Applications to Legally Grow, Process, Distribute, and Sell Cannabis Are Now Open
Office of Cannabis Management Launching New Partnerships with Localities and Additional State Agencies to Significantly Increase Fines, Penalties, and Opportunities for Store Closures
Aggressive Enforcement Efforts Have Yielded More Than 8,500 Pounds of Illegal Product, Estimated Value More Than $42 Million
Governor Kathy Hochul today announced the largest expansion of New York State’s legal cannabis market to date, with hundreds of licenses being made available to individuals and businesses interested in legally growing, processing, distributing, and selling cannabis. The application period is open as of today, October 4, and will remain so for two months. The Governor also announced the results of continued aggressive enforcement against the illegal sale of cannabis across the state undertaken by the Office of Cannabis Management and the Department of Taxation and Finance, which to date has yielded the seizure of more than 8,500 pounds of illicit product with an estimated street value of more than $42 million. She also announced new partnerships with localities that will enable them to pursue padlocking orders against businesses illegally selling cannabis from State courts, and a new multi-agency initiative to target illegal operators for labor violations, thus significantly increasing fines and penalties that businesses may face. New York’s legal cannabis market is now poised to be one of the largest in the world; one that will ultimately generate hundreds of millions in revenue annually, as well as create or sustain thousands of jobs across the state, all while prioritizing equity, promoting small business growth, ensuring product quality, and maintaining consumer safety.
"We know there's room for improvement as New York works to launch a brand-new cannabis industry and crack down on illicit operators, and I'm committed to working with all stakeholders to get the job done right," Governor Hochul said. "My Administration is laser-focused on shutting down illegal storefronts, protecting the health and safety of children, and helping small businesses thrive. We will continue working to build the most equitable adult-use cannabis industry in the nation that invests in communities and rights the wrongs of the past."
Chris Alexander, Executive Director of New York State Office of Cannabis Management said, “This is a significant moment for entrepreneurs who have been waiting for an opportunity to join this consequential market. We’re building the biggest and fairest cannabis market in the world, and the opening of a new application window means an expansion of opportunity. New York’s market is centered around equity, with the nation’s strongest anti-trust protections in place that ensures small operators will forever have a place in our cannabis industry. I appreciate Governor Kathy Hochul’s fierce commitment to anti-trust regulations in cannabis, and I’m eager to see what this new crop of entrepreneurs can do to transform cannabis in and out of New York.”
Largest Expansion of Legal Market to Date
OCM and the CCB will accept applications for review and will begin awarding licenses for cultivators, processors, distributors, microbusinesses, and retail dispensaries in early 2024. During this application window, currently operational Adult-Use Conditional Cultivators and Conditional Processors will also be able to apply to transition to full, non-conditional licenses. Entrepreneurs seeking to apply for licenses will be able to file their applications through the New York Business Express (NYBE) platform, accessible here.
The regulations governing all categories of licenses were approved by the CCB on September 12. These regulations create a framework for an equitable and sustainable cannabis industry grounded in public health best practices, including keeping cannabis products out of the hands of youth, establishing product quality and safety guidelines, outlining employee training standards, and defining business security requirements to protect public safety. These regulations also incentivize sustainable cannabis operations by prioritizing energy and resource efficiency and protecting against wasteful business practices. Critically, these regulations maintain the equity goals laid out in New York’s Cannabis Law and the Marihuana Regulation & Taxation Act (MRTA). The finalized regulations are the result of significant public feedback, with OCM and the CCB receiving more than 4,000 comments between December 2022 and July 2023.
The CCB anticipates issuing a significant amount of retail licenses are adopting an approach that has the ultimate goal to ensure that New Yorkers have access to as many locations as possible to legally buy cannabis as quickly as possible. Owing to the constantly shifting nature of the retail environment and because the process of opening a storefront is both resource-intensive and lengthy, the number of retail licenses initially issued will likely be larger than the number of stores that are anticipated to open in this first phase. This approach is designed to guard against market volatility, help small businesses enter the market, and expand consumer access.
Since June 7, OCM and DTF have conducted 246 inspections across the state, and have seized more than 8,500 pounds of illegal cannabis products, which have an estimated street value of more than $42 million. The Governor also announced today the results of concentrated enforcement actions on the West Side of Manhattan and in Downtown Brooklyn, two areas of New York City with a proliferation of illegal cannabis shops. These actions, which took place just in the last two days, resulted in the seizure of nearly 150 pounds of product worth close to $600,000.
Businesses found to be illegally selling cannabis have been issued Notices of Violation and have also had Orders to Cease Unlicensed Activity affixed to the outside of the doors. Those businesses must now appear at an administrative hearing, where the final fines and penalties they will face will be determined. Fines for the illegal sale of cannabis start at $10,000 per day and can rise up to $20,000 per day for the most egregious conduct. An additional fine of $5,000 can be levied for removal of the Order, and the inspected businesses may also be subject to additional violations and penalties under the Tax Law. Additional fines may be assessed. The enforcement legislation passed in May also authorized OCM to seek a State court order to ultimately padlock businesses found to be in repeated violation of the law. In addition, the law makes it a crime to sell cannabis and cannabis products without a license.
To bring many levels of government together to combat the illicit sale of cannabis, Governor Hochul announced today new partnerships between OCM and the Attorney General’s Office through which municipalities across the state can receive training on how to utilize a particular provision -- Section16-A -- of the new enforcement law signed by Governor Hochul in May to pursue padlocking orders in State Court. 16-A authorizes local governments, including county attorneys, to pursue padlocking orders based on inspections conducted by OCM and DTF without OCM having to petition the court for such an order against a business found to be engaged in egregious conduct. This authority significantly augments the ability for different levels of government to work together to shut down illegal cannabis operators.
New York Attorney General Letitia James said, "Expanding the number of cannabis licenses while simultaneously taking action against unlicensed sellers is a common sense way to support small businesses and incentivize entrepreneurs to legally enter the marketplace. My office worked closely with the Office of Cannabis Management and Governor Hochul to shut down unlicensed dispensaries, and we will continue to coordinate with our partners in government to ensure New York's cannabis laws are upheld. By holding unlicensed cannabis sellers accountable, my office is helping ensure New York can realize the intended purpose of MRTA, namely to remediate some of the societal harm caused by the so-called war on drugs.”
Governor Hochul also highlighted the recent success by the City of Syracuse to leverage OCM and DTF inspections conducted against illegal operators together with the application of the State Property Maintenance Code to pursue closures of buildings the City deemed unfit or unlawful under the Code, another example of how municipalities can play an active role in combating the illicit market.
In addition to these new partnerships with localities, the Governor announced that several additional State agencies will now be bringing the weight of their business enforcement powers to bear as part of the State’s creative and aggressive approach to combating the illicit market. The Department of Labor and the Workers Compensation Board will join these efforts to ensure businesses suspected of selling cannabis without a license are compliant with New York State labor and workers compensation laws:
To ensure transparency, accountability, and regulatory compliance, OCM will implement a robust system for tracking the ownership and financial interests of cannabis license applicants and owners. This includes the requirement for applicants to list their “True Parties of Interest” (TPI), which will enable OCM to assess ownership stakes of individuals and businesses operational in one tier of the market across the other tier. This critical information will serve a vital function in upholding the integrity of New York’s two-tier market and the viability of small businesses to compete across the supply and retail sides of the market.
No comments:
Post a Comment