New York Cannabis: State of the State

05 Jan New York Cannabis: State of the State

The first year of legal adult-use cannabis in New York seems as good a year as any to continue the Canna Law Blog’s tradition of annual reflection on all things cannabis (and now psychedelics too!). 2021 has been a groundbreaking year for the cannabis industry in New York. We expect 2022 to be another year of pushing towards a fully functioning cannabis industry. Let’s take a look at the noteworthy events of 2021 and what we expect to see in 2022.

Noteworthy Events in 2021

The Marijuana Regulation and Taxation Act (MRTA)

It may have taken a few years, a global pandemic and a political scandal(s), but New York’s legislature finally passed a comprehensive cannabis law that legalized adult-use cannabis. The MRTA also expanded New York’s medical cannabis program and revamped New York’s cannabinoid hemp program. We have the framework for a fully functioning and equitable cannabis industry, delays in appointments and issuance of rules and regulations aside.

We won’t rehash the details of the MRTA, which you can read about here, here, here, here, and (watch) here (among other posts). The important thing is that adult-use cannabis is now legal in New York and we are finally moving forward.

The Cannabis Control Board and the Office of Cannabis Management 

Speaking of moving forward, on September 1, 2021 New York began the process of actually forming the Cannabis Control Board (CCB) and the Office of Cannabis Management (OCM). Starting with the appointments of Tremaine Wright as the CCB’s Chairwoman and Christopher Alexander as the OCM’s Executive Director, by the end of September 2021, all of the CCB board seats were filled (our writeups of the CCB board members are here and here).

CCB meetings

Beginning in October of 2021, the CCB began holding (semi) regular public meetings. As we have detailed in our summaries, the meeting agendas have been primarily administrative in nature as the CCB and OCM build out the foundation of New York’s regulatory agency. Separately, the CCB and OCM have pushed forward on expanding two programs as required by the MRTA…

Expansion of New York’s medical cannabis program

Straight off the bat the CCB expanded New York’s previously restrictive medical cannabis program. Here is our summary. Here are the cliff notes: expanded permissible prescribers, maximum supply for patients increased to a 60 day supply, and patients being able to purchase whole flower.

Rollout of the revamped hemp cannabinoid program

The CCB has implemented significant changes to New York’s cannabinoid hemp program. We provided summaries here and here. The big ticket items: 1) cannabinoid hemp applications are being processed by the OCM, 2) a new license type was created for “Cannabinoid Hemp-Farm Processors” that allows for manufacturing flower products for hemp grown by the licensee, and 3) adding a “craft” definition of cannabinoid products.

On the horizon for 2022

Two things happened around the turn of the year that are immensely significant to New York’s adult-use cannabis industry. First, we passed the opt-out deadline for municipalities on December 31, 2021. Second, CCB Chairwoman Tremaine Wright made a public statement on the CCB’s issuance of adult-use rules and regulations.

Municipality opt-out deadline

As of January 1, 2022, here is where we stand: 642 towns, villages and cities chose to opt-out of retail dispensaries and 733 municipalities chose to opt out of on-site consumption lounges. For those counting at home, that is a 42% opt-out rate for retail dispensaries and a 48% opt out rate for on-site consumption lounges. Those numbers may seem big, but there are two important things to remember.

First, a number of opted-out municipalities did so because they felt that there was a lack of information on how New York’s adult-use cannabis industry is regulated. That justification makes a ton of sense given that any municipality can opt back in with respect to either license type at any time (and cannot opt-out if it initially opted in).

Second, New York’s opt-out rates are actually significantly lower than neighboring states. For example, the opt out rate for New Jersey is 70%. Big picture: the numbers reflect that New York is ready to embrace adult-use cannabis.

Timeline for rules and regulations

Did we bury the lede? CCB Chairwoman Tremaine Wright announced that she is hopeful that New York’s adult-use rules and regulations will be available for public comment this month (January 2022), and open for public comment until March 2022. The announcement came during the Crain’s New York Business Forum on December 15, 2021.

Chairwoman Wright added that the “she is sticking to the 18 month timeline that was proposed when the [MRTA] was enacted in March, but she hopes that businesses will be able to start applying for licenses before September.”

That second statement is significant in its own right, as Chairwoman Wright’s previous statement regarding the 18 month timeline for issuance of licenses was assumed to run from her initial announcement in November 2021. This new timeline would be critical, as it constitutes moving up licensure by 8 months.

Of course the devil is in the details. The use of “hope” means that this new timeline(s) is not set in stone or even a firm commitment. But it is an indication that the CCB and OCM are accelerating their internal processes.

New York cannabis in 2022

On the whole, our esteemed colleague Hilary Bricken said it best: “[we] see 2022 as a building year for New York cannabis, which will be a great opportunity for the state to develop its program in close concert with stakeholders of all kinds.” Here’s to a successful 2022 for New York’s cannabis industry! We plan to be here every step of the way.