While many prospective New York cannabis entrepreneurs are awaiting the new adult-use regulations to decide whether to participate in this burgeoning industry, they should understand that the Marijuana Regulation & Taxation Act (MRTA) enacted March 31, 2021, already prescribes the general contours of this forthcoming market and how its revenue will be apportioned among the 11 categories of license holders.
And with the five-member Cannabis Control Board (CCB) now appointed, further specificity is expected soon.
The forthcoming regulations from the Office of Cannabis Management (OCM) will follow the release of the MRTA language earlier this year. The MRTA is analogous, and more detailed in certain areas, to other sister-states’ recreational cannabis regulations. While residents of other states may complain of “over-regulation,” New Yorkers may be complaining about “over-legislation,” as New York’s cannabis law already addresses matters both big (no import or export of cannabis, and prioritizing state business in the event of federal legalization) and small (yes, the law allows customers to use credit cards at retail dispensaries and, no, they cannot purchase cannabis at an establishment that sells beer).
Basically, the foundation of the adult-use cannabis industry has already been laid, and CCB and OCM will mostly fill in the details and administer this industry under existing MRTA law.MRTA says: Cannabis is to Hard Alcohol as OCM is to SLA
What we already know under the law is that the OCM will be housed as a separate office within New York State Liquor Authority (SLA), and staff from SLA may be transferred to OCM to administer the adult-use cannabis program.
The statutes in cannabis law partly mirror the New York Alcohol Beverage Control Law, with both having similar general statutory provisions for “Severability” and injunctive relief against prohibited conduct, as well as separate articles based on the type of formerly illicit product (medical, adult use and hemp each have their own articles within the cannabis law). Additionally, the application criteria and documentation requirements are markedly like those prescribing licensing and permits for alcohol, wine and beer—except for “social and economic equity” and other additional components for adult-use cannabis licenses.
Moreover, the restrictions on the physical premises for retail dispensaries and on-site consumption licensees are the same for liquor stores—minimum of 500 feet away from schools and 200 feet from houses of worship.New York’s License Bifurcation and “Social and Economic Equity” Components
New York’s general cannabis laws reflect the common approach taken in other states, that no adult-use or recreational cannabis can be imported to or exported out of the state (Cannabis Law § 125(10)), and that employees in the industry must be at least 18 years of age, and 21 or over if they have customer contact inside retail stores.
However, on the supply side, New York focused on segmenting the cannabis industry among cultivators, nurseries, processors and distributors (producers), and the retail dispensaries, delivery companies, and on-site consumption (OSC) businesses (retailers).This degree of segmentation of the cannabis market is intended to limit marketplace dominance by any participant, “spread the business”