New York Marijuana Processing License

Does New York Require a Marijuana Processing License to Make Cannabis Products?

Yes. The Marijuana Regulation and Taxation Act (MRTA) contains provisions for several types of cannabis licenses in New York. One of such licenses is the Adult-Use Processor License which is a legal certification that authorizes the acquisition, processing, and sale of cannabis from the licensed premises of the adult-use cultivator to licensed distributors in New York.

According to the MRTA, cannabis processing includes the following practices:

• Branding
• Preparing cannabis products in any way
• Blending
• Extracting
• Infusing
• Packaging
• Labeling

As established by the MRTA, New York also issues two other types of licenses that allow the holders to distribute cannabis in the state: Registered organization adult-use cultivator processor distributor retail dispensary license and Registered Organization Adult-use Cultivator Processor Distributor license.

No person may own more than one processor license. A processor may also obtain a distributor license, solely for the distribution of their own products. Licensed cannabis processors may not own or have any interest in a license in the cannabis retail tier. However, the

Does New York Require Licensed Cannabis Processors to Have Cultivation Licenses?

No. New York does not require cannabis processors to also hold cannabis cultivation licenses. However, registered organizations may hold vertically integrated licenses (Registered Organization Adult-Use Cultivator Processor Distributor Retail Dispensary License or Registered Organization Adult-Use Cultivator Processor Distributor License) which affords them the same rights possible with Adult-Use Cultivation licenses.

How Does New York Classify Marijuana Processing Licenses?

Per the MRTA, there are currently no provisions for multiple categories or varying criteria for classifying cannabis processing licenses in New York. While the Cannabis Control Board (CCB) may implement certain rules regarding shared or single-use facilities, prospective cannabis establishment owners will have to wait for the final regulations to know the full limits or scope of the cannabis processing license.

What are the Different Types of Cannabis Processing Licenses in New York?

When it launched its adult-use marijuana market, New York allowed hemp processors to apply for, and obtain, its Adult-Use Conditional Processor license. This license allows them to manufacture and/or extract marijuana products as well as distribute them to licensed cannabis businesses in the state. However, license holders can only distribute marijuana products until June 1, 2023. After this date, any Adult-Use Conditional Processor licensee wishing to distribute recreational cannabis must obtain the state’s Adult-Use distributor license.

The Adult-Use Conditional Processor license is only valid until June 30, 2024. New York expects businesses with this conditional license to have converted it into a full license (Adult-Use Processor license).

Other than the Adult-Use Processor License, cannabis establishments in New York can only legally process cannabis in the state if they hold the Registered Organization Adult-Use Cultivator Processor Distributor Retail Dispensary License or Registered Organization Adult-Use Cultivator Processor Distributor License.

The Registered Organization Adult-Use Cultivator Processor Distributor Retail Dispensary License confers the same rights as those permitted to the adult-use cultivator, processor, distributor, and retail dispensary licensees. This license requires that the location of registered organization adult-use retail dispensaries be limited to three of the organization's medical dispensaries' and only authorizes the distribution of the registered organization's own products.

A Registered Organization Adult-use Cultivator Processor Distributor license also authorizes a registered organization to have the same privileges as the adult-use cultivator, processor, and distributor licensees.

Does New York Require a Separate License to Process Edibles?

There are no separate licenses for cannabis establishments manufacturing or processing cannabis edibles in New York. The state Office of Cannabis Management has not created a distinction between what types of cannabis products may be processed by cannabis license holders.

How to Get a Cannabis Processing License in New York

The Office of Cannabis Management (OCM), a newly created entity under the MRTA, will issue licenses for cannabis processing. Before the Office of Cannabis Management can issue licenses though, it must draft and approve regulations to execute the state's cannabis law. As a consequence, the application procedure and timelines for cannabis processing licenses remain unclear.

While the OCM is not accepting new license applications at the moment, the MRTA already includes certain criteria and requirements. For instance, the MRTA requires candidates for cannabis distribution licenses to be 21 years of age or older. Additionally, licenses must be renewed every two years.

The MRTA requires the OCM to adopt regulations defining criteria for determining whether to grant a license to an application, including but not limited to the following:

• The applicant may be regarded as a social and economic equity applicant.
• The applicant will be able to control illicit cannabis trafficking efficiently.
• The applicant will adhere to all relevant federal, state, and local laws and regulations.
• The applicant and the applicant’s executives are prepared, willing, and competent in carrying out the activities for which a license is sought.
• The applicant owns or has the right to use sufficient land, buildings, and equipment to carry out the activity specified in the application correctly, or has a plan to do so if they qualify as a social and economic justice applicant.
• The applicant satisfies social and economic equity requirements or demonstrates a commitment to helping communities and individuals who are disproportionately affected by cannabis law enforcement.

New York embraced the concept of social and economic equity as part of the MRTA in order to ensure that members of minority groups who have been disproportionately affected by cannabis prohibition benefit from legalization. The social and economic equality initiative seeks to assist people such as women-owned companies, struggling farmers, and injured veterans, in obtaining lucrative licenses.

Additionally, applicants 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.

The New York MRTA recommends that an application be granted a processing license in the public interest, considering the following criteria into consideration, but not limited to:

• That cultivating, processing, transporting, distributing, and selling marijuana for adult use are privileges, not rights
• The number and kind of cannabis licenses in the immediate area of the applicant's location, as well as throughout the municipality or subdivision thereof
• Evidence that all required licenses and permissions have been acquired or will be obtained from the state and any other regulatory bodies relevant
• Impact of the license on pedestrian and vehicular traffic, as well as parking, in the immediate vicinity of the site.
• The current noise level on the site and any additional noise produced by the proposed premises.
• Capacity to minimize negative environmental consequences such as water use, energy consumption, and carbon emissions.
• The impact on cannabis production and availability.
• Any additional legislative or regulatory considerations relevant to determining whether issuing a license will benefit the public convenience and benefit, as well as the community's public interest.
• The applicant and its management executives are of sound moral character and do not possess or control more licenses or permits than permitted by the MRTA.
• The applicant has signed into a labor peace agreement with a legitimate labor organization that is actively representing or attempting to represent the applicant's employees, and compliance with the terms of the labor peace agreement is a major condition of licensing. When evaluating applications from companies with 25 or more employees, the OCM must give priority to applicants who are parties to collective bargaining agreements with bona fide labor organizations in New York or another state and who construct their licensed facility using union labor.
• The applicant will make contributions to communities and individuals who are disproportionately affected by cannabis law enforcement and will publicize these efforts via the OCM.
• The application must also meet any additional requirements established by the OCM; and, if the applicant is a registered organization, the applicant must demonstrate the establishment's ongoing efforts toward producing, distributing, and/or studying medicinal cannabis in preparation for certification.

According to Section 3.1 of the MRTA, applicants seeking cannabis production licenses must have a "substantial presence" in New York. Corporations and legal entities are required to follow the following guidelines:

• They have their main offices in New York.
• Be incorporated (or otherwise formed) in accordance with the laws of the State of New York.
• Have a large proportion of their ownerships made up of New York residents.

Section 62.3 of the MRTA requires applicants to affirm, under penalty of perjury, that their applications are true. Additionally, they may expect to be contacted for the following information:

• Information on race and ethnic origin
• Information on ownership and investing (including corporate structure)
• Demonstration of moral integrity (including fingerprinting)
• Location information for the cannabis establishment
• 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 location. Hence, it is recommended that you research the specific regulations, permits, and approvals applicable to your locality before submitting your application.

According to Section 76 of the MRTA, a cannabis license applicant in New York must notify the municipality in which the cannabis facility will be located of their desire to file a cannabis license application. Prior to filing the state license application, the notification must be submitted with the municipal clerk no less than 30 days before and no more than 270 days in advance. The notice must adhere to the format established by the Cannabis Control Board.

If a local government expresses an opinion in support or opposition to the registration, license, or permit application, such opinion becomes part of the record upon which the Office of Cannabis Management makes its licensure recommendation to the Cannabis Control Board. The Cannabis Control Board will respond to the municipality in writing with an explanation of how such viewpoints were evaluated in deciding whether to grant or deny the application.

Applicants who have been denied in their applications can apply to the Cannabis Control Board for a review of such decisions in a manner to be provided by the rules of the Board. By checking the OCM website frequently, you can keep updated about the application window and timeline.

How Much Does a Cannabis Processing License Cost in New York?

The OCM charges a non-refundable $2,000 fee for the state’s Adult-Use Conditional Processor license. This fee covers both the cost of application and the license and must be sent by a personal or certified check or money order to:

Attn: Licensing Division

New York State Office of Cannabis Management

P.O. Box 2071

Albany, NY 12220