10 Updates on New York’s Cannabis Market
By Charles Alovisetti, Michelle Bodian, Brandon Kurtzman
Jan 18, 2022
March 31, 2022 will mark the first anniversary of former Gov. Cuomo’s signing of New York’s cannabis legalization legislation, the Marihuana Regulation and Taxation Act (MRTA). What has changed since then? And do we know more now than when the only information at hand was the language of the newly passed bill?
While we still don’t have draft or final regulations, applications, or a definitive timetable, plenty of new information has come out since legalization. Read on for 10 key updates about New York’s market from the past year.
1. Cannabis Control Board (CCB) and Office of Cannabis Management (OCM) Stood Up
All five members of the CCB, which is in charge of the creation and implementation of the OCM, have been appointed, as has the OCM's Executive Director and Chief Equity Officer. In addition, the Executive Director has appointed a range of individuals to specific positions within the OCM.
Chair of CCB: Tremaine Wright
Members of CCB: Tremaine Wright, Adam Perry, Jen Metzger, Reuben McDaniel III, Jessica Garcia
Executive Director of OCM: Christopher Alexander
Chief Equity Officer: Jason Starr
2. New York’s OCM Held Several Meetings
The OCM began holding meetings. You can view recordings of these below:
3. Existing Medical Operators Permitted to Sell Whole Flower
On October 5, 2021, the CCB added whole flower products as an approved form of medical cannabis. Other changes to the medical program included:
Permanently waiving the patient and caregiver $50 registration fee
Streamlining the approval for facilities such as hospitals, residential facilities, and schools to become designated caregiver facilities to hold and dispense products for patients
Increasing the amount of approved medical cannabis that may be dispensed to a certified patient or designated caregiver from a 30-day supply to a 60-day supply
Expanding the types of eligible clinical providers able to certify patients to any practitioner who is licensed to prescribe controlled substances in New York State—including dentists, podiatrists, and midwives
4. Changes of Ownership Control Are Being Approved
Ascend Wellness’s investment into MedMen—one of the ten existing medical operators called Registered Organizations—was approved on December 16, 2021. This transaction predated the effective date of the MRTA and had been pending before the Department of Health. While the transaction did not close for reasons unrelated to the OCM, it’s useful to know that it’s now possible to get deals done in New York.
5. $200 Million Public-Private Fund Created to Support Social Equity Licensees
One of the persistent challenges of social equity programs has been financing businesses owned by individuals who may lack both the means to bootstrap a new cannabis company and the connections necessary to raise outside capital.
To create opportunities for those from historically marginalized communities, Gov. Kathy Hochul announced the creation of a $200 million public-private fund to support social equity applicants. This fund will be seeded with licensing fees and tax revenue. As a comparison, Los Angeles’s Social Equity Entrepreneur Development Grant Program has been dedicated $6 million to date. Further details are needed to understand how and when social equity licensees will be able to access these funds.
6. Final Hemp Regulations Published
New York’s cannabinoid hemp regulations were adopted on November 24, 2021, and the Department of Agriculture and Markets is now accepting applications for those interested in growing hemp. You can also apply with the OCM for a Cannabinoid Hemp Retail License or Cannabis Hemp Distributor Permit. Proposed changes to the cannabinoid hemp regulators have also been filed for public review and comment with the OCM. The comment period ends March 7, 2022.
7. Local Opt-out Deadline Passed
The MRTA provided municipalities until December 31, 2021 to opt out of permitting retail dispensaries and on-site consumption lounges, or both. This date has now passed and 42% of municipalities took the appropriate steps to opt out of retail dispensaries and 48% of municipalities took the appropriate steps to opt out of on-site consumption lounges.
Municipalities that opted in may pass local laws and regulations governing the time, place and manner of the operation of retail dispensaries and on-site consumption sites, provided such laws or regulations do not make the operation of such businesses unreasonably impracticable, as determined by the CCB.
8. New Amendments Were Filed
We’ve already seen several bills introduced to amend the MRTA:
A bill to permit licensed cannabis companies to deduct ordinary business expenses on their state tax returns
A bill introduced by Sen. Jeremy Cooney that would qualify transgender and non-binary people as social equity applicants
A second bill introduced by Sen. Jeremy Cooney that would qualify gay, lesbian and bisexual people as social equity applicants
9. NYC Office of Cannabis Business Services Proposed
A bill was introduced into the New York City Council to establish an Office of Cannabis Business Services. It’s currently in committee.
10. Public Timeline Updated
Finally, we now have public remarks from Tremaine Wright about the expected timeline of implementation. The OCM aims to issue draft regulations in the first quarter of 2022, with a two-month public comment period. Only once the regulations are final would applications become available. Once the regulations are out, the CCB has suggested an aggressive 18-month schedule to complete the licensing process.
Register for our “Tri-State Cannabis Implementation Update” live session on Thursday, January 20 for a deeper dive and be sure to sign up for Tri-state cannabis email updates.