(UPDATED 17 OCTOBER)
After officially passing the Marijuana Regulation & Taxation Act (MRTA) in March 2021, New York has been steadily building the foundations and infrastructure for its upcoming adult-use market.
With the recent announcement from the New York State Office of Cannabis Management, that the first 15 adult-use conditional processor licences have been approved, below we take a look at what regulations New York has put in place so far — and what is still to come.
Social Equity
New York cannabis regulators have made it clear from the start that social equity would be at the centre of all policies. Today, 25 August, applications will officially open for adult-use retail licences, reserved especially for people impacted by the drug war.
Currently the licences will require the applicant to:
- Have a cannabis arrest or conviction or a family member with a record
- Have experience owning or running a business.
New York have also committed to a number of restorative policies, including:
- The expunging or suppression of records for people with previous cannabis
- Provisions routinely used to over criminalise people of colour were removed;
- Aim to issue 50% of licences to equity applicants
- Use 40% of cannabis tax revenues supporting the communities most impacted by disproportionate enforcement.
Tremaine Wright, Chair of the state’s Cannabis Control Board and speaker at the upcoming Business of Cannabis conference in New York, said: “When we open New York’s first (adult-use) stores, owned and operated by New Yorkers harmed by the misguided criminalization of cannabis, the shelves will be lined with infused edibles, topical creams and concentrated oils.”
Cultivation & Processing
In February 2022, Governor Kathy Hochul signed a new law that let hemp farmers apply for an Adult-Use Conditional Cultivator License. The license allows farmers to grow cannabis containing over 0.3% THC in order to prepare for the upcoming adult-use market. Currently the number of licensed cultivators is 242.
The first 15 processing licenses were handed out earlier this month. These licenses mean that companies in New York will be able to start making infused products such as vapes, oils and edibles. The hope is to provide a wide variety of products to consumers once the market fully opens up.
As of 20 September, home cultivation regulations have been announced for medical cannabis patients. These rules allow patients and carers to grow their own plants, helping to circumvent possible future supply issues.
The home cultivation laws state:
- Only certified patients and designated caregivers over 21 years of age or older can grow medical cannabis.
- Only one person may grow on behalf of each patient
- A patient can plant, cultivate, harvest, dry, process or possess 3 mature and 3 immature cannabis plants at any one time.
- A caregiver can home grow medical cannabis for up to 4 patients, but may only have a total of 6 mature and 6 immature plants at any time
Consumers
Even before the MRTA was signed last year, New York was already beginning to review cannabis consumer rights and regulations. In 2019, New York City adopted a law that stopped many employers, labour organisations and employment agencies from conducting pre-employment drug testing for THC, calling the tests “an unlawful discriminatory practice.”
Similarly, landlords are not allowed to discriminate against tenants who consume cannabis, although they can still ban smoking or vaporising on the premises.
According to the Office of Cannabis Management website, the laws for consumers currently say:
- It is legal for adults 21 years or older to possess 3 ounces of cannabis and 24 grams of cannabis concentrate (edibles, oil).
- It is legal for adults 21 years or older to consume cannabis in a private home or in most places tobacco can be consumed.
- It is legal for adults 21 years or older to “share” cannabis (without compensation) with other adults
- It is illegal to cross state lines with cannabis.
- It is currently illegal to grow cannabis plants in your home
- It is illegal to distribute or sell cannabis without a licence.
- It is illegal to drive under the influence of cannabis.
Advertising
In June this year the Cannabis Control Board approved an advertising, labelling and packaging law that finished its public comment period on 15 August. If approved, the law would introduce a number of key regulations:
- Labels for cannabis products must include the serving size, potency, ingredients, and directions for usage and storage.
- Packaging must not be likely to appeal to those younger than 21 years. This includes cartoon characters and sweet references.
- No celebrity endorsements from those younger than 21
- Ban on ‘stoner’ language such as ‘pot’ ‘chronic’ and ‘weed’.
- Misleading claims of health benefits and indications that the product is “safe” or “organic” are prohibited
- Actual images of marijuana or people vaping or smoking are also not allowed.
Advertisers must also bear in mind that “the licensee has to have reliable evidence that at least 90%, unless otherwise determined by the Office, of the audience for the advertisement is reasonably expected to be twenty-one years of age or older.” This is a higher percentage than in other states.
New York: The Next US Cannabis Mega-Market?
The North American Cannabis Report: 3rd Edition, recently released in collaboration between Prohibition Partners and Business of Cannabis, projects that the adult-use cannabis market in North America could be worth US$66.4 billion by 2026.
Despite the slow pace of federal cannabis reform in the UnitedStates, some sizable legal state markets have either kicked off impressive adult-use sales or have big plans for the near future.
Anticipation is highest for the Northeastern states in the US. New York’s incoming adult-use mega-market isn’t going to be ready until 2023 at the earliest, according to regulators. With medical sales reaching US$467.2 million in the state in 2021, it should be worth the wait: Prohibition Partners projects the market will reach nearly US$1.5 billion in its first year of sales, and US$2.87 billion by 2025. It will be a boon for tax revenues, too, with analysts predicting adult-use sales to bring in an estimated US$300 million annually.
In the meantime, New York has expanded its medical programme and allowed medical dispensaries to sell cannabis flower. Possession of up to three ounces is also now legal, although the state has seen a proliferation of illegal activity as regulators hammer out the details around licensing, marketing and retail operations.
New York’s cannabis regulations are continuing to be built and changed as the first fully legal adult-use sales come closer. Business of Cannabis: New York will laser focus on New York and its surrounding states, with discussions on policy, investment, social equity and licensing – getting to grips with the key challenges facing this huge new market.
Get the knowledge you need to succeed in this promising emerging market and join us on 3 November.
