New York’s “Seeding Opportunity Initiative” Opens up Adult-Use Cultivator License Applications to Hemp Farmers on March 15 and Introduces Proposed Regulations that Will Favor Those With Past Marijuana Convictions for Retail Dispensary Licenses

On March 10, New York State’s cannabis regulators filed proposed regulations for conditional adult-use retail dispensary regulations.  The public will have 60 days to provide comment on the proposed regulations before the Cannabis Control Board votes on them.

The proposed regulations place “justice-involved” individuals – those who have been convicted for a marijuana-related offense and their family members – at the front of the line for retail dispensary applications.  To assist those applicants, Gov. Kathy Hochul has proposed a $200 million budget that, if approved by the Legislature next month, would be used to help find, secure and renovate storefronts for the dispensaries.  The state’s goal is for the dispensaries operated by “justice-involved” individuals to open by the end of 2022, with other dispensaries to follow in early 2023.  New York’s approach differs from other states that have legalized cannabis in that it is attempting to address head-on the struggles that social equity license applicants often face in raising capital and starting a business in a highly-regulated industry.  Chris Alexander, the executive director of the state’s Office of Cannabis Management, said he expects 100-200 licenses to go to “justice-involved” individuals.

Under the “Farmers First Program,” the application period for adult-use cultivator licenses will also open up on Tuesday, March 15 and end on June 30, 2022.  Gov. Hochul signed legislation last month that created a new Adult-Use Conditional Cultivator License, authorizing eligible hemp growers to apply for a license to grow cannabis containing over 0.3% THC for the upcoming adult-use market.  To be eligible to apply, the hemp grower must have been authorized to grow hemp under the Department of Agriculture and Markets Industrial Hemp Research Pilot Program and meet certain other requirements.  These conditional licenses make it possible for farmers to grow cannabis in the 2022 growing season.

With these moves, the Seeding Opportunity Initiative seeks to establish a supply chain from New York State farmers to social equity retailers.

The general regulation package for cannabis licenses is expected to be released in May.

New York Conditional Cultivation License – Advanced Preparation (What You Can Do Now To Be Ready)

As we noted is our blog post earlier this week, New York recently adopted legislation to allow licensed hemp farmers to grow and process cannabis for the adult use market with the aim to have product available once retail sales are permitted.

While the New York Office of Cannabis Management has yet to release the form of application (and any implementing regulations), that doesn’t mean that potential applicants should sit idly by and wait.  In reviewing the legislation, its clear that there is plenty of work that can be done now. Continue reading “New York Conditional Cultivation License – Advanced Preparation (What You Can Do Now To Be Ready)”

NY Gov. Hochul signs conditional cannabis cultivation bill to speed-up recreational cultivation

New York Gov. Kathy Hochul signed new legislation on Tuesday that will allow hemp farmers in the state to apply for a conditional license to grow cannabis.

With this legislation, New York is creating a new Conditional Adult-use Cannabis Cultivator license, allowing hemp farmers to grow cannabis in the 2022 growing season to “position New York’s farmers to be the first to grow cannabis and jumpstart the safe, equitable and inclusive new industry we are building”. Conditionally licensed cannabis farmers must hit certain requirements under this law. Continue reading “NY Gov. Hochul signs conditional cannabis cultivation bill to speed-up recreational cultivation”

More Investors Eying Ways to Tap the Higher Returns of Cannabis Real Estate

Duane Morris partner Michael Schwamm was quoted in an article on WealthManagement.com.

The past few years have brought cannabis legalization to multiple states, giving real estate investors a new alternative asset class to put their money into. It looks like this trend is only going to intensify in the months ahead.

As we get further into 2022, all U.S. states without current medical cannabis legalization are now considering legislation or ballot initiatives to legalize it. In addition, some states where medical cannabis is already legal may take the next step this year to allow adult recreational use. […]

Twenty-one additional states may legalize cannabis use in some form this year, according to Michael Schwamm, a partner in the New York office of the law firm Duane Morris.  […]

“Real estate investing (along with ancillary services) is often the entry point for many investors,” Schwamm adds. “As the industry continues to gain acceptance, I am seeing more and more traditional real estate investors taking a look at this market as they are able to get higher returns in the cannabis sector vs. other [real estate] markets.”

To read the full text of this article, please visit the WealthManagement.com website.

New York State Cannabis Update

By Michael Schwamm

More than 520 cities, towns and villages (1/3 of all municipalities in New York state) have opted out of allowing cannabis retailers and consumption lounges in their municipalities as of the December 31 deadline, according to new data released by the OCM.  Of that number, 75 municipalities opted out of consumption lounges, but will still allow cannabis retailers. On the other hand, three towns are banning retailers, but will allow consumption lounges. Continue reading “New York State Cannabis Update”

Harborside to Combine with Urbn Leaf and Loudpack to Create StateHouse Holdings

Harborside Inc. (CSE: HBOR), (OTCQX: HBORF) a California-focused, vertically integrated cannabis enterprise, is pleased to announce that it has entered into definitive agreements to acquire UL Holdings Inc. (“Urbn Leaf”),  a top California cannabis retailer with a dominant position in Southern California  and  LPF JV Corporation (“Loudpack”), a leading manufacturer, cultivator and distributor of award-winning cannabis brands in California . Following completion of the Transactions, Harborside is expected to be renamed StateHouse Holdings  (“StateHouse”), subject to shareholder and regulatory approval.

Duane Morris partner Nanette Heide, who led the team that acted as United States legal counsel to Harborside, commented, “We are super proud of Harborside for taking on the challenge of pursuing two opportunities almost simultaneously and delighted to be the legal team that led them through this intense process.”

To learn more about the transaction, please visit the New Cannabis Ventures website.

New York DOL Publishes Guidance on Recreational Use of Cannabis Related to the Workplace

By Katelynn Gray

As we previously reported earlier this year, Governor Cuomo signed the Marijuana Regulation and Taxation Act (“MRTA”), which legalized adult-use and possession of cannabis, effective March 31, 2021. The MRTA amended Section 201-D of the New York Labor Law (“NYLL”) making it illegal for employers to discriminate against someone for their use of cannabis outside the workplace, outside of work hours and while not using their employer’s equipment or property.

This spurred some obvious questions from employers- Can we take action against an employee for using cannabis while working? Can an employee use cannabis while on breaks? What about employee use of cannabis if they are not at work on premises but are on call? The New York Department of Labor has now published FAQs addressing these, and other, common employer questions.

Continue reading “New York DOL Publishes Guidance on Recreational Use of Cannabis Related to the Workplace”

New York Cannabis Chief Reiterates Social Equity Focus in Speech at Cannabis Trade Show

Tremaine Wright delivered her first public speech since being appointed Chair of the New York State Cannabis Control Board at the CWCBExpo (Cannabis World Congress & Business Exposition) at the Javits Center on November 4.  Wright leads the five-member board charged with approving a regulatory framework for New York’s cannabis industry and will oversee licensing of cannabis businesses.  In her remarks before 400 people at the business-to-business cannabis industry trade show, Wright reiterated that New York will support social equity licenses for people from communities historically affected by the War on Drugs.  “We’re about to create the most equitable cannabis program in the country,” she said.  Wright also said that New York will prevent social equity licenses from being sold to large companies by requiring that they be sold to other social equity licensees.  However, the regulations are currently being written and there are few details about how the state will help social equity applicants raise capital to start cannabis businesses.  Wright also said that all license applicants will be required to share their ESG (Environmental, Social, and Corporate Governance) frameworks to operate in the state.  The Board has a goal of issuing licenses within 18 months.  Members of New York’s Office of Cannabis Management were also in attendance at the Expo.

Report of Office of Cannabis Management Board Meeting, November 3, 2021

By Jerome T.  Levy

The meeting was called to order at 1:00 p.m. by the Chairperson, Tremaine Wright, noting that all parties were present and Ms. Garcia was attending via remote contact. Ms. Wright stated that the meeting was being recorded and will be available on the Cannabis Control Board website. Ms. Wright indicated that the agenda would include opening remarks, approval of the minutes of the previous meeting and then a report by the Executive Director of the Office of Cannabis Management, Chris Alexander. She reminded the audience and the Board members that the law was passed March 31, 2021 and as a result, while some aspects were moving swiftly, much of the work being done was still preliminary. The work has been mostly staffing, hiring new employees and moving staff from other New York State departments, principally the Department of Health. Continue reading “Report of Office of Cannabis Management Board Meeting, November 3, 2021”

Tremaine Wright presents to the NYSSCPA Cannabis Committee

By Hugh Jacobsen

Tremaine Wright, the Chairwoman of the Cannabis Control Board of the New York Office of Cannabis Management (OCM), on October 28, 2021 gave a presentation to the Cannabis Committee of the New York State Society of Certified Public Accountants on various items relating to cannabis regulation in New York.

At this presentation, Ms. Wright went over various features of the Marijuana Regulation and Tax Act.  She noted that there will be preference to individuals and communities injured by the War on Drugs and reiterated the goal of the legislation to ensure that at least 50% of the licenses go to social equity applicants.  She noted that there are nine different types of licenses provided in the statute and that vertical integration will generally be prohibited.  However, New York will take steps so that micro businesses will not have to raise as much  capital that would be required by other entities. In addition, there is no consideration currently being given to a residency requirement for obtaining a license. In response to a question on capital requirement, she did note that she had heard that people were spending over a $1 million to open up a retail dispensary, and she thought it could be done for less.   She also encouraged the industry to provide more education so that people do not enter into significant financial commitments (such as rent) earlier than necessary. Continue reading “Tremaine Wright presents to the NYSSCPA Cannabis Committee”

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