Under a bill in New York State, recreational cannabis has been legalized in New York (S854A), and many people that are interested in applying for a license to operate a business within this industry face several questions that they must/should answer before moving forward.
The most important question relates to the Cannabis Business License, and whether you will be looking to apply:
- Individually; or
- As a corporation with their principal location in New York State; or
- As a corporation organized and incorporated within New York State; or
- Where the majority of the ownership resides within New York State.
No matter which of the above applies, the application will be submitted to the newly formed Cannabis Control Board (made up of 5 members, the chairperson having been nominated by the Governor), which will have the “sole discretion to limit, or not to limit, the number of registrations, licenses and permits of each class to be issued within the State.”
Besides the structure of the application, the Cannabis Control Board will be able to afford priority to many classes of applicant, including:
- A member of a community that has been disproportionately impacted by the enforcement of cannabis prohibition;
- An applicant with an income lower than eighty percent (80%) of the median income level of the county where the applicant resides;
- Someone previously convicted of a cannabis-related offense,
- Or someone who has a family member or was a dependent of an individual convicted of a cannabis-related offense, prior to the date the Act becomes effective.
The cannabis control board has the following powers, under Article 2 of S854A Section 10:
- Discretion to issue or to deny any registration, license, or permit.
- Sole discretion to limit the number of registrations, licenses, and permits within each class to be issued, in a manner that prioritizes social and economic equity applicants with the goal of fifty percent (50%) awarded to such applicants, avoids market dominance, considers small business opportunities, and best reflects the demographics of the State.
- Sole discretion to revoke, cancel or suspend any registration or license, for cause, and to impose civil penalties.
It is the cannabis control board that will review every application and will decide, within their own purview, who succeeds in obtaining a license, and who does not.
In next month’s issue, I will explore Article 4 of S 854A, which addresses the license application, the selection criteria, as well as limitation of licensure.
Craig E. Yaris is a partner at Parlatore Law Group, with the experience and drive to handle all your Franchise, General Business Practice, and Mediation needs. Mr. Yaris can be reached at email@example.com and (646)970–3368.