Cannabis Legalization and Licensing – the “Microbusiness” and What’s to Come in 2022

Jeffrey Hoffman is a licensed attorney in New York with over a decade of experience assisting clients ranging from large corporations to sole proprietorships. His practice focuses on advising clients in business negotiations and term sheet / contract drafting as well as securing licenses / permits in regulated industries such as cannabis and mobile vending.

On March 31, 2021, the Marihuana Regulation & Taxation Act (MRTA) became the law of the land in New York. Generally, it legalized adult-use cannabis (also known as recreational marijuana) in the state and established a basic framework for licensing the cultivation, processing, distribution, retail dispensing, delivery, and on-site consumption of cannabis. The legislation also created the Office of Cannabis Management (OCM) governed by a Cannabis Control Board.

Some parts of MRTA are already in full effect in New York. It is now legal for a person 21 years of age or older to possess and use cannabis products in various quantities depending on the kind of product (flower, vape, edible, etc). In a departure from other states, which strictly limit the consumption of cannabis to private homes or other private spaces, New York allows the smoking of cannabis in any location where smoking cigarettes is allowed.

Over the course of 2022, the OCM will draft a regulatory scheme for the implementation of MRTA. In particular, they will flesh out all of the rules for cannabis businesses and the 2 year renewable licenses for the cultivation, processing, distribution, retail dispensing, delivery, and on-site consumption of cannabis. As in other states, there will be a limit on the number of each kind of license available. With limited exceptions, businesses will only be allowed to have one of those kinds of licenses – for example, a processing licensee will not be able to also have a retail dispensing license.

However, MRTA provides for an additional kind of license – the microbusiness license.

This will be more broadly available and shall authorize the limited cultivation, processing, distribution, delivery, and dispensing of a licensee’s own adult-use cannabis and cannabis products. This makes the microbusiness license one of the few instances in which vertical integration will be allowed.

As with other permitting and licensing programs in New York, a special effort will be made to include various groups in the license pool. Such groups include service-disabled veterans, minority-owned businesses, women-owned businesses, distressed farmers, and those with an income lower than 80% of the median income of the county in which the license applicant resides.

New York has created some of the most liberal cannabis laws, not just in the United States, but anywhere in the world. Whereas most other jurisdictions have significant restrictions on where cannabis can be consumed, New York allows consumption anywhere cigarettes are allowed. Additionally, of all the jurisdictions which have legalized adult-use cannabis to date, New York has the most robust plan for on-site consumption lounges. It is quite likely that within the next five years, New York City (New Amsterdam) will take the title of “Cannabis Tourism Capital of the World” from the current holder: (Old) Amsterdam. Those that are interested in participating in this novel industry are well advised to start forming their business plans and preparing for the submission of their license application.

Law Office of Jeffrey Hoffman
200 West 81st Street
New York, NY  10024
(646) 692-4083
info@420jurist.com

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