New York Marijuana Microbusiness License

What Is a Marijuana Microbusiness in New York?

A microbusiness is a cannabis establishment that is constrained in terms of size and operation. The New York Marijuana Regulation and Taxation Act (MRTA) permits some businesses with less access to capital to join the legal cannabis market by applying for a micro-license that allows for small-scale manufacture, sale, and delivery.

Does New York License Marijuana Microbusinesses?

The Cannabis Control Board (CCB) will issue a microbusiness license to a cannabis establishment that qualifies, for the purposes of acting as a cannabis producer for the cultivation of cannabis, a cannabis processor, a cannabis distributor, and a cannabis retailer. A microbusiness license authorizes the limited cultivation, processing, distribution, delivery, and sale of the microbusiness' own adult-use cannabis and cannabis products.

The size, scope, and eligibility of cannabis microbusinesses will be determined by the Cannabis Control Board. Per the MRTA, the CCB will issue licenses to microbusinesses in a manner that promotes social and economic equity applicants. According to the MRTA, the board of directors of the CCB, in collaboration with the executive director and the chief equity officer, will establish the size, scope, and eligibility requirements for a microbusiness under regulation.

How to Apply for a Marijuana Microbusiness License in New York

Marijuana microbusiness licenses will be issued by the Office of Cannabis Management (OCM), a newly established agency within the MRTA. Prior to issuing licenses, the Office of Cannabis Management must develop and adopt rules to carry out the state's cannabis legislation. As a result, the application process for cannabis microbusiness licenses and associated timelines remain uncertain.

While the OCM is not currently accepting new license applications, some criteria and requirements are already included in the MRTA. For example, the MRTA mandates that applicants for cannabis distribution licenses be at least 21 years of age. Furthermore, licenses must be renewed every two years.

Additionally, the MRTA requires the OCM to establish rules outlining the conditions for granting a license to an application, which may include, but is not limited to the following:

• The applicant is considered a social and economic equity applicant.
• The applicant will be able to effectively regulate illegal cannabis trafficking.
• The applicant agrees to comply with all applicable federal, state, and local laws and regulations.
• The applicant and its representatives are prepared, willing, and capable of conducting the activities for which a license is requested.
• The applicant either owns or has the right to use sufficient land, buildings, and equipment to conduct the activity specified in the application correctly, or has a plan to do so if they qualify as a social and economic equity applicant.
• The applicant either meets the criteria for social and economic equity or shows a commitment to assisting communities and people who are disproportionately impacted by cannabis law enforcement.

As part of the MRTA, New York included the idea of social and economic equity to guarantee that members of minority groups who have been disproportionately impacted by cannabis prohibition benefit from legalization. The effort for social and economic equity aims to help people such as women-owned businesses, struggling farmers, and wounded veterans, in acquiring lucrative licenses. These benefits might include the possibility of having their application expedited; priority or exclusive access to specific classes or categories of license; priority access to particular markets; fee reduction or deferral; and access to low- or no-interest financing.

Applicants and licensees who participate in the social and economic equity program will also receive counseling, small business coaching, and compliance assistance from the state to help them start and develop a cannabis microbusiness.

Additionally, applicants who are members of a community disproportionately impacted by prior cannabis prohibition enforcement, who earn less than 80% of the county's median income, who have been convicted of a marijuana offense, or who have a close family member who has been convicted, will be given preference. Overall, about 50% of cannabis business licenses will be granted to applicants from communities affected by the enforcement of cannabis prohibition.

For applicants considered by New York as social and economic equity applicants, licenses cannot be transferred or sold during the first three years after issuance, except to another social economic equity applicant following the receipt of express written permission from the CCB. After the three-year period, a social and economic equity applicant may transfer or sell its license, provided that such intention is communicated to the CCB and the licensee repays any outstanding amount on loans provided by the Board.

The New York MRTA advises that an application for a microbusiness license be granted in the public interest, taking into account the following factors, but not limited to:

• The quantity and kind of cannabis licenses in the applicant's local vicinity, as well as across the municipality or subdivision thereof.
• That marijuana cultivation, processing, transportation, distribution, and sale for adult use are privileges, not rights.
• Evidence that all necessary licenses and permits have been received or will be obtained from the state and any other applicable regulatory authorities
• The license's impact on pedestrian and vehicular traffic, as well as parking, in the areas close to the site.
• The site's existing noise level and any extra noise generated by the proposed premises.
• Capacity to reduce adverse environmental effects such as water use, energy consumption, and carbon emissions.
• The effect on the availability and production of cannabis.
• Any other legal or regulatory considerations relevant to determining whether issuing a license is in the public convenience and benefit, as well as the community's public interest.
• The applicant and its management executives have good moral character and do not own or control more licenses or permits than the MRTA allows.
• The applicant has entered into a labor peace agreement with a genuine labor organization that is actively representing or trying to represent the applicant's workers, and compliance with the labor peace agreement's provisions is a significant condition of licensing. When considering applications from businesses with 25 or more workers, the OCM must give preference to applicants who are parties to collective bargaining agreements with bonafide labor organizations in New York or another state and who use union labor to build their licensed premises.
• The applicant will contribute to communities and people disproportionately impacted by cannabis law enforcement and will promote these efforts via the OCM.

Additionally, the application must satisfy any extra OCM criteria; and, if the applicant is a registered organization, the applicant must show the establishment's continuing efforts toward producing, distributing, and/or researching medical cannabis in preparation for certification.

Applicants for cannabis microbusiness licenses must have a "significant presence" in New York, according to Section 3.1 of the MRTA. Corporations and legal entities must adhere to the following standards:

• Their headquarters are in New York.
• Be incorporated (or otherwise established) in conformity with the applicable New York State laws.
• Have a high percentage of New Yorkers included in their ownerships.

Section 62.3 of the MRTA requires applicants to declare their applications are truthful under penalty of perjury. Furthermore, they should anticipate being asked for the following information:

• Race and ethnic origin
• Ownership and investment (including corporate structure)
• Demonstration of moral integrity (including fingerprinting)
• Financial statements

Note that certain local ordinances may apply and some approvals may be required at the county or municipal levels for a cannabis license application to be successful. The ordinances and approvals vary per the proposed location of the cannabis establishment. Hence, it is recommended that you research the specific regulations, permits, and approvals applicable to your locality before submitting your application to the OCM.

Per Section 76 of the MRTA, a cannabis license applicant in New York is required to inform the municipality in which the cannabis establishment will be situated of the intention to file an application for a cannabis license. The notification must be filed with the municipal clerk, not less than 30 days nor more than 270 days prior to submitting the state licensing application. The notification must follow the Cannabis Control Board's format.

If a local government offers an opinion in favor or against issuing the registration, license, or permit application, that view becomes part of the record on which the Office of Cannabis Management bases its licensure recommendation to the Cannabis Control Board. The Cannabis Control Board will respond in writing to the municipality with an explanation of how such a view was weighed in determining whether to grant or refuse the application.

Applicants who have had their applications denied may apply to the Cannabis Control Board for a review of the decisions in a manner that will be provided by the rules of the Board. You may keep up to date with the application window and timelines by regularly visiting the OCM website.

How Much Does a Marijuana Microbusiness License Cost in New York?

The cost of a New York cannabis microbusiness license is unknown at the time. However, under MRTA, the cost is non-refundable but may be waived or reduced under certain conditions. Additionally, the fee may be determined by the volume of cannabis products involved in the business and other factors set out in Section 63.1 of the MRTA.

Can Marijuana Microbusiness Licensees Hold Other Cannabis Licenses in New York?

A cannabis microbusiness licensee in New York is not permitted to have an interest in or own any other adult-use license type. Microbusiness license holders may also not own more than one microbusiness license.