The Office of Cannabis Management is in the process of drafting the rules regarding the New York cannabis license list for businesses to participate in the adult-use cannabis industry, with attention to applicants that have been convicted of cannabis crimes. It’s crucial to understand the New York Cannabis License List and what they entitle licensees to do with cannabis, before submitting an application.  Below is a summary of each type of license for New York’s adult-use cannabis market.  

1. Cultivator 

The term “cultivation” encompasses the “growing, cloning, harvesting, drying, curing, grading, and trimming of the cannabis plant” which may be sold to specific cannabis businesses, such as those with processors or distributor licenses. The Cannabis Control Board may create rules allowing cultivators to “perform certain types of minimal processing” to the plant without requiring a processor’s license. 

1. Processor

A processor is a licensed individual who produces cannabis concentrates, compounds, blends, infuses, or otherwise prepares cannabis products. A processor may also possess a distributor license, but only distribute their own products. In addition, processors are prohibited from owning retail dispensaries. 

1. Cooperative 

A cooperative may cultivate, process and sell cannabis to other cannabis businesses, including distributors, retail dispensaries, and on-site consumption sites. However, a cooperative may not sell directly to consumers.  A Cooperative’s members must be natural persons and members cannot hold a financial interest in another New York cannabis business.  There are specific rules for cooperatives, including that it must be comprised of residents from the state of New York, must subordinate capital, be democratically control by the members (one vote per member); allocate surplus to members in proportion to participation, and it must operate according to the seven cooperative principles published by the International Cooperative alliance in 1995. Cooperative members may not participate in other cooperatives.

1. Distributor 

A distributor is a company that sells wholesale adult-use cannabis products. Distributors may purchase cannabis from NY licensed cultivators, processors, and cooperatives and sell the cannabis to retail dispensaries and on-site consumption sites.  Distributors may also possess a cultivator or processor’s license; however, they may only distribute cannabis products that license has processed and cultivated.

1. Retail Dispensary 

Licensed retail dispensaries may sell and deliver cannabis to adult users 21 and older. Retail dispensaries are forbidden from possessing other types of cannabis licenses such as cultivator, processor, micro-business, cooperative, or distributor licenses. Further, individuals can possess no more than three retail licenses. 

1. Microbusiness 

New York State largely prohibits vertical integration, which means that a licensee is not permitted to sell the products they cultivate, process, distribute. However, micro-businesses are licensees are the exception that acts as cultivators, processors, distributors, and retailers in limited quantities. The CBB is currently determining equitable criteria for micro-businesses.

1. Delivery 

Delivery refers to the direct transfer of cannabis products by a retail, micro-business, or delivery license holder to consumers. Delivery licenses allow the holder to pick-up adult use cannabis from a retail dispensary for customers and deliver it to their location.  Delivery licensees may not hold any other type of adult use licenses.

1. Nursery 

A nursery only produces “clones, immature plants, seeds, and other agricultural products used specifically for the planting, propagation, and cultivation of cannabis by licensed adult use cannabis cultivators, micro-businesses, cooperatives and registered organizations.” Cultivators can hold a nursery license to sell to other cultivators, cooperatives or micro-businesses.

1. On-site Consumption 

“On-site consumption” refers to licensed areas in which cannabis consumption takes place. Consumption licenses allows holders to possess and sell cannabis to consumers for use on the property.  Certain activities are prohibited at on-site consumption businesses, such as gambling, fireworks, or serving alcoholic beverages.  Additionally, adult-use on-site consumption businesses cannot also hold a retail dispensary, cultivation, processor, micro-business, cooperative or distributor license.

As the Cannabis Control Board prepares to issue different types of cannabis licenses in New York, reach out to Mr. Cannabis Law for consulting and assistance with the application process.  We can help guide you with corporate structure and governance, application drafting and review, drafting of investor documents, property and acquisition, protection of intellectual property, sourcing and logistics, reporting and testing compliance, packaging, and employment matters. 

Disclaimer: Nothing herein should be construed as legal advice. Additionally, cannabis laws and psychedelic laws are quickly evolving. Thus, while we do our best to keep our content current, we are not able to guarantee that the content herein is current or even accurate. You should not take any action in reliance on the information on this website.

Written by:  Amanda Barton, Esq., and Jules Batchker