31 and Markets Industrial Hemp Research Pilot Program; (2) be in good standing with the Department of Agriculture and Markets; (3) have been authorized by Department of Agriculture and Markets to grow cannabinoid or “CBD hemp” as opposed to growing hemp for grain or fiber; (4) have grown and harvested cannabinoid or “CBD hemp” for two of the past four years (between 2018 - 2021) and be able to provide the Office with proof documenting such activities; and (5) hold at least a 51% or more ownership in the entity that held the industrial hemp grower authorization from Department of Agriculture and Markets. A conditional licensee may grow up to one acre of cannabis outdoors, or 25,000 sq/ft in a greenhouse, and may engage in “minimal processing and distribution” activities of their own cannabis flower products. The application fee is $2,000. To be eligible for a conditional adult-use processor license, a processor must (1) have applied for a cannabinoid hemp processor license before January 1, 2022, (2) hold an active cannabinoid hemp processor license, and (3) as an individual applicant have an ownership interest of 51% or more of the entity that is the licensee. The license will allow the processing and manufacturing of cannabis products at the same location as the previously authorized hemp processing (unless permission to relocate is obtained). The licensee will also be required to comply with various environmental mandates and requirements. Importantly, to avoid the need for a separate conditional distribution license, holders of conditional processor licenses will be allowed to distribute products until June 1, 2023, provided that the licensee complies with requirements imposed by the office. Both types of licenses have restrictions on changes in ownership and organizational structure during the conditional period. Support For Social Equity Applicants Finally, Governor Hochul’s FY 2023 Executive Budget proposes a $200 million public-private fund to provide direct capital and startup support for social equity applicants. In addition, as part of the initiative, the Dormitory Authority of the State of New York (“DASNY”) would provide support leasing and construction services to dispensaries. Because the plan is under active negotiation with the legislature the contours remain in flux. Still, this is a step in the right direction, as failure to support social equity applicants, both financially and through other resources, would simply set them up for ruin once better capitalized and organized applicants enter the field in 2023.
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