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New York cannabis: distribution licenses

In late December 2022, the Office of Cannabis Management (OCM) released its first proposed adult-use cannabis rules and regulations for New York. One of the more nuanced portions of the Proposed Regulations relates to those applying for a distribution (or distributor) license and the do’s and don’ts once awarded a distribution license. First and foremost, a cultivator that has a processor license may apply for and obtain one distributor license. Additionally, those holding a conditional cultivation license shall be given priority by the OCM in review of its application for a distributor license. 

New York cannabis distribution license – the do’s
Let’s start with some of the do’s for those holding a distributor license. The most obvious is that a distributor may acquire cannabis products from any duly licensed processor, possess said cannabis, and subsequently distribute and sell those cannabis products. A distributor may sell cannabis products to (1) another duly licensed adult-use distributor, or (2) to a retail dispensary, which may include a Registered Organization with Dispensing (ROD) or on-site consumption premises.

A distributor or its true party of interest may be a true party of interest in a cultivator, processor, cooperative, or microbusiness. Additionally, a distributor or its true party of interest may be a landlord, financier, or a goods and services provider to a cultivator, processor, distributor, cooperative, or microbusiness, subject to all restrictions governing such relationships, including, but not limited to, undue influence, control and true party of interest requirements.

New York cannabis distribution license – the don’ts
Some of the don’ts may be obvious, but others are more nuanced, which will likely be fleshed out in the update to the Proposed Regulations.

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