On January 2, 2022, New York State’s Office of Cannabis Management (OCM) released its Inaugural 2022 Annual Report. The report provides a summary of the Cannabis Control Board’s (CCB) and OCM’s activities across New York’s three distinct cannabis programs, which includes the Medical Cannabis Program, the Cannabinoid Hemp (CBD) Program, and the Adult-Use Cannabis Program.
The OCM has done a lot of the groundwork required for a robust New York cannabis market, including drafting eight proposed regulatory packages, completing and filing eight assessments of public comments, promulgating five regulatory packages, and issuing 15 guidance documents. These documents not only paved the way for New York’s first adult-use cannabis sale but also strengthened the State’s medical cannabis and hemp programs.
Prince Lobel’s Cannabis attorneys have provided a summary of five major highlights from New York’s cannabis industry in 2022 and the OCM’s Inaugural Annual Report:
1. New York Approved First Adult-Use Cannabis Retail Dispensary Licenses
As of December 31, 2022, the CCB has approved 36 CAURD applicants, including 28 Justice-Involved Individuals and eight nonprofit organizations, across nine geographic regions, for provisional licensure.
While the OCM plans to recommend more CAURD applicants to the CCB for provisional licensure in the coming weeks, a preliminary injunction preventing the State from issuing licenses in five of the 14 geographic regions, including Brooklyn, Western New York, Finger Lakes, Central New York, and Mid-Hudson, remains in place. The injunction is the result of Variscite NY One, Inc.’s lawsuit challenging the CAURD application eligibility requirements. The CCB has already filed their appeal of the decision.
2. New York Successfully Launched AUCC and AUCP Licenses and Implemented Its Seeding Opportunity Initiative
On February 22, 2022, Governor Kathy Hochul signed into law the Conditional Cannabis Cultivation Bill. The Bill created the Adult-Use Conditional Cultivator (AUCC) and Adult-Use Conditional Processor (AUCP) licenses while also setting the course for New York’s Seeding Opportunity Initiative.
The Seeding Opportunity Initiative is a farm-to-store initiative designed to jumpstart New York’s cannabis industry by relying on family farmers to cultivate the State’s first adult-use cannabis crops. Farmers and processors licensed through the initiative are required to participate in the State’s Cannabis Compliance Training and Mentorship Program, which is aimed at helping to educate and diversify the future licensee pool in New York’s emerging cannabis industry through providing mentorship and other opportunities to distressed farmers and entrepreneurs that have been disproportionately impacted by the enforcement of cannabis prohibition.
As of December 31, 2022, the CCB has issued 279 AUCC and 39 AUCP licenses.
3. The OCM Expanded New York’s Medical Cannabis Program
On July 5, 2014, New York passed the Compassionate Care Act, laying the foundation for the State’s medical cannabis program. Initially, the medical cannabis program was overseen by the New York State Department of Health, however, control of the program was transferred to the OCM shortly after the agency was implemented in 2021.
The OCM has revised several key aspects of New York’s medical cannabis program since taking control of the program. These revisions include:
- Expanding the type of providers who can certify patients for medical cannabis to include anyone who is licensed, registered, or certified by New York State to prescribe controlled substances to humans within the State, including dentists, midwives, and podiatrists, who were previously prohibited from certifying medical cannabis patients.
- Allowing practitioners to utilize their clinical discretion to certify patients for any condition for which they believe patients may experience relief. Qualifying conditions were previously limited to cancer, HIV/AIDS, Parkinson’s disease, multiple sclerosis, spinal spasticity, epilepsy, inflammatory bowel disease, neuropathies, and Huntington’s disease.
- Adding whole cannabis flower as a form of administration of medical cannabis.
- Increasing the permitted dispensable amount of medical cannabis from a 30-day supply to a 60-day supply.
- Extending the number of caregivers that a certified patient may designate to assist them in obtaining, possessing, cultivating, and administering their medical cannabis from two caregivers to five caregivers.
- Permitting home cultivation of medical cannabis by certified patients and designated caregivers 21 years of age or older.
4. The OCM Initiated Legal Enforcement Investigations
While the OCM did not receive any complaints regarding licensed cannabis operators, it has received more than 400 complaints regarding unlicensed cannabis businesses since September 1, 2021.
In an effort to curb these unlicensed cannabis businesses, the OCM has issued more than 200 cease-and-desist letters, warning these illicit operators that continuing their unlicensed activities may impact their ability to participate in New York’s regulated cannabis industry.
A joint operation, during the summer, between the OCM, the New York City Sheriff’s Office, and the NYPD resulted in 16 illicit cannabis sales trucks being impounded from the streets of Manhattan and Brooklyn for various violations. Further, between November and December 2022, the OCM and various other state enforcement agencies partnered to form the “Cannabis NYC Interagency Enforcement Task Force”. The multiagency task force engaged in a two-week pilot enforcement program targeting businesses selling unlicensed cannabis, vape, and tobacco products. In total, 53 establishments were inspected across all five boroughs of New York City, over $4 million worth of illicit products were seized, and 556 civil and criminal summonses were issued, as result of the pilot enforcement program.
The OCM also released New York State’s Licensed Cannabis Dispensary Verification Tool, which allows consumers to verify that they are shopping at licensed, regulated dispensary by scanning a QR code. The verification tool will be posted in the windows of all licensed adult-use dispensaries in New York State.
5. New York Comptroller Approved BioTrack as the State’s Seed-to-Sale Tracking System
All licensees must implement an inventory tracking system. Cultivators are required to develop an identification and traceability system that traces cannabis products to their original source. Further, Processors and Retailers are required to collect and submit, in real-time to the OCM, data that facilitates tracking throughout the product’s production cycle.
In December 2022, the State Comptroller approved BioTrack as the vendor for New York’s seed-to-sale inventory tracking system. BioTrack’s aggregation of data from every licensee will allow the OCM to monitor activities with cannabis and cannabis products, prevent diversion to unlicensed persons, and support product quality and safety measures.
If you are looking to start a cannabis business in New York, or have any questions regarding New York’s cannabis laws, please contract, Andrew Schriever, James K. Landau, David C. Holland, or any other member of the Prince Lobel Cannabis Team.
With thanks to Dalton Battin and Alexander Hymowitz for their work on this alert.