Now that the Marijuana Regulation and Taxation Act (MRTA) is (almost) law, the most common (really only) question we get on the law Law Blog is: What do I have to do to get a license? The answer lies in the hands of the Cannabis Control Board (CCB), a newly established governing body that will oversee the also new Office of Cannabis Management (OCM). As the CCB will be responsible for the implementation and regulation of the New York cannabis industry, our series on the specific components of the MRTA begins with an in-depth look at the CCB and its powers and responsibilities.
What is the CCB?
The CCB is the government agency charged with creating and regulating the New York cannabis industry. The CCB consists of 5 board members, 3 of whom are appointed by the governor and 2 by the senate and the assembly (1 each). The chairman of the CCB is appointed by the governor with the advice and approval of the Senate. CCB members are appointed for a three-year term and must be New Yorkers and residents.
One key point: the composition of the CCB will be geographically and demographically representative of the state and communities that have historically been prosecuted for marijuana crimes. Its headquarters are in Albany, with offices in New York City and Buffalo (beginning). It is clear that the CCB will focus on the impact of the cannabis industry from a statewide perspective, not just New York City.
What are the responsibilities and authorities of the CCB?
Basically, the CCB’s job is to create the New York cannabis industry from scratch. Among his enumerated powers:
- Limit (or not limit) the number of registrations, licenses, and permits for each class to be issued in New York or in a political subdivision (ie, parish) in New York. In plain language, the CCB determines both the number of licenses issued and whether the licenses issued for a geographical area are limited.
- Creation of the standards and requirements for the following categories of licenses for medical cannabis, cannabis and cannabis products for adults and cannabinoid hemp and hemp extract:
- Marketing and sales; and
- For cannabinoid hemp and hemp extract, the ability to regulate auxiliary substances and the type, shape and concentration of products that can be manufactured and / or processed.
- Prescribing the form of registration applications (Medical Cannabis Organization), licenses and permits, and reports as deemed necessary by the CCB.
- Grant or denial of registration, license or permission.
- Establishing the minimum criteria for the certification of employees to work in the cannabis industry in positions that require further training.
- Approval of price quotas or price controls established by the Executive Director of the OCM.
- Approval of the OCM’s social equity plan.
- Reviewing the impact of licenses two years after the first retail sale to determine if licensees have significant market share that undermines social justice objectives and to prevent dominant participation.
What do we know about the registration, licensing and approval process based on the powers of the CCB?
We are currently not aware of the details beyond the types of licenses issued. However, based on the requirements of the Social and Economic Justice Program, the required composition of the CCB, and the enumerated mandates of the CCB, we can make an educated guess about the following:
- New York is serious about running a successful social and economic justice program. 50% of the licenses will be used for social and economic justice applications, and the OCM and New York City’s Urban Development Corporation will provide low or zero interest loans to qualified social and economic justice applicants. The CCB will also appoint a Chief Equity Officer who will be responsible for establishing a public education program aimed at providing cannabis-banned communities with information about the licensing process and the resources the OCM provides to social and economic justice applicants can provide.
- Geographic diversity is taken into account when determining the number and terms of licenses. Between the requirement that the CCB’s membership be geographically representative and the explicit power to limit the number of licenses by region, it is evident that the CCB is being encouraged to literally distribute licenses.
- An applicant’s ability to demonstrate safety and product tracking skills is an essential part of evaluating applicants. The MRTA directs the CCB to implement rules and regulations designed to: (i) prevent the sale of adult cannabis to minors, including changing tobacco vapor products for use with cannabis; (ii) preventing the diversion of cannabis from New York to other states and vice versa; and (iii) prevent cannabis products legal under the MRTA from being used as cover for illegal drug trafficking or other illegal activities.
When will the CCB begin creating and implementing the rules and regulations for the New York cannabis industry?
To date, no specific timeframe has been announced for appointing members to the CCB, the other MRTA-authorized advisory boards, or filling positions within the OCM. Here’s what we know: The MRTA requires the CCB to produce an annual report on the effectiveness of the MRTA, with the first report due by January 1, 2023. By definition, the deadline for the CCB’s first annual report implies that registrations are required, licenses and permits will be issued early enough for sales to begin in 2022. Accordingly, it would be surprising if details of the registration, licensing and approval processes were not published in this calendar year.
What is the OCM and how does it differ from the CCB?
The OCM is effectively responsible for the administration of the New York cannabis industry. For example, the OCM is responsible for prescribing the actual application forms for licenses and permits and submitting completed applications (and recommendations) to the CCB for a final decision on the application in question.
What else should you know about the CCB?
The overall point is that the CCB will create and regulate the New York cannabis industry. While we are all waiting for details, the MRTA gives us a good idea of what priorities the CCB will prioritize in creating and implementing a framework for the legal marijuana industry in New York.
Visit the law Law Blog for our next MRTA recap, live from our New York office. If you have any questions, please do not hesitate to contact us.