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New york Cannabis License Application Process
Our New York cannabis license advisors (with 20 years of experience in the USA's cannabis industry and more than 100 applications since 2013) are closely monitoring the license application process and reviewing revisions as new regulations are put into place. The application window will open on October 4 for 60 days. The fees for applications and licensing vary, ranging from $750 to $300,000, not including the unique cost for medical cannabis companies. Equity applicants will enjoy reduced fees and access to mentorship, training, and technical support through a network of support centers established by the state. New York has increased the number of licenses.
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What are the New York cannabis regulations?
The new regulations introduce guidelines for licensing eight different types of businesses in the cannabis industry, including nurseries, cultivators, processors, cooperatives, distributors, retail dispensaries, delivery services, and microbusinesses. Except for microbusinesses, which have the flexibility to handle their cultivation, processing, and sales on a smaller scale, these licenses fall into two main categories: supply and retail. The regulations are designed to prevent any single entity from dominating the market by prohibiting most individuals and companies from holding ownership stakes in the supply and retail sectors.
Moreover, the rules define criteria for attaining priority status as a social and economic equity applicant. These applicants are individuals disproportionately affected by anti-marijuana enforcement, minority- and women-owned businesses, distressed farmers, and service-disabled veterans. These regulations aim to promote fairness and inclusivity within the cannabis industry.
New York's Office of Cannabis Management is opening general license applications from October 4 to December 4, 2023, encompassing adult-use cultivator, processor, distributor, microbusiness, and retail dispensary licenses. Current conditional cultivator and processor licensees can apply for permanent licenses during this period. The Office aims to issue licenses for 500-1000 retail dispensaries, 220 microbusinesses, 20 Tier 1 indoor cultivators, 20 Tier 2 indoor cultivators, 55 Type 1 processors, 100 Type 2 processors, and unlimited Type 3 processors (reviewed on a rolling basis). However, even with new licenses, the shortage of cannabis retail outlets in New York may not be immediately resolved.
For New York cannabis licensing:
Priority for Social and Economic Equity Applicants: Priority will be given to applicants with social and economic equity status and those who participated in OCM training programs like the Compliance Training & Mentorship program.
Application Requirements: Applications will inquire about business ownership, participation in OCM workforce training programs, and operational plans.
Control Over Business Location: To be eligible for a final license, applicants must demonstrate control over a specific business location. However, retail and microbusiness applicants can apply for a provisional license without a finalized location. Provisional licensees have one year to secure a location and obtain a final license.
Expedited Application Window: Retail and microbusiness applicants with secured locations can apply for an expedited application window, closing on November 3rd.
How will the regulations impact existing cannabis businesses?
Starting in December, companies already licensed to provide medical cannabis can enter the adult-use, recreational market as retailers and wholesalers. Aside from microbusinesses, these licensed companies have the privilege of growing, manufacturing, and selling their cannabis products.
To make this transition, these companies must pay a special licensing fee of $20 million, which grants them the right to operate up to three adult-use dispensaries in locations where they already sell medical cannabis. Currently, there are over 300 cultivators and processors operating with conditional licenses. Those in good standing will have the opportunity to transition to a general (non-conditional) license. The cannabis industry has faced challenges due to a lack of funding and court-ordered freezes on licensing. This has resulted in a shortage of retail outlets, causing farmers and manufacturers to hold a substantial inventory of cannabis valued at approximately $6 billion this fall.
Do I qualify for a Conditional Adult-Use Retail Dispensary License?
To qualify for a CAURD license applicants must meet either meet the requirements for the qualifying business criteria or the qualifying nonprofit criteria.
To be eligible under the qualifying business criteria, applicants must provide documentation evidencing that at least thirty percent (30%) of the applicant is owned by one individual who is/has
- Justice involved: Conviction of a canna-related offense in New York State before March 31, 2021, on either themselves or a parent, legal guardian, child, spouse, or dependent; and
- Qualifying business experience: At least ten percent (10%) ownership, for at least two years, in a business that had positive net profits during the individual’s ownership; and
- Sole control over the applicant, as defined by having the power to order or direct the operation, policies, management, and managers of the business.
- Operated a social enterprise that had net assets or profit for at least two years, defined as a business serving customers, operated by a nonprofit or fiscally sponsored by a nonprofit, which both fulfills the parent organization’s mission and generates revenue.
Additionally, 51% of the applicant’s ownership needs to be held by a qualified justice-involved owner.
To meet eligibility under the qualifying nonprofit criteria, applicants must provide documentation evidencing that at least thirty (30%) of the applicant is owned by one qualifying nonprofit organization that has:
To meet eligibility under the qualifying nonprofit criteria, applicants must provide documentation evidencing that at least thirty (30%) of the applicant is owned by one qualifying nonprofit organization that has:
- A history of creating vocational opportunities for justice-involved individuals; and
- A history of intentionally serving justice-involved individuals; and
- At least one justice involved board member, officer, governing committee member, or advising committee member; and
- At least five full-time employees; and
Additional requirements are detailed in this document released by the New York Cannabis Control Board.
New York Cannabis Industry - Market Potential
The Empire State has all the attention of the national cannabis industry as operators eagerly await the opening of this new recreational licensing in a state with a GDP at nearly $1.5 trillion, representing over 7 percent of the U.S. total. As one of the most populated states on the east coast, New York is expected to create one of the biggest legal cannabis markets with a projected industry size of $4.2 Billion according to estimates provided by the New York Times. In July 2014, New York enacted the Compassionate Care Act which authorized a state medical marijuana program. In March 2021, New York became the 15th state to legalize recreational marijuana under the Marihuana Regulation and Taxation Act. This new legal cannabis market is expected to capture $1.2 billion in sales by the end of 2023. Despite the program's slow start and numerous delays, the future of cannabis looks bright for the empire state. Proposed regulations were released in November of 2022 and preliminary licensing for Hemp cultivators, Hemp processors, and for eligible CAURD applicants has begun. Book a free consultation today to learn more about how Cannabis License Experts can assist you and your team while preparing for licensure to become available within New York.
New York Cannabis License (Requirements, Timelines, and Renewal Processes)
The Cannabis Control Board released the first set of draft regulations on Nov 21, 2022, ahead of its board meeting and can be found using this link. At this time only Hemp processors, Hemp cultivators, and eligible CAURD applicants awarded through the lottery process have started the licensing process.
The draft regulations outline the license types as well as tiers in addition to licensing fees and preliminary requirements for licensure. The application process will be released in 2023.
Owners or financial interest holders in a New York cannabis retail license can only hold ownership in three dispensary licenses within the state and cannot hold ownership within any other license type held in the state. Additionally, fully vertical operations are not permitted under the state's regulations which provides opportunities for more diverse ownership within the state's legal cannabis market. The only exception to the above is for the micro-business license which allows for the limited production, manufacturing, distribution, and dispensing of the license holder's own product.
Note that, however, the state’s existing medical marijuana companies were initially allowed to open four medical dispensaries, and under the new law, are now able to double that number to total up to eight permitted locations for dispensary operations.
The Cannabis Control Board will oversee all New York Cannabis licenses for the state. While many cities create their own cannabis departments and/or licensing team to approve new operators, other jurisdictions utilize third parties to impartially and equitably rank each potential new cannabis business.
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Financial Requirements for New York Cannabis License Applications
Common for most jurisdictions as a mandatory component of the New York Cannabis License application is the requirement for a minimum amount of liquid cash on hand. This will ensure that applicants have the financial wherewithal from the licensing process through to the initial 2-5 years of operation. General requirements for New York Cannabis License applications include bank statements, CPA letters, Letter of Credit, or similar documentation. Additionally, a 2-3 year Pro Forma is also submitted as a component of the formal Business Plan. Typically, a budget of between $400,000 and $1,000,000 would be required to open a cannabis dispensary in New York, depending on facility size and operations. The application fees for different types of recreational New York cannabis licenses have yet to be determined. Applicants can get a sense of the fee scale by looking at the new rules that have been issued for the state’s Hemp Program. The fee for a hemp extraction and manufacturing license is $3,500, while the New York Cannabis License fee for a dispensary is $300 per retail location.
New York Cannabis License Types
All New York Cannabis license types, including consumption lounges, events licensing, and distribution, are listed below. Each of these different license types requires different sets of documents with an addition of what is also required by the state of New York's Office of Cannabis Management and Adult Use License Types.
- Adult-use Cultivator
- Adult-use Nursery
- Adult-use Processor
- Adult-use Distributor
- Adult-use Cooperative
- Adult-use Micro Business
- Adult-use Retail Dispensary
- Adult-use On-site Consumption
- Adult-use Delivery
- Registered Organization Adult-use Cultivator Processor Distributor Retail Dispensary
- Registered Organization Adult-use Cultivator Processor Distributor
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| City of Manhattan | |
|---|---|
| City population in 2019 | 1,621,897 |
| Basic Demographic Information | |
| Resources include the US Census Bureau, City-Data.com, and any additional relevant resources. | |
| Total # of Counties | 57 |
| Total # of Cities/Towns | 1,530 cities, towns, and villages, and 1,185 special districts |
What is the application process for a New York State Cannabis License?
1. Pre-application:
- Research and gather information about the specific requirements and regulations for the license type you are pursuing.
- Develop a comprehensive business plan that outlines your goals, strategies, and financial projections.
- Identify potential partners or investors who can bring valuable expertise and resources to your venture.
2. Application submission:
- Complete the application form accurately and thoroughly, ensuring that all required documents and supporting materials are included.
- Pay attention to detail, as complete or correct submissions can lead to delays or rejection.
- Apply within the specified timeframe and comply with additional requirements, such as background checks or financial disclosures.
3. Review and evaluation:
- Once your application is submitted, it will undergo a thorough review and evaluation process by the relevant regulatory authorities.
- This evaluation process may include interviews, site visits, and assessments of your business plan, financial viability, security protocols, and compliance with legal requirements.
4. Approval and licensing:
- If your application is approved, you will receive your New York State Cannabis License.
- It's important to note that the licensing process may take time, and there might be limitations on the number of licenses issued, depending on the license type and the specific region.
Real Estate & Zoning
Consideration for regional and local zoning will affect New York Cannabis licensing options, particularly with regard to allowed proximity to certain business types, schools, and other prohibited areas which may apply. The end of an opt-out period for New York localities that wanted to ban either recreational marijuana sales or local consumption lounges. The state is in the process of releasing an adult-use municipality map for towns and cities that have decided to opt-in or opt-out. Applicats must be a resident of New York, including business partners of the company and must be democratically controlled under a limited liability company or partnership. State officials are leaning toward not requiring New York Cannabi License applicants to have possession at the time of application, however, a letter of intent from a landlord.
Business Climate
The state has eagerly embraced the formal legalization of cannabis for both medical and recreational use with few notable exceptions.
New York ranks near the bottom nationally with many barriers to entry for businesses. Despite challenges related to taxation and regulatory compliance, the state offers access to a strong consumer base that possesses significant disposable income and higher than average per capita wealth.
Compliance and regulations for operating a cannabis business in New York State
Operating a cannabis business in New York State requires strict adherence to compliance and regulatory measures. The state has implemented comprehensive regulations to ensure the safe, responsible, and legal operation of cannabis businesses. Some of the critical compliance and regulatory aspects to consider include:
1. Product testing and quality control: All cannabis products must undergo rigorous testing to ensure safety, quality, and accurate labeling. Compliance with testing requirements is crucial for consumer trust and regulatory compliance.
2. Inventory tracking and reporting: Implement robust inventory tracking systems to monitor and report all cannabis-related activities accurately. This includes tracking cultivation, processing, distribution, and sales in real-time.
3. Security protocols: Establish stringent security measures to protect your cannabis business, products, employees, and customers. This includes physical security systems, video surveillance, access control, and employee background checks.
4. Packaging and labeling requirements: Comply with specific packaging and labeling requirements set forth by the state. This ensures that consumers receive accurate information about the product's contents, potency, and potential health risks.
5. Employee training and education: Provide comprehensive training and education to your employees regarding compliance, safety, and responsible cannabis use. This helps ensure a knowledgeable and accountable workforce to assist customers and maintain compliance.
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- Private Label Manufacturing
- Micro-Grow Franchising
- Human Resources
Frequently Asked Questions
How many of each license type will be available for this application window?
Pursuant to its powers under § 10 of Cannabis Law, the Cannabis Control Board (Board) has the discretion to limit the number of licenses for each type of license issued.
In addition to AUCC and AUCP licenses that are eligible for transition, the Office estimates that over 1,000 licenses in the licensing application window opening on Wednesday, October 4, 2023, including provisional and final licenses may be issued. These estimated allocations include:
• Retail Dispensary: 500 – 1000
• Microbusiness: 220
• Indoor Cultivation (Tier 1): 20
• Indoor Cultivation (Tier 2): 20
• Processor (Type 1: Extracting, plus all activities of Types 2 and 3): 55
• Processor (Type 2: Infusing and blending, plus all activities of Type 3): 100
• Processor (Type 3: Packaging, labeling, and branding, including for the performance of white labeling agreements only): no allocation limit, Office will review on a rolling basis
• Distributor: 30
What are the components of the cannabis license applications?
The cannabis license applications contain general questions about your business, ownership, participation in workforce or training programs offered by the Office, premises, and operating activities.
If you are applying as a Social and Economic Equity (SEE) applicant, you will have additional questions and documentation to upload. The SEE application section collects information from applicants seeking to determine whether the applicant is SEE-qualified. More information about the SEE program is available on the Office’s website, and additional information on the SEE application section is available in the “Social and Economic Equity” section below. .
Information about your True Parties of Interest (TPI) will be collected via your applicant entity disclosure in the TPI Portal. This is a separate process that can only be completed once your cannabis license application has been submitted. After submitting your application, you will receive an email with a link to the TPI Portal to complete this step. More information about TPI and the TPI disclosures is available in the “How to Complete the Application” section below and at the TPI Guidance.
All applicants must submit proof of control over a proposed premises to complete the application and be considered for a final license, except applicants for retail dispensary and microbusiness licenses.
Will New York have a social equity program for licensing?
Yes, New York will have a specific percentage of licenses allocated for eligible applicants meeting the requirements for social and economic equity. The exact requirements for eligibility are yet to be determined. The Office of Cannabis Management will create a social and economic equity program to ensure the inclusion of small businesses and communities disproportionately impacted by drug enforcement.
Can I apply for more than one cannabis facility license?
Yes, New York will allow owners and interest holders of facility licenses to apply for additional licenses to a limitation. Fully vertical operations are not permitted under New York’s adult-use legislation. Retail owners can have ownership or financial interest in three total retail cannabis licenses. Other production based licenses can have ownership within the supply chain but cannot also hold ownership or financial interest in an adult-use retail cannabis license within the state.
How do I prove that I have control over a premises location requirements?
You can prove that you have control over a premises by uploading an executed deed if you own the property, or by uploading an executed lease agreement if you are leasing the property. These documents must outline all common terms associated with a lease agreement and must show that the applicant possesses or has the right to use sufficient land, buildings, and other premises as specified in the application to properly carry out the activities for which a license is sought.
What are the application windows for each license type?
The application window for the cultivator, processor, distributor, retail dispensary and microbusiness licenses will open on Wednesday, October 4th, 2023. The application window will close on Monday, December 4, 2023, at 5:00PM Eastern Time. To be considered, all applications must be submitted before 5:00PM on December 4, 2023.
For retail dispensary and microbusiness applicants that are applying with proof of control over the proposed licensed premises, there will be an expedited application window that will close on Friday, November 3, 2023, at 5:00PM Eastern Time. The Office will begin the review of applications submitted during this window to expedite the review of retail dispensary and microbusiness applications. The retail dispensary and microbusiness application window will remain open after November 3, 2023, until December 4, 2023, for applicants that apply after November 3, or are applying for a provisional license (without proof of control over the proposed licensed premises). You can submit a provisional license retail dispensary or microbusiness application anytime during the open application window.
Applicants who are not issued a license in this application window, must resubmit an application to be considered in a future application licensing window.
How will scoring be used in application review?
The application window opening on Wednesday, October 4, 2023 will not be using a scoring process to determine which applicants are issued a license but rather a random order “queuing” process. More information on this random order queuing process is available in Question 10 above. Applicants must meet all eligibility criteria and submit a complete application to be issued a license.
Please note, that the Board may create applications with competitive or scored elements in future application windows.
What are the fees to apply for a license?
Applications require payment of a non-refundable $1,000 application fee, except for applicants applying as SEE, which require payment of a non-refundable $500 application fee. Per the regulations, SEE applicants receive a 50% reduction in application and licensing fees. If an applicant applies as a SEE but is unable to provide the required documentation to prove SEE status, the applicant will not be considered for licensure in this application window.
Should provisional CAURD licensees apply for an adult-use retail dispensary license?
Due to the pending litigation challenging the validity of the CAURD program, provisional CAURD licensees may want to apply for an adult-use retail dispensary license during this application window. Applicants should apply with the business entity that will operate the license. If this business entity is different than the entity that applied for under the CAURD program, the Office will request additional information to support the change from the CAURD entity on file with the Office.
Applicants must submit their CAURD application number as supplied by the Office in their complete format, with all dashes, letters, and numbers for proper identification. Please note, a provisional CAURD licensee will not be issued two licenses if they are selected and able to move forward under the CAURD program and the general licensing process.
Additionally, such applicants will have to pay the $1,000 non-refundable application fee to complete submission. Applicants who qualify for SEE will be eligible for a 50% reduction in application and licensing fees. The Office is actively exploring options for waiving future licensing fees for eligible CAURD licensees.
Don't Know Where To Begin? Get Started Now
Looking to apply for a New York Cannabis License and unsure where to start?
The Office of Cannabis Management is still in the process of issuing regulations to establish the New York Cannabis License application process for all license types. Before the issuance of this application process, teams who are serious about approaching this process should develop their internal structure and build out their business plans. Our team at Cannabis License Experts can assist in this early development phase all the way through final New York Cannabis License application, setting your team up for success.
In order to get started, reach out to one of our regulatory experts today to learn more about Cannabis Business Solutions.
