On February 22, 2022, Gov. Hochul signed into law an act creating conditional licenses for adult-use cannabis cultivators and processors.  Then, on March 10, 2022, the New York State Cannabis Control Board released proposed regulations for conditional adult-use retail dispensaries.  After long delays in releasing cannabis regulations, New York has begun accepting applications for conditional adult-use cultivator licenses and is expected to accept applications for conditional adult-use processor licenses soon.

What is a conditional cultivator or processor license?

New York’s conditional cultivator and processor licenses are temporary licenses meant to be available only certain individuals and companies currently working in New York’s industrial hemp market.  The purpose of these licenses appears to ensure that cannabis can be cultivated and processed in the 2022 outdoor growing season, ensuring a strong supply of cannabis for the conditional adult-use retail dispensaries later this year.  As of March 15, 2022, applications are already being accepted from hemp farmers for the adult-use conditional cultivator licenses. This is a different approach than New Jersey, where conditional licenses are meant to allow people to obtain adult-use cannabis licenses without large amounts of capital pre-application.

What does this mean for cannabis in New York?

The creation of these conditional licenses should greatly accelerate the formation of New York’s legal cannabis market.  The Cannabis Control Board indicated that they expect to accept retail applications as early as summer 2022 and to award licenses in late summer or early fall 2022, allowing retail stores to open before the end of 2022.

Am I eligible for a conditional adult-use cultivator or processor license? What would I be able to do if I got a license?

To be eligible for a conditional adult-use cultivator license, an applicant must:

  • Be authorized to grow cannabinoid hemp (a.k.a. CBD Hemp), not simply hemp grown for grain or fiber, and be in good standing with the Department of Agriculture and Markets Industrial Hemp Research Pilot Program; and
  • Have been harvesting hemp for two of the four years ending in January 1, 2022.

To be eligible for a conditional adult-use cultivator license, an applicant must have had a cannabinoid hemp processor license before January 1, 2022, and have an active cannabinoid hemp processor license issued by the Office of Cannabis Management.

Cultivators will be permitted to cultivate up to 43,560 square feet of canopy outdoors, 25,000 square feet of canopy in a greenhouse with a maximum of 20 artificial lights, or a combination of 30,000 square feet of outdoor canopy and 20,000 square feet of greenhouse canopy.  Both types of conditional license holders will be permitted to process and distribute cannabis until June 1, 2023, at which point cultivators would need to apply for separate processor and/or distributor licenses and processors would need to apply for separate distributor licenses.  Conditional licenses shall be valid until June 30, 2024, at which point the licensee would need to apply for a standard license.

Other details of note

Both conditional cultivators and conditional processors will be required to participate in an environmental sustainability program and a social equity mentorship program.  The social equity mentorship program will identify individuals eligible to be social equity applicants under the Cannabis Law and pair them with conditional license holders so they can obtain experience in cannabis business management and sustainable cannabis cultivation.  Conditional cultivators and processors will also be required to enter a labor peace agreement with a bona-fide labor organization.

In conclusion

New York’s recent steps regarding conditional cannabis licenses should help the state catch up with neighbors New Jersey and Connecticut and allow adult-use cannabis to be sold in 2022.