Foley Hoag: New York Adult Use Bill Goes Public: What Licenses Are Available?

Foley Hoag: New York Adult Use Bill Goes Public: What Licenses Are Available?

New York Adult Use Bill Goes Public: What Licenses Are Available?

New York has been the most recent focal point of adult-use legalization activity following news last week that the Governor and Legislature have seemingly come to consensus on an adult use legalization bill. Just this weekend, the New York State Legislature made public its drafts of S854 and A1248, with a goal of passing these bills and signing them into law sometime this week. Admittedly, every state approaches adult-use legalization differently, such as New Jersey utilizing hard caps on the total number of licenses available, Arizona proceeding primarily through its medical operators, or Virginia gradually opening its adult use market over the course of several years (though even that is subject to renegotiation).

New York’s general statutory scheme demonstrates a commitment towards moving away from vertical integration, generally prohibiting it with the exception of those applying as microbusinesses, and those already operating as verticals by virtue of being registered organizations (“ROs”) in the medical program. But even the microbusiness licenses and ROs contain their own exceptions and/or restrictions associated with this rule. For instance, microbusiness licenses may only engaged in more “limited” cultivation, processing, and/or dispensing, with the bill punting to the regulatory body what “limited” operations actually means. Moreover, while ROs may continue as vertically integrated in the medical space, they may only co-locate their medical and adult-use licenses at three of their dispensary locations.

Even as it relates to the other license classes, there is permissible partial integration, and/or the ability to hold multiple licenses of the same class. For instance, a cultivator and/or processor may apply to obtain a license of the other class as well as a distribution license, provided that cultivator/processor only distributes its own product. Cultivators and processors are also permitted under the bill to operate in more than one location. Moreover, a cultivation license may also hold a nursery license.

A cooperative license, in contrast, permits a licensee to cultivate, process, and distribute, but not retail, all under one license. Cooperative licenses, however, contain other restrictions, including, but not limited to, ensuring that that they are democratically controlled, i.e., each person in the cooperative gets one vote. An on-site consumption license may not hold any other license class, but may hold up to three separate on-site consumption licenses. While there are no hard caps on the total number of licenses that may be issued in New York, much discretion is passed on to the regulator to analyze the number, classes, and character of licenses statewide, as well as the proximity of applicants to other license holders.

New York’s adult use bill also contains an effective union mandate for license holders, wherein it identifies that labor peace agreements are not only a requirement to apply, but also an ongoing material condition of licensure. These labor peace agreements must, “at a minimum, protect[] the State’s proprietary interests by prohibiting labor organizations and members from engaging in picketing, work stoppages, boycotts, and any other economic interference with the entity.” Moreover, for applicants with twenty-five or more employees,” consideration will be provided in the application process as to “whether applicants have entered into an agreement with a statewide or local bona-fide building and construction trades organization for construction work on its licensed facilities.”

The goal of the preceding is simply to provide an overview, and we will be providing additional blog articles discussing such relevant areas of New York’s bill including, but not limited to, how New York will rank and score applicants, prioritize diversity, permit/restrict municipal oversight, and ensure the continuation and expansion of the medical marketplace.

Please feel reach out to our Cannabis Practice team for any questions on New York’s adult-use legalization.

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Cannabis Law Journal – Editorial Board Members

Editor – Sean Hocking

Author Bios

Canada
Matt Maurer – Minden Gross
Jeff Hergot – Wildboer Dellelce LLP

Costa Rica
Tim Morales – The Cannabis Industry Association Costa Rica

Nicaragua
Elvin Rodríguez Fabilena

USA

General
Julie Godard
Carl L Rowley -Thompson Coburn LLP

Arizona
Jerry Chesler – Chesler Consulting

California
Ian Stewart – Wilson Elser Moskowitz Edelman & Dicker LLP
Otis Felder – Wilson Elser Moskowitz Edelman & Dicker LLP
Lance Rogers – Greenspoon Marder – San Diego
Jessica McElfresh -McElfresh Law – San Diego
Tracy Gallegos – Partner – Fox Rothschild

Colorado
Adam Detsky – Knight Nicastro
Dave Rodman – Dave Rodman Law Group
Peter Fendel – CMR Real Estate Network
Nate Reed – CMR Real Estate Network

Florida
Matthew Ginder – Greenspoon Marder
David C. Kotler – Cohen Kotler

Illinois
William Bogot – Fox Rothschild

Massachusetts
Valerio Romano, Attorney – VGR Law Firm, PC

Nevada
Neal Gidvani – Snr Assoc: Greenspoon Marder
Phillip Silvestri – Snr Assoc: Greenspoon Marder

Tracy Gallegos – Associate Fox Rothschild

New Jersey

Matthew G. Miller – MG Miller Intellectual Property Law LLC
Daniel T. McKillop – Scarinci Hollenbeck, LLC

New York
Gregory J. Ryan, Esq. Tesser, Ryan & Rochman, LLP
Tim Nolen Tesser, Ryan & Rochman, LLP
Cadwalader, Wickersham & Taft LLP

Oregon
Paul Loney & Kristie Cromwell – Loney Law Group
William Stewart – Half Baked Labs

Pennsylvania
Andrew B. Sacks – Managing Partner Sacks Weston Diamond
William Roark – Principal Hamburg, Rubin, Mullin, Maxwell & Lupin
Joshua Horn – Partner Fox Rothschild

Washington DC
Teddy Eynon – Partner Fox Rothschild