Under the Marijuana Regulation and Taxation Act (“MRTA”), a new government entity was created to license the cultivation, processing, distribution, sale, and delivery of cannabis in New York State. Each commercial activity involving adult-use cannabis will require a license. Accordingly, because the law generally limits (1) vertical integration and (2) the number and type of licenses that a person may hold, businesses will have to seriously consider which license type best serves their goals, interests, and abilities.
The regulations governing the application process have not yet been adopted, though, because key positions in the Office of Cannabis Management (“OCM”) and the Cannabis Control Board Once (“CCB”) have not been filled. After its members are appointed, the CCB will develop and implement the rules governing the application process. The regulations will address what is required for each license type, and what factors will be considered in evaluating such applications.
At minimum, though, license seekers can expect the application to ask questions regarding an applicant’s: “significant presence” in NYS (e.g., incorporation in NYS, or having a majority of owners as residents of NYS); identity (including racial and ethnic diversity questions for social equity purposes); ownership (including investor and corporate structure information); financial information; moral character (including fingerprinting); and the premises at which the business will operate. In considering license applications, the CCB will consider whether the applicant entered into a labor peace agreement with a labor organization to represent the applicant’s employee and whether the applicant proposes a plan to benefit communities and people disproportionally impacted by enforcement of cannabis laws. The CCB will also consider the number of licenses already issued in a given area in determining whether to grant a license application.
If you have questions about the MRTA, the various license types, how you can comply with it, or what your business or local government can do under the law, contact an experienced attorney for help. The Zoghlin Group offers a range of legal services relevant to the emerging cannabis industry.
For inquiries related to Cannabis/Marijuana Law, and other Municipal Law issues, please contact Jacob H. Zoghlin, Esq. at The Zoghlin Group, PLLC.
The MRTA also requires retail dispensaries to be located in a storefront and to have a principal entrance from street level on a public thoroughfare.
Other license types are also available under the MRTA — such as “Cooperative Licenses” and “Registered Organization Adult-Use Cultivator Processor Distributor Retail Dispensary Licenses” — but will not be covered in this blog post.
To be a social and economic equity applicant, under the MRTA, the applicant must be from either a community disproportionally impacted by enforcement of cannabis prohibition, a minority-owned business, a woman-owned business, a disadvantaged farmer, or a service-disabled veteran. Social and economic equity applicants and licensees will have access to counseling, education, small business coaching, and compliance assistance from the state. This will facilitate the growth and development of adult-use cannabis businesses by qualified social and economic equity applicants. To further promote social and economic equity, the CCB is also authorized to prioritize applicants who have an income lower than eighty percent of the median income in the county where the applicant resides, are member of a “community disproportionately impacted by the enforcement of cannabis prohibition”, or were convicted or are related to someone convicted of cannabis related offenses.
As of the date of this blog post, Cannabis remains illegal under federal law.
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