Top 5 Takeaways from the New York Cannabis OCM Announcement

By laying out application requirements, outlining activities permitted under each license category, explaining the adult-use market architecture, creating procedures for regulatory enforcement, and more, the regulations will officially launch the adult-use program in New York.

The following licensing types are subject to these regulations:

1. Cultivation
2. Nursery
3. Processing
4. Distribution
5. Retail Dispensary
6. Microbusiness License
7. Cannabis Collective (Co-op)

These licenses will be managed by the state’s Marijuana Regulation and Taxation Act. This creates a two-tiered market system focused on consumers in New York. The system separates supply (cultivation, processing, and distribution) from sale, much like the alcohol industry’s structure in New York. The rules forbid people from owning interests in firms at different levels. This blog breaks down the top 5 takeaways from the recent OCM update.

1. The updated rules provide local governments and licensed adult-use cannabis companies in New York with several options for approving cannabis consumption by residents of the city who are at least 21 years old. In addition to on-site consumption licenses, the updated regulations establish paths that permit consumption to occur at retail dispensaries’ licensed premises. Additionally, the revised draft laws allow municipal governments to designate cannabis consumption zones inside their borders by exempting specific locations from the Clean Indoor Air Act. With the help of these updated laws, a retail dispensary licensee, like a CAURD licensee, can now designate a specific location on their property where customers can utilize the cannabis goods they’ve bought there. This location is known as “limited retail”. This area, the Limited Retail Consumption Facility, must be inside the same building as the dispensary or on an adjacent parcel. Entry must be restricted to only people 21 years of age and older. Other license types, such as the microbusiness license and the on-site consumption license, may have additional privileges in the future when locating and operating a consumption facility.

4. The updated regulations formalize the provisional license and the application process. After submitting preliminary data regarding their business and eligibility, applicants seeking licenses without a predetermined location would be given a temporary permit. As applicants look for a place for their cannabis business, collect money and capital, and assemble their staff, the provisional license will cut their initial costs and provide them with a sense of “pre-approval” by the state. These updated regulations also describe the general application procedure, enabling potential applicants to prepare the necessary paperwork before application windows open.

3. After December 29, 2023, the first co-located adult-use and medical dispensary may open; after June 29, 2024, the second and third. The following pricing schedule applies to this transition: The remaining balance is due by the earlier of the opening of the second co-located dispensary by the ROD or in $5 million installments paid within 30 days of each $100 million in revenue generated by the ROD, up to $300 million. $5 million is due at the time of licensure.

4. The greatest of 10% of gross revenue, 50% of net income, or $100,000 would be raised to the greatest of 10% of gross revenue, 50% of net revenue, or $250,000 to qualify as a proper party of interest in an adult-use cannabis license or applicant.

5. Microbusiness license holders may buy up to 500 pounds of cannabis biomass annually and more biomass when their operations are in danger (such as crop failure).

How we can help?

At Cannabis License Experts, we provide you with the guidance to plan your cannabis business, acquire funding, navigate the legal requirements, and acquire the appropriate cannabis license for your operations. As the New York cannabis industry develops, more and more licensed producers will be needed to meet the demands of consumers.

Cannabis License Experts offers support from day one of starting your cannabis business, including strategic planning, floor plan preparation, site audits, SOPs, Preventive Control Plans (PCPs), and more.

Our Edibles Compliance division can provide you with a solid plan for your edibles business to help get your products on store shelves.

Contact us today to discover how we can license and legalize your cannabis business to meet federal or provincial regulations.