April Edition 2022

30 have a background in owning and operating a small business. The Office of Cannabis Management (“OCM”) published proposed rules after its March 10, 2022, meeting. The rules are now in the public comment period. The OCM’s aim is to begin issuing these licenses towards the end of the Summer of 2022 (which means sales may occur by late 2022). Under the proposed rules, an applicant must demonstrate (1) a significant presence inNewYorkState,(2) that at leastoneof theowners (if theapplicant is an entity) was “justice involved” in New York (e.g. convicted, or had a close family member convicted, of marijuana related offense, prior to the MRTA coming into force), and (3) that the applicant held at least a ten percent ownership interest in, and control of, a qualified business for two years. Such “justice involved” individuals must own at least 51% of the applicant. Alternatively,an applicant canbe a non-profit organization recognizedunder Section 501(c)(3) of the Internal Revenue Code serving “justice involved” individuals and communities impacted by the war on drugs by operating a social enterprise that had at least two years of positive net assets or profits. Such an organization must have “justice involved” individuals on its board, and employ five full time employees. Considering federal prohibitions on cannabis, and the Internal Revenue Service’s general hostility to the industry, it remains to be seen whether this is a viable avenue for a license At the conclusion of this “conditional” period, licensees will be given the opportunity to transition into a fully licensed adult-use retail dispensary. In evaluating such an application the OCM will look at the licensees history of compliance with state and local laws, and service to the community in which it is located. The Conditional Adult-Use Cultivator And Processor Licenses Recognizing that adult-use dispensaries cannot open without supply, Governor Hochul signed Senate Bill S8084A into law, allowing certain hemp cultivators and processors to apply for “Conditional Adult-Use Cultivator” and “Conditional Adult-Use Processor” licenses this year. The legislation achieves this by allowing a subset of existing participants in the state’s “pilot” hempprogramto apply for these provisional licenses. The application portal is already open. To be eligible for a conditional cultivator license, an applicant must: (1) have been authorized to grow hemp under the Department of Agriculture