New York Cannabis Control Board Issues First CAURD Licenses and Votes to Publish Proposed Regulation Package

The New York Cannabis Control Board (the “Board”) held a public meeting on November 21, 2022, during which it approved a number of conditional license applications and voted to publish new and revised regulations for public comment. These approvals represent important steps forward in New York’s rollout of its adult-use legalization plans. In approving both the license applications and proposed regulations, the Board highlighted New York’s commitment to social and economic equity as principles underlying its regulatory scheme.

The state aims to begin adult-use cannabis sales by the end of this year. To this end, the Board has accepted applications for three different components of the supply chain: growing, processing, and cultivating. During last week’s meeting, the Board approved of measures granting eight applications for conditional cultivator licenses, and eight for conditional processor licenses. The application period for the third sector of the supply chain, Conditional Adult-Use Retail Distributors (“CAURD”), closed in September, and the Board received more than 900 applications. The Board voted to issue the first of New York’s CAURD licenses, to 29 business applicants and eight nonprofits, subject to the applicants’ submission of final application materials. Once these entities receive final licensure, they will be permitted to sell cannabis products grown and processed in New York State. The Board will continue to review applications and issue licenses on a rolling basis, to qualifying businesses owned by justice-involved individuals.

The Board also voted to publish revised regulations for product packaging and laboratory testing, and to publish a comprehensive package of proposed regulations. The Proposed Adult-Use Cannabis Regulation Package addresses, among other items, the application process and ownership and licensing requirements; protections for cannabis businesses from discrimination by municipalities; environment and sustainability regulations, including requirements for sustainable packaging and energy use tracking and water use conservation measures by growers and processors; and social and economic equity. The Board noted during this meeting that enforcement for cannabis-related offenses has affected minorities in New York even more disproportionally than in other states, and New York is now prioritizing these affected groups in its licensing and funding. The state will also prioritize other licensing applicants, including disabled veterans, minorities, women, and distressed farmers. New York’s cannabis laws create a “two-tier” market, which discourages vertical integration by prohibiting common ownership of retailers and suppliers and imposing certain disclosure requirements. The Board approved publication of this set of regulations for a 60-day public comment period.

The Board noted that this meeting included several milestones – particularly the approval of the first set of CAURD licenses and publication of the proposed regulation package. The Board’s focus moving forward will be to get current licensees up and running and continue to review and approve new applications.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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