursery" means a [cultivator] that produces only clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis by licensed adult use cannabis cultivators, microbusinesses, cooperatives and registered organizations (MRTA § 3-35). What to do with a Nursery License: produce, sell, and distribute clones, immature plants, seeds, and other agriculture products used for cannabis cultivation (MRTA § 75). License Limitations: a Cultivator may apply for and hold a Nursery license to sell to other Cultivators, Cooperatives or Microbusinesses (MRTA § 74).
NURSERY 🢂 CULTIVATORS / COOPERATIVES / MICROBUSINESSES
9. On-Site Consumption License (MRTA § 77)
"On-site consumption" means the consumption of cannabis in a licensed area (MRTA § 3-37). We here at Green Light Law Group have been excited about this license type and wrote about applying for an on-site consumption license as well as what this license type means for New York cannabis tourism.
What to do with on On-site Consumption License: acquire, possess and sell cannabis to consumers for on-site consumption (MRTA § 75).
License Limitations: On-site Consumption licensee may not own (directly or indirectly) more than one On-site Consumption license or any other type of adult-use license (MRTA § 77(2-3).
There are other statutory limitations for On-site Consumption licenses (see MRTA § 1-14) and I suspect OCM will regulate this space extensively. For example, On-site Consumption premises may not be within 500 feet of a school or 200 feet from a house of worship (MRTA § 77-4) and no on-site gambling or fireworks (MRTA § 77-9).
The statute lists several factors, some or all of which the CBB may consider when reviewing an On-site Consumption license application:
a) that “it is a privilege, and not a right, to cultivate, process, distribute, and sell cannabis”
b) the quantity and types of other licenses in the proximity to the location
c) evidence that all other required licenses and permits have been obtained
d) whether there is a general need for on-site cannabis consumption
e) its effect on traffic
f) noise levels
g) any other relevant factor that would help “promote public convenience and advantage and the public interest of the community” (MRTA § 77-5).
ON-SITE CONSUMPTION SITE 🢂 CANNABIS CONSUMERS
You can contact Ramsey Chamie at info@gl-lg.com or 503-488-5424.
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