What is the MRTA?
The Marijuana Regulation and Taxation Act (MRTA) was signed into law by New York's Governor Cuomo on March 31, 2021. The MRTA regulates use (for adults 21 and older), production, and sale of marijuana in New York. It also establishes the Office of Cannabis Management.
What is the Office of Cannabis Management (OCM)?
The OCM is an independent sector of the alcoholic beverage control division responsible for licensing cultivators, processors, distributors, and dispensaries. The OCM will promulgate rules and regulations for adult-use. The OCM's Executive Director is Christopher Alexander and the Chief Equity Officer is Jason Starr. The OCM will be overseen by a five-member Cannabis Control Board (CCB): Tremaine Wright (chair), Adam Perry, Jen Metzger, Reuben McDaniel III, and Jessica Garcia.
The OCM holds regular meetings, links to recordings of its recent meetings can be found on the OCM website.
What types of licenses are available for cannabis businesses under the MRTA?
(1) Cultivator
(2) Processor
(3) Distributor
(4) Retail Dispensary
(5) Delivery
(6) Microbusiness
(7) Onsite consumption
(8) Nursery
(9) Cooperative
What is a micro-business and a micro-license?
A micro-business is a cannabis business subject to certain size and operational restrictions. The MRTA allows certain businesses with less access to capital to enter into the legal cannabis market by applying for a micro-license which authorizes small-scale production and sale, as well as delivery.
Can you apply for more than one license?
Yes. Though MRTA generally prohibits vertical integration with exceptions carved out for Registered Organizations operating in the medical cannabis program and for micro-businesses, MRTA does allow for certain combinations of licenses.
Can a dispensary sell medical and adult-use?
The MRTA allows registered organizations operating in the medical cannabis program to establish up to three co-located adult-use dispensaries by payment of a fee.
How will the NY cannabis licensing scheme bolster social equity?
Approximately half of cannabis business licenses will issue to social and economic equity applicants, including individuals from communities disproportionately impacted by the enforcement of cannabis prohibition. Further, priority will be given to minority-owned, women-owned, veteran-owned businesses, and financially distressed farmers. Tax revenue generated will be used to fund research on the impact of cannabis legalization on public health and safety, youth use, and NY's economy.
On January 5, 2022, Governor Kathy Hochul announced that she would create a $200 million public-private fund to support social equity applicants as they plan for and build out their businesses by providing direct capital and startup financing. This is to help ensure diversity and inclusivity in New York's cannabis industry. This fund will be seeded with licensing fees and tax revenue.
What type of information will be disclosed on the licensing application?
(1) A plan to ensure hiring diversity;
(2) Ownership and investment information, such as corporate structure and information about the premises to be licensed;
(3) Evidence of good moral character (fingerprint submission);
(4) Financial statements
(5) Documentation that applicant possesses the right to use sufficient land, building, and equipment to properly carry on the activity described in the application. Note that the MRTA deadline for municipalities to opt out of retail dispensaries and on-site consumption lounges has passed.
How will licensing applications be evaluated?
The OCM will perform an initial evaluation of the application and make its recommendation to the CCB. Selection to grant a license will be based on a number of factors including: social and economic equity applicant status, rightful possession or lease of sufficient land, public interest, good moral character, environmental impact, etc.
When will the licensing application period open?
The OCM will soon set and implement application procedures for obtaining the different licenses. The OCM aims to issue draft regulations in the first quarter of 2022, with a two-month public comment period. Only once the regulations are final would applications become available. Once the regulations are out, the CCB has proposed a strict 18-month schedule to complete the licensing process.
How much does applying for a cannabis license cost?
Licensing fees will be set by the CCB and will vary across the different license types. Fees will be dependent on cultivation and/or production volume, micro-business entity status, social and economic equity applicant status, etc.
Bear in mind that, ultimately, total costs will depend on numerous factors (type of license you are applying for, whether you buy or lease property, the size and location of real estate, application and licensing fees, professional and legal fees, and others).
How can applicants prepare now for the upcoming adult-use cannabis license application cycle?
The first step in preparing for your cannabis license application is to retain a cannabis business attorney.
Among other things, they will guide you through the steps of securing real estate, obtaining local approvals (note that the MRTA deadline for municipalities to opt out of retail dispensaries and on-site consumption lounges has passed), developing your security plan, environmental impact plan, and quality control plan.
Why is a cannabis business attorney important?
The lawyers at Leaf Legal, P.C. provide comprehensive and experienced legal counsel to New York cannabis businesses in all aspects from the ground up to make sure clients are able to safely navigate New York's adult-use cannabis program with an in-depth understanding of all integral elements of licensure and running a compliant business.
By understanding the complexities of New York's licensure procedures, the attorneys at Leaf Legal, P.C. are able to diligently guide clients towards establishing state-compliant cannabis businesses. Leaf Legal, P.C. is fully equipped to assist your legal needs in New York's rapidly expanding licensing and regulatory scheme. Contact the attorneys at Leaf Legal, P.C. to request a consultation.