FAQ: New York City Cannabis Board Chairman Answers Questions About What It Will Take to Get a Commercial Marijuana License


New York legalized recreational marijuana last March with a law designed to make room for small businesses and people from diverse backgrounds. But nearly a year from now, it’s still unclear what the licensing process will look like for aspiring cannabis entrepreneurs eagerly waiting behind the scenes – or how accessible the industry will truly be.

In the meantime, there is no shortage of misinformation or impatient cannabis consultants ready to sell their services.

“Right now a lot of sharks are trying to make money with the people who are trying to switch to this industry,” said Domingo Estevez, who chairs the Manhattan Community Board 12 public safety committee, which represents neighborhoods in. predominantly Hispanic Washington Heights. and Inwood.

In an effort to provide a clearer picture of what the application process will look like and what they will need to participate in the industry, the Community Board hosted a question-and-answer session on Tuesday evening with Tremaine Wright, President. the state’s recently formed Cannabis Control Board, which will oversee the licensing process. Over 200 people attended and Wright answered questions from those interested in starting new businesses as well as those looking to bring their underground cannabis operations out of the shadows.

Regulations for state marijuana startups will be released by the Cannabis Control Board “this winter or early spring,” Wright said. But she urged people to start learning about the types of licenses that will be available and to write their business plans.

“We have an aggressive 18-month schedule [to complete the licensing process]”Wright said.” We’re putting in a nut soup system and trying to time the market so people come in with the product. [to sell], and do not receive licenses and sit on them for long periods of time. “

Marijuana Tax and Regulation Act sets ambitious target of reserving half of all licenses for “social and economic equity” applicants, including minority and women-owned businesses, for farmers in distress, disabled ex-combatants and those from disproportionately affected communities. through the war on drugs.

While many questions remain about the application process – and how it will help or hinder the state’s equity agenda – Wright has provided some guidance on what applicants can expect.

When will the dispensaries be open?

If all goes according to the Cannabis Control Board’s 18-month schedule, recreational dispensaries should be allowed to operate by summer 2023.

When will license requests be available?

There is no fixed date, but it will probably take several months. The Cannabis Control Board aims to publish draft regulations for the licensing process in the first quarter of this year. Then there will be two months for public comments before the regulations are finalized; It is only after that that the applications will be available.

How much will it cost to apply for a license?

The application fees for different types of recreational cannabis licenses have yet to be determined, but Wright said people can get an idea of ​​the fee structure by looking at the new rules that have been released for the Hemp program. the state. The fee for a license to extract and manufacture hemp is $ 3,500, while the license fee for a dispensary is $ 300 per retail outlet.

“I don’t expect recreational marijuana to be so weak,” Wright said, but added, “We’re very determined not to have astronomical prices because we want it to be a fair program. “

The Marijuana Taxation and Regulation Act notes, however, that fees should be reduced or waived for “social and economic fairness” applicants.

Will the state help applicants with start-up capital?

In other states, and in New York’s own medical market, legal marijuana has been largely dominated by businesses run by white men with access to wealthy investors. As part of efforts to make the adult market more accessible, the Marijuana Tax and Regulation Act says the state should offer low interest, interest-free loans to “equity seekers.” social and economic skills ”.

But Wright said these loans are not guaranteed to be available in the first licensing round, as the money to fund them will come largely from tax revenues generated by the industry.

“[The Office of Cannabis Management] will not be able to right all the wrongs in the financial services industry, ”Wright said.

The law does say, however, that existing state medical marijuana companies must pay an upfront fee sufficient to fund an incubator that can provide assistance to some of the new startups. Wright suggested that people are looking to tap into other incubator programs as well, including those not specific to cannabis.

She and members of Community Board 12 encouraged people to contact NYC Small Business Services for help in developing business plans and raising capital.

How will the Cannabis Management Board protect so-called “old” claimants who previously sold in the underground market? Will they have to show how they raised capital?

Wright said she was not sure exactly what type of documentation the Cannabis Management Office will request in the application process. But she assured the audience, “We don’t want to put in place a system that creates exposure for the people we want to protect.”

Will applicants be able to open a chain of dispensaries?

Probably not. Wright said she expects companies to be able to get only one retail license for a single location. The intention is “not to have a single entity with 10 stores at the moment”.

But that doesn’t mean there won’t be big dispensary chains in New York City. The state’s existing medical marijuana companies were each initially allowed to open four medical dispensaries. Under the new law, they will be able to double their total number of dispensaries to eight.

Will I need to have a lease on space for the company when I apply?

“We’re leaning so that you don’t already have to have it, but you might need a letter of intent,” from an owner, Wright said. She added that as part of the application process, people will likely need to inform their local community council of their plans, as one would when applying for a liquor license, which also involves knowing where the site will be. located.

“We really want to be able to have people who are ready to go, so line up your ducks,” Wright said.

A lot of people want to open cannabis dispensaries or salons. What other licenses should people consider overlooked?

The Marijuana Regulatory and Taxation Act sets out nine different types of licenses that businesses can apply for and details what each entails: grower, nursery, processor, distributor, retailer-dispensary, delivery, on-site consumption, adult co-op. and micro-enterprise.

“I don’t hear many people [talking about] processing and manufacturing, but I know there are a lot of manufacturers in our communities, ”Wright said. She noted that the processor licenses cover the production of edible products like candy and baked goods, which creates a good opportunity to establish a brand.

“Delivery is a fantastic option because it is designed to be a small business and create jobs as well as the potential for wealth,” Wright added. She said delivery companies would likely be limited to 25 employees in order to keep giants like Uber from entering the market.

“We are trying to focus on creating a space where monopolies can take control and kill all of our small businesses,” she said.


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