New York’s Conditional Adult Use Processor License

On the morning of the Cannabis Control Board’s (CCB) June 23, 2022 meeting, the Office of Cannabis Management (OCM) uploaded the meeting agenda, which included this important tidbit: a resolution approving a conditional adult-use processor license and opening an application window for said license. This is obviously big news, in that it provides the link between the already issued conditional cannabis cultivation licenses and conditional retail dispensary licenses.

In introducing the conditional process license resolution, CCB Chairwoman Tremaine Wright dropped another huge piece of news: the OCM expects adult-use sales to begin through conditional retail dispensary licensees in the fall of 2022. Adult use cannabis sales taking place in just a few months seems exceedingly optimistic, given that: (i) no conditional retail dispensary licenses have been awarded, (ii) DASNY just announced a management team for the Social Equity Cannabis Investment Program (more on that later); (iii) design-build contractors who submitted bids based on the conditional retail dispensary RFP have not been selected; (iv) the conditional retail dispensary locations have not yet been lease (as per CCB member Adam Perry during the meeting); and (v) retail store buildouts typically take more than a few weeks (especially in New York City).

With that said, more licenses being issued is a great thing and keeps the ball moving. So without further ado, some info on:

The conditional adult use processor license

Based on the legislation signed by Governor Kathy Hochul in February 2022 that created the adult use conditional cultivator license, the OCM is opening an application window for adult use conditional processor licenses.
The application window should be from June 28, 2022 through August 31, 2022.
Licenses will be limited to existing cannabinoid hemp processor licensees, who applied for such licenses before January 1, 2022.
Licensees will have the conditional license for 2 years, but will have the opportunity to transition to a non-conditional license, with 2 requirements:
Licensees must participate in a mentorship program for providing pathways for social equity participants; and
Licensees must participate in an environmental sustainability program.

A few other important announcements during the meeting:

Following up on Governor Hochul’s announcement on June 22, 2022, the CCB seconded the praise for the minority-led investment team that was selected to manage the $200m social equity fund.
The CCB approved an additional 41 adult-use conditional cultivator licenses.
The CCB affirmed Executive Director Chris Alexander’s recommendation of Damian Fagon for Chief Equity Officer.

All in all it was another productive meeting, but also another meeting without any announcement regarding the timing for the release for unconditional adult-use cannabis licenses. Stay tuned!

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