The New York Office of Cannabis Management (OCM) will begin accepting Conditional Adult-Use Retail Dispensary (CAURD) applications this Thursday, August 25th. Individuals impacted by marijuana prohibition will be the first to open retail dispensaries for legal adult-use cannabis sales in New York. It’s the first step in the state’s robust plan to make social equity entrepreneurs the bedrock of New York’s adult-use cannabis market. In this post, we explain who is eligible for a CAURD license, application requirements, selection criteria, and what happens if you’re selected.
CAURD License Eligibility
There are two routes to be eligible for a New York cannabis retail license. Applicants will either apply as a qualifying business or as a qualifying non-profit. This post will focus on the requirements under the qualifying business criteria. Both eligibility criteria must have at least one individual who meets the requirements of a justice-involved individual. A justice-involved individual is someone:
- Convicted of a marijuana-related offense;
- Whose parent, spouse, child, legal guardian, or dependent was convicted of a marijuana-related offense; or
- Who is dependent on someone who was convicted of a marijuana-related offense
Eligible marijuana-related convictions are those committed in New York State prior to March 31, 2021. Arrests that did not lead to a conviction are ineligible. However, an individual may qualify if they were convicted for other offenses they were arrested for if the marijuana-related charges were ultimately dismissed. Further, marijuana-related offenses must have violated New York State Penal Law. Convictions of federal offenses are ineligible.
CAURD Qualifying Business Criteria:
Applicants applying as a qualifying business must have an individual who meets the following criteria:
- Justice-involved individual (described above);
- Has qualifying business experience (owned at least 10% of and controlled a business that was profitable for at least two years);
- Has sole control of the applicant (power to order or direct the management, managers, or policies); and
- Has significant presence in New York (residency, assets, real property, bank account, or other connection with or in New York State)
Justice-involved individuals must own at least 51% of the cannabis dispensary license. Multiple justice-involved individuals can be part of the same application however, one individual who meets all of the above criteria must own at least 30% of the CAURD license.
CAURD Application Documents
Cannabis retail licenses require a number of documents including, but not limited to:
- Evidence of being a justice-involved individual. Such documents include a Certificate of Disposition or other acceptable court documents or records of the marijuana-related conviction. Relatives must show a marriage certificate, birth certificate, or other acceptable documentation depending on the nature of the relationship, as applicable
- Financial documents such as tax records showing net profits of the qualifying business
- Documents showing a significant presence in New York such as bank accounts, tax filings, property ownership, or lease documents;
- Ownership records of the qualifying business and of the applicant
- True Party of Interest (TPI) disclosure forms
- Business plan
- Financial documents relating to the applicant
How many New York CAURD Dispensaries will be available in my region and what will they receive?
Based on the above infographic the breakdown of where these licenses will be awarded is based on population distribution. The anticipated 150 licenses will largely go toward the larger cities including Manhattan, Long Island, Brooklyn, Mid-Hudson, and Queens slated to receive the most CAURD licenses. Individuals that are successful in the CAURD licensing process will become eligible to access a $200 million Social Equity Cannabis Fund and potential turnkey storefronts that are being secured and built by DASNY.
Regulators also expect that approximately 25 of the CAURD licenses will go to eligible non-profits, especially if they have a history of serving justice-involved individuals.
CAURD Selection Criteria
The selected applications for a CAURD license will be those with the highest scores. Scores will be based on the strength of the qualifying business criteria. It is not clear yet the exact scoring matrix. However, some factors will influence applicants to receive a higher score. For example, marijuana-related convictions in areas impacted by over-policing or mass incarceration may receive a higher score.
Applicants will select their top five regional preferences for a dispensary location broken down as follows: Bronx, Brooklyn, Capital Region, Central NY, Finger Lakes, Long Island, Manhattan, Mid-Hudson, Mohawk Valley, North Country, Queens, Richmond, Southern Tier, and Western NY. The top-scoring applicants in each region will be selected to move forward and will be assigned a dispensary location provided through the New York Social Equity Cannabis Investment Fund.
What Happens After?
Following the application cycle selected applicants will have twelve months to complete the remaining application requirements in order to obtain final approval. Additional documents include submitting fingerprints and notifying the local municipality among others.
Are you ready? Consult with knowledgeable industry experts with a proven track record of success to ensure your application has the strength in what will undoubtedly be a competitive market.
