The “Cannabis Regulation and Taxation Act” should take effect on the first of April,
2020. There are plenty of new business opportunities in the New York cannabusiness
space and our legal team is gearing up for these exciting new ventures. These
businesses will need to be regulated by the Division of Alcoholic Beverage Control’s
new State Office of Cannabis Management. Our legal team is experienced representing
businesses in front of the State Alcoholic Beverage Control’s State Liquor Authority and
is well-positioned to hit the ground running for licensing and other regulatory issues. The
law anticipates that the same qualifications for on-premises consumption of alcoholic
beverages (restaurants and bars) will apply to retail establishments for on-premises
cannabis consumption.

Cannapreneurs includes growers, cultivators, processors, distributors, retail
dispensaries, on-site (on-premises) consumption businesses and ancillary businesses
such as producers of cannabis containing edible foods and beverages. However, similar
to the alcoholic beverage industry, the regulations are expected to impose a three-tier
system that restricts participation in both wholesale and retail segments, eliminating the
possibility for vertical integration of the cannabis industry in New York. There are some
exceptions for existing grandfathered medical marijuana licensees.

There are a number of licenses that will be available to cannapreneurs:

Adult-use cultivator license — for the acquisition, possession, cultivation and sale of
cannabis from the licensed premises to “duly licensed processors.”  This can be
combined with one processor and one distributor license.

Adult-use processor license — the acquisition, possession, processing and sale of
cannabis from an adult-use cultivator by such licensee to “duly licensed distributors.”

Processors must purchase cannabis from licensed cultivators and can sell cannabis to
distributors only. A processor licensee can have up to three processor licenses.

Adult-use distributor license — the acquisition, possession, distribution and sale of
cannabis from a licensed adult-use processor, microbusiness cultivator, or registered
cooperative to duly licensed retail dispensaries.  Similar to the alcohol industry’s tied
house restrictions, a distributor licensee may not have any economic interest in any
retail dispensary license.

Adult-use retail dispensary license — the acquisition, possession and sale of
cannabis from the licensed premises to cannabis consumers.  No person may have a
financial or controlling interest in more than three retail dispensary licenses. A retail
dispensary would not be permitted to sell more than one ounce of cannabis per
consumer per day, nor more than 5 grams of cannabis concentrate per consumer per
day.

On-site consumption license — Adult-use retail dispensaries (can apply to have an
on-site license (which cannot sell more than 1 gram of cannabis to a consumer for on-
site consumption).

Adult-use cooperative license — the acquisition, possession, cultivation, processing
and sale from the licensed premises of the adult-use cooperative by such licensee to
duly licensed distributors and/or retail dispensaries. No retail sales to cannabis
consumers.

Please feel free to contact our team if you are a cannapreneur and want to discuss a
new business opportunity in the cannabusiness space.