Cannabis Litigation

Until 2021, it was illegal to use, cultivate, or sell marijuana in New York. In recent years, however, the attitudes regarding marijuana have changed, and due to The Marijuana Regulation & Taxation Act (the MRTA), adults in New York can now lawfully use marijuana for recreational purposes. The passage of the MRTA not only impacts the criminality of marijuana use throughout the state, but it also opens the door to potentially lucrative opportunities for businesses. While many entities are eager to enter into the arena of marijuana sales, they cannot lawfully do so without a license. It is important for anyone interested in obtaining a license to consult an attorney. The Linden Law Group will be handling license applications to operate.

The MRTA, which Governor Andrew Cuomo signed into law on March 31, 2021, legalizes recreational marijuana use for people who are at least 21 years of age. Under the MRTA, the Office of Cannabis Management (OCM) was charged with developing regulations pertaining to the application process and issuing cannabis licenses. The nine types of adult-use licenses the OCM will issue are: nursery, cultivator, processor, distributor, retail dispensary, delivery, microbusiness, on-site consumption, and cooperative.

Certain limitations apply to each type of license. For example, nursery licenses permit parties to sell, produce, and distribute immature plants, seeds, and other products used for cultivating cannabis. Parties with a cultivator license may plant, grow, harvest, dry cure, and grade cannabis. They may own processor and distributor licenses but only distribute and process their products. Processor licenses allow parties to prepare and make cannabis products via extraction, infusion, and other methods. Cultivators and processors may not hold interests in dispensaries. Distributors may obtain, distribute, and sell cannabis but may not own a dispensary, on-site consumption site, or microbusiness.

A retail dispensary license allows parties to sell and deliver cannabis from dispensaries to consumers. An individual cannot own more than three retail dispensary licenses or cultivator, processor, microbusiness, cooperative, or distributor licenses. A delivery license grants a party the right to deliver cannabis products to consumers. Parties with such licenses cannot own any other type of adult license. A microbusiness license allows the licensee to cultivate, process, distribute, deliver, and dispense its own cannabis in a limited capacity. Microbusinesses cannot own any other type of license.

As the name suggests, on-site consumption licenses allow parties to sell cannabis to consumers for on-site consumption. Numerous regulations apply to these licenses. Lastly, cooperative licenses permit parties to cultivate, process, and sell cannabis to on-site consumption cities and distributors but not directly to individuals. An entity must qualify as a New York cooperative to obtain this license.

Presently, it is unclear how many cannabis licenses will be available, but the supply will likely be limited, and companies that wish to obtain licenses will face intense competition. Notably, the OCM intends to provide fifty percent of adult-use licenses to communities who have historically been harmed by the prohibition of marijuana, like women and minority-owned businesses, disabled veterans, and distressed farmers, in the interest of economic and social equity.

Parties who wish to obtain a license must apply for one via the regulations issued by the OCM. The OCM then scores the application based on a number of criteria propounded in the MRTA, which will ultimately result in the applicant’s final score. Licenses will be issued to the applicants with the highest rankings until no licenses are available. Parties who are denied licenses can challenge the ruling, but they generally must establish that the decision in question was capricious and arbitrary to show it should be overturned.

On November 24, 2021, the OCM promulgated hemp regulations at 9 N.Y.C.R.R. Part 114. The title is “Cannabinoid Hemp.” See them here part_114_cannabinoid_hemp_regulation_11-10-21.pdf (ny.gov). In advance of these, industry leaders weighed in from the New York Cannabis Growers and Processors Association, the Hemp Round Table, the New York State Farm Bureau, and numerous others. The OCM will monitor the license program’s effectiveness and periodically weigh in further defining these new regulations. They may also change them altogether

Our firm will be submitting applications for cannabinoid hemp processors, retailer licenses and distributor permits. Applicants have to comply with the packaging and labelling requirements. By April 25, 2022, licensees must comply with these requirements.

The new cannabis and marijuana industry in New York will be very profitable for businesses, but the process of obtaining the appropriate marijuana licensing can be complicated and arduous. It is most advisable, therefore, for potential cannabis license applicants to contact a lawyer towards that effort. The seasoned New York attorneys and staff at The Linden Law Group, P.C. are adept at helping parties navigate the complexities of licensing and regulatory laws that affect their business operations, and see the application process through to its end. We have offices in Manhattan, Queens and Long Island, and aid businesses throughout New York City, Long Island and upstate New York and New Jersey. You can contact us at (212) 537-6612 or via our online form to set up a consultation.