On March 31, 2021, New York Governor Andrew Cuomo signed into law the Marijuana Regulation and Taxation Act (MRTA), which legalizes adult-use cannabis for individuals 21 and older and regulates cannabis in the state of New York.
THE MARIJUANA REGULATION AND TAXATION ACT (MRTA)
A new Office of Cannabis Management (OCM)—an independent agency operating as part of the New York State Liquor Authority—will be responsible for regulating the recreational cannabis market as well as the existing medical marijuana and hemp programs and will be overseen by a five-member Cannabis Control Board. The five members of the CCB have been appointed and are: Tremaine Wright (chair), Adam Perry, Jen Metzger, Reuben McDaniel III, and Jessica Garcia. Additionally, the Executive Director of the OCM is Christopher Alexander and the Chief Equity Officer of the OCM is Jason Starr.
A system of licenses for commercial cultivators, processors, distributors, retailers, cooperatives and nurseries will be created, with a prohibition on vertical integration except for micro-businesses and existing medical cannabis operators. Social consumption sites and delivery services will be permitted.
SOCIAL EQUITY APPLICANTS
The legislation sets a goal of having 50 percent of marijuana business licenses issued to social equity applicants, defined as people from “communities disproportionately impacted by the enforcement of cannabis prohibition” as well as minority- and women-owned businesses, disabled veterans and financially distressed farmers.
Tax revenue from marijuana sales would cover the costs of administering the program. After that, 40 percent of the remaining dollars would go to a community reinvestment fund, 40 percent would support the state's public schools and 20 percent would fund drug treatment facilities and public education programs.
In order to create opportunities for New Yorkers from historically marginalized communities, Governor Kathy Hochul announced in January 2022 that she would create a $200 million public-private fund to support social equity applicants as they plan for and build out their cannabis businesses. Licensing fees and tax revenue will seed the fund.
Adult-use Cannabis Licenses
The Office of Cannabis Management (OCM), an independent sector of the alcoholic beverage control division and overseen by the Cannabis Control Board (CCB), will be responsible for licensing cultivators, processors, and dispensaries in New York. The OCM will also regulate laboratory testing and packaging compliance of cannabis products. In efforts to promote social and economic equities, the OCM has set a goal that 50% of licenses be issued to those from communities disproportionately impacted by cannabis prohibition, and minority-owned, veteran-owned and women-owned enterprises.
The OCM will soon begin to issue and implement regulations establishing the application processes for obtaining the different licenses. Contact the attorneys at Leaf Legal, P.C. to request for counsel and assistance.
Registered Organizations for Medical Marijuana
In New York State, registered organizations are responsible for manufacturing and dispensing medical marijuana. New York State only issued licenses to ten vertically integrated medical marijuana businesses. Currently, the Department of Health is not accepting applications to become a registered organization to cultivate, manufacture, and dispense medical marijuana in New York.
Under the new legislation, current medical cannabis businesses may participate in the recreational market in exchange for licensing fees that will help to fund the social equity program.
PREPARE NOW FOR YOUR UPCOMING APPLICATION
The legal cannabis industry is growing, evolving, and highly-regulated. To succeed, it is a must for businesses to obtain licenses and insurance necessary to operate legally and position themselves to expand if desired. Leaf Legal, P.C. is fully equipped to guide your company as it obtains licenses, identifies and recruits our industry's top talent, executes its business plan, and navigates New York's ever-evolving regulatory scheme. Contact the attorneys at Leaf Legal, P.C. to request a consultation.