New York Cannabis Licensing, Part 2: The Application Process

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New York Cannabis Licensing, Part 2: The Application Process

Finally, the spot all potential cannabis applicants in New York have been waiting for: an explanation of the license application process under the Marihuana Regulation and Taxation Act (MRTA).

We ask you to contain your enthusiasm: While the MRTA provides a framework for the license application process, the actual license application (including the license fee) is prepared by the Cannabis Control Board (CCB). When? Hopefully in the next few months. The MRTA requires the CCB to submit its first annual report by January 1, 2023, which means that the MRTA is considering selling cannabis in 2022.

Instead of going through the relevant provisions section by section, we found it helpful to answer the questions that every potential applicant has already asked. Here you are:

Where can I get a license application?

From the Office of Cannabis Management (OCM). In the end. As we have stressed repeatedly, the CCB will establish the rules and regulations for licenses for adult use, including the form of the license application. The OCM is responsible for managing the application process.

What information is required for a license application?

The MRTA requires that the following information be included as part of the application created by the CCB (as well as anything else the CCB suggests):

  • Information about the applicant’s identity, including racial and ethnic diversity. Although not specifically discussed, we will assume this includes information about individuals who have an ownership interest in the applicant if the applicant is a company (which we strongly recommend for almost any licensee).
  • Property and investment information for company applicants, including a detailed explanation of the applicant’s corporate structure.
  • Proof of good moral character, which we believe will require criminal background verification in accordance with the article on the general provisions of the MRTA.
  • Fingerprints for the applicant (clients, officers, directors, etc. if it is a company).
  • Information about the premises that will be licensed.
  • Annual accounts for the applicant.

Is there a license fee?

A review of the license fee is required for the license application. So it’s safe to say that a license fee is required. However, we do not know what the license fee will be for the different license types.

The license fee is determined by the CCB. Interestingly, the MRTA provides that the license fee can be based on the cultivation and / or production volume, whereby a graduation of the license fees is implicitly considered.

Another entertaining recording: the CCB also has the right to charge a biennial license fee (after the initial license is issued) based on the amount of cannabis grown, processed, distributed and / or dispensed by the licensee (if applicable) or Gross annual income of the licensee for the previous license period.

What are the selection criteria?

At least and everything else the CCB adds in the context of issuing the industry rules and regulations:

  • Whether the applicant is a social and economic justice applicant.
  • The applicant’s ability to demonstrate effective controls against the illegal diversion of cannabis.
  • The applicant’s ability to comply with applicable state laws and regulations.
  • The ability of the applicant and his officials to properly carry out the activities for which a license is sought, including, where appropriate, with the support of the Social and Economic Justice Program and Business Incubators.
  • Whether the applicant has or has leased sufficient land, buildings and equipment to carry out the activities described in the application, or whether they are planning to do so if they qualify as a social and economic justice applicant.
  • If it is a claimant for non-social and economic justice, whether that claimant is making a plan for the benefit of communities and people disproportionately affected by enforcement of cannabis laws.
  • Whether it is in the public interest that the applicant be granted a license.
  • Whether the applicant and its directors are of good moral character and have no ownership or control of more licenses or permits than permitted by the MRTA.
  • Whether the applicant has concluded a collective agreement.
  • The applicant’s plan to contribute to communities and people who are disproportionately harmed by enforcement of cannabis laws.
  • For applicants of cultivators or processors for adults, the environmental and energy effects of the facility to be licensed are important.

Who evaluates license applications?

The OCM performs the initial assessment of each application and presents its recommendation to the CCB. If the CCB is not satisfied with an application, the Executive Director of the CCB must inform the applicant of the specific reasons for the rejection. An administrative complaint procedure has not yet been initiated, but the general provisions of the MRTA allow a rejected applicant to lodge a complaint under an Article 78 procedure.

How long is the license period?

All initial licenses have a term of 2 years.

Can a license be renewed?

You can do this after submitting a renewal application to the OCM and paying a renewal fee. Renewal requests are made at least 90 days before the existing license expires.

In addition to requesting information that we expect to match the original license application, renewal applicants must also:

  • Before renewing a license, submit documentation about the racial, ethnic, and gender diversity of the licensee’s owners and employees.
  • Provide evidence that the licensee carried out their plan for the benefit of communities and individuals disproportionately affected by cannabis law enforcement, as described in the licensee’s original application.
  • Maintaining a labor peace agreement with a bona fide labor organization (maintaining such an agreement is an essential requirement for licensing).

Can a license be transferred?

Yes, but not without the approval of the CCB. Transfers and changes to the underlying license information, such as B. Change of ownership, significant changes to the licensee’s corporate structure and changes to the licensed locations require the approval of CCB. Changes without CCB approval will result in the suspension, revocation or cancellation of a license.

The big takeaway from the adult MRTA licensing requirements is that applicants need to cover many basics before submitting an application. As we are all eagerly awaiting the publication of the rules and regulations by the CCB, we will continue our series on the MRTA here on the law Law Blog and provide regular updates on developments in the New York cannabis industry. Stay tuned!