Continuing the New York State Office of Cannabis Management’s momentum, Governor Kathy Hochul signed legislation creating a new type of adult-use cannabis license, the “Conditional Adult-Use Cannabis Cultivation” license. This license establishes a “fast-track” path for existing NYS hemp farmers to apply for a conditional license to grow adult-use cannabis in the 2022 growing season prior to opening of all adult-use licenses to the public, which likely will not occur until at least late 2022 or early 2023. The provisional program aims to create enough cannabis product in 2022 to jumpstart the future state cannabis market when it fully opens, so that NYS dispensaries and lounges will have NYS product available for immediate sale.
Under the law, only hemp farmers previously authorized as an industrial hemp research partner for the Department of Agriculture Markets who grew hemp for two of the past four years and whose licenses are in good standing as of December 21, 2021 (when the research program ended) may apply. All conditional adult-use cultivators must also agree to participate in a social equity mentorship program, where they provide training in cannabis cultivation and processing for social and economic equity partners, as well as meet sustainability requirements, to participate in this provisional program.
With a conditional adult-use cultivation license, farmers are permitted to grow outdoors or in a greenhouse for up to two years from license issuance. The license also allows farmers to manufacture and distribute cannabis flower products without holding an additional adult-use processor and/or distributor license (which will be required once the market fully opens), until June 1, 2023. Licensed cultivators are limited to one acre of flowering outdoor canopy or 25,000 square feet of greenhouse space (with up to 20 artificial lights). A split between outdoor and indoor space is allowed, if the total outdoor and indoor space does not exceed 30,000 square feet (with the greenhouse space itself accounting for no more than 20,000 square feet).
The Office of Cannabis Management has stated it will be developing a license application process for the provisional program as soon as possible. In the meantime, existing NYS hemp farm licensees whose licenses meet the aforementioned criteria should determine if this program is something they wish to pursue. As there are a limited number of eligible licensees, it can be assumed that partnerships with these licensees are highly valuable to those looking to break into the NYS cannabis market before it formally opens to the general public months, if not years, from now. More information regarding the new license can be found here.
This is not intended to be legal advice. You should contact an attorney to discuss your specific situation.