What We Know About Cannabis in NY (so far)
Adult-use cannabis was legalized in New York in 2021, and the state’s first legal dispensary opened in December 2022. But from 2021 legalization to the commencement of recreational sales, New York operators have been hit with a barrage of regulatory changes regarding how the state will handle its newly minted market.
However, the Empire State seems like it’s gotten closer to enjoying a stable legal industry: one that provides attainable opportunities for brands and businesses to profit and thrive.
If you’re looking to join New York’s legal cannabis market on the ground, there are a few regulations and processes you’ll want to familiarize yourself with to ensure you enter the space with compliance as an obvious priority.
New York’s adult-use cannabis regulations for operators
The Marijuana Regulation and Taxation Act (MRTA) legalized adult-use cannabis in New York. Since its passage, the New York State Office of Cannabis Management (OCM) has worked to establish a regulatory framework that addresses public health and safety, allows for economic development, and doesn’t ignore the need for social equity within the industry.
The state’s market has experienced a few delays and levels of uncertainty since MRTA passed, and as a result, operators have had to adjust their applications on the fly to meet new guidelines. But things seem to have solidified since November 2022, when the OCM approved the beginnings of concrete regulations for Conditional Adult-Use Retail Dispensaries (CAURD).
CAURD licensees are New York’s first retail dispensaries to open for legal adult-use business in the state – beginning with Housing Works Cannabis Co., which opened at the end of 2022, and Smacked, which opened in late January 2023.
CAURD application requirements
So far, the state has granted 66 CAURDs to eligible cannabusinesses. To qualify for this early-industry license, your business has to meet the following requirements:
- At least thirty percent of the applicant entity must be owned by an individual who is “justice-involved” – a.k.a., someone who has convicted of a cannabis-related crime in New York before March 31, 2021, or someone whose parent or domestic partner has been convicted of a similar crime.
- The applicant must have qualifying business experience (two years of profit, owned and controlled by a justice-involved individual throughout those two years).
If you want to qualify for a nonprofit business – where 25 of the CAURD licenses will be designated to go – at least thirty percent of the applicant entity must be owned by a qualifying nonprofit with:
- A history of creating vocational opportunities for current or formerly-incarcerated people.
- A history of intentionally serving current or formerly-incarcerated people.
- At least one “justice-involved” board member, officer, governing committee member, or advising committee member.
- At least five full-time employees.
- A social enterprise operation with net assets or profit for at least two years.
- Sole control of the applicant.
- Significant presence in New York State – a.k.a., at least thirty percent of dispensary ownership must also have residency, assets, real property, a bank account, or some other tangible connection with the state.
CAURD application process
If you think you meet New York’s requirements for a CAURD license, it’s time to start filling out your online application. Many businesses hire a lawyer or some type of legal team for the process to ensure that everything is done correctly – after all, it would be deflating to invest time and $2,000 into an application that is doomed to be rejected.
You can find the details of the CAURD license application process on the state’s website. Still, in general, these are the items you’ll want to gather to begin the journey:
- Evidence of justice involvement – or relations to a justice-involved individual.
- Documents that highlight your two years of net profits.
- Documents that prove significant presence within New York State (like bank accounts, tax filings, property ownership or leasing documents, etc.).
- A business plan
There will be other, more specific requirements you’ll need to provide once you dig into the meat of the application, but gathering the above is a great place to start.
Once your CAURD application has been submitted, you’ll have to wait twelve months to complete the remaining application requirements before the license is approved – like submitting fingerprints, notifying your local municipality of the potential licensure, and more.
New York State’s adult-use market potential
Although there are quite a few hoops to jump through to legally sell cannabis in New York State, it might just be worth it for anyone looking to make a real impact on the industry. New York is projected to earn around $1-1.2 billion in retail sales by the end of 2023, and the market is estimated to grow to $2.2-$2.7 billion by 2026. There’s a lot of room for market success – and resulting national influence – in those numbers if you’re planning to apply for a New York canna-license.
If you’re a cannabis professional in New York or wish to join the booming industry, you won’t want to miss Lucky Leaf Expo Albany. Learn more about this engaging business-to-business conference and trade show here!