Cannabis in New York - Adult-Use Conditional Cultivator License (March 28, 2022)

Cannabis in New York - Adult-Use Conditional Cultivator License (March 28, 2022)

March 28, 2022 

Cannabis in New York - Adult-Use Conditional Cultivator License

To our Clients and Friends:

While we wait for the New York State Cannabis Control Board (“Board”) to issue rules and regulations generally, the hemp growers have been given the task of jump starting the adult-use cannabis cultivation industry in New York.

If you are authorized to grow hemp under the Department of Agriculture and Markets Industrial Hemp Research Pilot Program, the application window is now open until June 30, 2022 for you to apply for an Adult-Use Conditional Cultivator License to permit you to grow, process and manufacture products containing over 0.3% THC.   An applicant must create a profile at New York Business Express (NYBE) and submit an application on the NYBE Website.

A few clarifications.

To be eligible to apply, the hemp grower must:

• have applied for a Cannabinoid Hemp Processor License before January 1, 2022
• be authorized to grow hemp under the Department of Agriculture and Markets Industrial Hemp Research Pilot Program
• be in good standing with the Department of Agriculture and Markets
• be authorized by the Department of Agriculture and Markets to grow cannabinoid or “CBD hemp” as opposed to growing hemp for grain or fiber
• have grown and harvested cannabinoid or “CBD hemp” for two of the past four years (between 2018 - 2021) andbe able to provide the Office of Cannabis Management (the “Office”) with proof documenting such activities
• hold at least a 51% or more ownership in the entity that held the industrial hemp grower authorization from Department of Agriculture and Markets
• pay a non-refundable $2,000 Application and Licensing Fee

There are, however, limits to your authorized grow: one acre (43,560 square feet) outdoors or 25,000 square feet in a greenhouse, or a combination of both with the total canopy outdoors limited to less than 30,000 square feet and the portion of greenhouse canopy being limited to less than 20,000 square feet.

Adult-Use Conditional Cultivators may also do minimal processing and distribution activities of their own cannabis flower products.

An Adult-Use Conditional Cultivator license is conditional, in that it is valid for no more than two years, and in any event all such licenses will expire on June 30, 2024.  In order to continue your grow you will be required to apply for an adult-use cultivator license, rules and regulations for which the Office will be released later.

Adult-Use Conditional Cultivators license holders must also comply with all terms and conditions that will apply to all cannabis license holders in the State of New York.

Corporate Structure Issues

In connection with the licensing process, the following is required:

• provide ownership and financial disclosure information, including organizational structure documents, ownership and organizational charts, capitalization tables and disclosures of sources or proposed sources of capital
• any proposed change in ownership or organizational structure of a license holder must be submitted to the Board for review and approval.
• no license holder or owner of a license holder may have a direct or indirect financial or controlling interest in more than one license.
• no license holder or owner of a license holder may transfer all or a majority of its interest in an adult-use conditional cultivator license unless approved by the Board.
• no license shall be leased, assigned, subcontracted, or otherwise alienated or encumbered
• provide a signed attestation and agreement of the conditional licenses Terms and Conditions

Mentorship and Environmental Sustainability Programs

The license holder is required to participate in a social equity mentorship and an environmental sustainability program as determined by the Office.

Labor Peace Agreement

Within six months of receiving the license, the license holder must enter into a labor peace agreement with a bona-fide labor union and send the signed copy of the labor peace agreement to the Office. Maintenance of such labor peace agreement is an ongoing material condition of licensure.  A “bona fide labor organization” is defined as a labor union:

• that represents employees in New York with regard to wages, hours and working conditions;
• in which officers have been elected by secret ballot or otherwise in a manner consistent with federal law, and;
• that is free of domination or interference by any employer and has received no improper assistance or support from any employer.

Child Support Attestation

If you are an individual or a sole proprietor applying for a license, you are required to certify in a written statement, under oath and to be submitted to the Office, that you are either not under an obligation to pay child support or  that you meet one of the following requirements:

• not more than four months in arrears;
• payments are made by income execution, by a court agreed payment or a plan agreed to by the parties;
• the payment obligation is the subject of a pending court proceeding; or
• the applicant is receiving public assistance or supplemental security income.

For further information or any questions on regulations, please contact Marvin Miller (miller@cmxlaw.com), Head of CMX’s Cannabinoids and Psychotherapeutics Practice Group.

 

Crath Miller & Xistris LLP

Offices: New York
Newport Beach

For further information, please contact us at info@cmxlaw.com.

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