New York Cannabis: An Update

A lot of things have happened since our State of the State for New York’s cannabis industry. Of course, the one thing we have all been waiting for has not happened yet, which is the release of the first draft of the adult-use rules and regulations. Now that we are approaching the start of spring, it seems like a good time to go over 2022 developments.

Adult use regulations expected very soon

All recent public statements have set the release of New York’s adult-use rules and regulations in late winter/early spring. Cannabis Control Board (CCB) Chair Tremaine Wright has repeated that estimate during the ongoing Cannabis Conversations hosted by the CCB. Office of Cannabis Management (OCM) Executive Director Christopher Alexander was quoted saying the same thing. It’s late winter now, so the expectation is that the rules and regulations will be out in the next few weeks.

Conditional adult use cultivator and processors licenses were approved

On February 22, 2022 Governor Hochul signed Senate Bill S8084A, which enables existing licensed hemp growers and processors to cultivate and process cannabis under one of two types of temporary licenses:

  • a temporary conditional cultivator license to process and distribute cannabis flower products without holding an adult-use processor or distributor license, and
  • a temporary conditional adult-use processor license to process and distribute cannabis products.

The OCM will develop a license application process and open the program as soon as possible. To qualify for an Adult-use Cannabis Conditional Cultivator License an applicant must have been an authorized industrial hemp research partner for the Department of Agriculture and Markets, cultivating hemp for its non-intoxicating cannabinoid content for at least two of the past four years and in good standing as of December 31, 2021, when the research program ended.

The medical cannabis program has expanded

The OCM expanded the medical cannabis program in a number of ways, with the following changes already implemented:

  • doctors have greater discretion in certifying patients for medical marijuana. A patient can now be certified for medical marijuana use if the doctor believes it can treat or benefit their condition.
  • Anyone legally allowed to prescribe a controlled substance can now prescribe cannabis under state law.
  • The maximum supply of cannabis for patients is expanded to a 60 day supply (from a 30 day supply).
  • Registered Organizations are allowed to sell whole flower to qualified patients.
  • $50 registration fee for patients and caregivers is waived moving forward.
The social equity funding program is happening and will be funded

Earlier this year New York Governor Kathy Hochul announced that New York will establish a $200 million fund to support social and economic equity applicants seeking adult-use cannabis licenses. During the CCB’s New York City Cannabis Conversation Lieutenant Governor Benjamin noted that social equity funding will be available at the onset of licensing, not after. This is obviously a significant development given the concern that equity funding would not come in time to help social equity applicants.

The OCM is cracking down on unlicensed cannabis sales

During several of the CCB meetings and its Cannabis Conversations, the CCB has been vocal that unlicensed adult-use cannabis sales in the form of “gifting” or club membership is illegal. After several months of de facto adult-use dispensaries operating (and publicized) throughout New York, the OCM issued cease and desist letters to more than two dozen retailers. Illegal operators are at risk of being banned from the legal adult-use cannabis market and face substantial fines and possible criminal penalties.

Stay tuned for news on the expected forthcoming release of the adult-use rules and regulations.

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Licensing, New York