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2w ago Venture Capital Cannabis harrisbricken Views: 223

The slow and steady roll-out of New York’s adult-use cannabis rules and regulations continues. The Cannabis Control Board (CCB) has made clear: nothing’s stopping this train. But, delays are a given, much as we might hate them.

The CCB met on July 14th to pass revised regulations and update the public on the state of licensing. I attended the virtual meeting so that you didn’t have to. This blog post covers what is new.

New approvals for the conditional cultivator license

Recall that the CCB opened up the licensing application for conditional cultivation on March 15th. The application window just closed on June 30th, after 300 applications were submitted. The CCB continues to review applications and approve them incrementally. Thus far, the CCB has awarded a total of 215 licenses, including a dozen on July 14th.

Many cultivators will plant their first seeds this summer for harvest in fall. The CCB stated that it hopes to see cannabis sales begin this Fall. However, the Board only just opened the application portal for the Adult-Use Conditional Processor License on June 28th, and has yet to begin accepting applications for Conditional Adult-Use Retail Licenses. It seems unlikely that the businesses needed to process, distribute, and sell the product will be ready to receive product from cultivators by fall.

Dispensaries on the horizon?

The CCB also approved the previously released Conditional Adult-Use Retail Dispensary regulations and approved the corresponding application portal. We’ve detailed the requirements for licensure, but the broad strokes: applicants must have been convicted for a cannabis offense (such as sale or possession) prior to the passage of the MRTA, or be nonprofit organizations that serve justice involved individuals and communities with historically high rates of law enforcement activity for marijuana-related offenses.

Real estate represents one of the highest barriers to entry to the industry for those from marginalized communities. New York will locate, lease, and build-out real estate for dispensaries in which they will place licensees. The Dormitory Authority (DASNY) has already received bids from firms that would like to conduct the build out of these dispensaries. We recently wrote about what the build-outs might look like based on the proposal issued by DASNY.

Supportive infrastructure for New York cannabis equity applicants

The CCB also announced the launch of the Seeding Opportunities Initiative. Social Equity Impact Ventures, LLC, a premier Black-led investment team (“SEI Ventures”), will be managing the Social Equity Cannabis Investment Program. The Investment Program will allocate funds to qualified conditional retail dispensary licensees. SEI Ventures will manage the allocation of these funds and support applicants in the process. Notably, the venture fund is managed by NBA Hall of Famer Chris Webber, financial leader Suzanne Shank, and a former City Comptroller, William Thompson.

Ultimately, it is unclear whether New York will manage to license these social equity dispensaries such that fall operations commence. It is exciting to see so much supportive infrastructure in place for the New York cannabis social equity program. It’s also nice to see social equity serve as a statewide priority at the outset, which contrasts with the approach many other states have taken (including my home state of California).

Cracking down on unlicensed cannabis activity

Lastly, New York has issued 52 cease and desist letters and published the names of businesses engaged in unlicensed commercial cannabis activity. These businesses will apparently have an opportunity to respond and cease their unlawful activity. Doing so would preserve their ability to apply for licenses to operate legally. If they continue operating without a license, they may be subject to penalties and barred from licensing.

The CCB may announce the opening of the conditional dispensary license application during next board meeting (in about two weeks). So stay tuned for more updates on New York cannabis!

New York Cannabis Updates: Steady as She Goes on Harris Bricken Sliwoski LLP.


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