Cannabis Control Board Approves First Adult-Use Processor Licenses

The New York State Cannabis Control Board (“CCB”) approved 15 Adult-Use Conditional Processor (“AUCP”) licenses during its public meeting today, adding a key link in the state’s budding adult-use cannabis supply chain.  Pursuant to the legislation signed by Governor Hochul in February, which we wrote about here, processors who hold a Cannabinoid Hemp Processor license from the Office of Cannabis Management (“OCM”) qualify to apply for the adult-use conditional processor license.  To be eligible to apply for a conditional adult-use processor license, a processor must:

  • Have applied for a cannabinoid hemp processor license before January 1, 2022;
  • Hold an active cannabinoid hemp processor license issued by the OCM; and
  • Have an ownership interest of 51 percent or more of the entity that is the licensee.

The Adult-Use Conditional Processor license authorizes the license holder to process and distribute their own cannabis products (over 0.3% THC), using cannabis flower grown by New York farmers, for a period of two years or until they transition to a non-conditional processor license. Processors are required to participate in a mentorship program for social equity applicants and an environmental sustainability program. The application window opened on June 28, 2022 and closes on August 31, 2022. Applications are being reviewed and approved on a rolling basis.

The CCB also approved 19 more adult-use cannabis conditional cultivator licenses, growing the total number of approved licenses to 242 from a pool of more than 300 applications. The application window for the adult-use cannabis conditional cultivator licenses closed on June 30, 2022.

In addition, the CCB approved emergency lab testing regulations to expedite the expansion of laboratory testing facilities and sampling firms to ensure all cannabis grown by conditionally licensed cultivators has been tested before conditionally licensed retailers sell it in dispensaries. Under the emergency regulations, labs must be ISO 17025 accredited and use third-party sampling firms to select samples that will be tested. The emergency rules are largely identical to those the CCB proposed on June 1, but these rules go into effect immediately and must be re-approved every 90 days. There is no public comment period for the emergency rules. According to OCM Director of Health and Safety Nicole Quackenbush, the OCM will assess the comments submitted during the public comment period for the regulations proposed on June 1 and determine whether revisions are needed.

The Board also voted to hire John Kagia, the now former Chief Knowledge Officer of New Frontier Data, as the director of public policy for the OCM.

We will continue to closely monitor developments in connection with the rollout of New York’s adult-use cannabis program. If you have questions regarding the contact of this alert or New York cannabis laws and regulations generally, please contact me at coyediran@foleyhoag.com, or another member of the Foley Hoag’s cannabis team.

Aerial View of Liberty Island, New York

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