On September 12, the New York Cannabis Control Board (CCB) approved final regulations governing the adult-use cannabis industry in New York,[1] marking a long-awaited moment for industry participants and state regulators alike. The CCB’s approval signifies a significant step forward for the state’s cannabis market. The regulations are designed to govern all aspects of the industry, from cultivation and processing to distribution, retail, on-site consumption, and delivery services. Among these regulations, one rule stands out for its complexity and potential impact on industry participants: the definition of a “true party of interest.”
To fully understand the implications, one must appreciate the state’s decision to split the industry into two overarching tiers: cultivation and retail. Generally, individuals are prohibited from participating in both cultivation and retail business activities in New York.
The final regulations outline licensing requirements for a range of cannabis-related businesses, including “cultivation” licenses (nurseries, cultivators, processors, cooperatives/collectives, distributors, and microbusinesses) and “retail” licenses (retail dispensaries, on-site consumption, and delivery services). In addition, they also impose strict limitations to prevent any one entity from dominating both sides of the supply chain. For example, plant nurseries are prohibited from holding a retail dispensary, on-site consumption, or delivery license but may hold a cultivator, cooperative/collective, or microbusiness license.
New York’s regulations prioritize social and economic equity applicants, aiming to rectify historical disparities in the cannabis industry. Existing medical cannabis companies are also presented with opportunities to transition to the adult-use market. Yet, despite these commendable objectives, the road to these regulations has not been without its legal challenges, leading to delays in the rulemaking process.
Read more at regulatoryoversight.com