New York Office of Cannabis Management Focused on Aggressive Plan To Launch Adult-Use Program; Social Equity

The New York State Office of Cannabis Management (“OCM”) is an independent state agency created by the Marijuana Regulation and Taxation Act (“MRTA”), which passed on March 31, 2021, and was signed into law by then-Governor Andrew Cuomo. The OCM was officially established on October 5, 2021, and Tremaine S. Wright was confirmed by the State Senate as chair of New York’s Cannabis Control Board (“CCB”).

Chair Wright recently spoke at the November meeting of the New York State Society of CPAs’ Cannabis Industry Group, providing an overview of the key provisions of the MRTA’s and the OCM’s goals.

The OCM is tasked with implementing the MRTA’s provisions, which include (1) providing a consolidated framework to regulate the production and sale of cannabis, (2) creating a new adult-use cannabis program, and (3) expanding the State’s existing medical cannabis and CBD hemp programs.

Chair Wright discussed an aggressive plan to launch New York’s adult-use program in 18 months, though the OCM is just beginning to write regulations and bring on additional staff, following six months of delays in the CCB member-appointment process. The adult-use program will have nine different license types, including those that offer multiple points of entry into the market and opportunities for social and economic equity applicants:

1. Cultivator
2. Nursery
3. Processor
4. Distributor
5. Retail-dispensary
6. Delivery
7. On-site consumption
8. Adult-use cooperative
9. Microbusiness

The amount of licenses to be issued for each license type has not yet been established, though microbusiness (i.e., small verticals similar to craft beer and wineries) and cooperative licenses will be highlighted. 

Cities, towns, and villages can opt out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses from locating within their jurisdictions, though municipalities cannot opt out of adult-use legislation. The deadline to opt out is December 31, 2021, and as of the moment, Chair Wright estimated that about one-third of localities are considering taking some type of action. 

Additionally, the MRTA requires the implementation of a Social and Economic Equity Plan. Under the plan, the State’s goal is to award 50% of all adult-use licenses to social and economic equity applicants and invest 40% of the adult-use cannabis tax revenue toward rebuilding communities most impacted by the war on drugs.