MRTA Law, P.C. News

NY Cannabis Law (Chapter 7-A of the Consolidated Laws) can be found online at: https://www.nysenate.gov/legislation/laws/CAN

Tremaine Wright (Chairperson of Cannabis Control Board) and Christopher Alexander (Executive Director) were nominated by Governor Kathy Hochul and confirmed by the NYS Senate on September 1, 2021, marking the administrative and regulatory start to the Adult Use Cannabis industry in NYS. Recently, Adam Perry was appointed as the 2nd CCB member on September 9, 2021 by Assembly Speaker Carl Heastie. Also, on September 9, 2021, the third CCB member, former State Senator Jen Metzger, was appointed, by the State Senate. Finally, finally, CCB became fully constituted on September 22, 2021 with the Governor's appointments of Reuben R. McDaniel III and Jessica Garcia. Now that the CCB is constituted, OCM will work toward hiring staff, and starting the process to establish the regulations to accept Adult-Use Cannabis applications. MRTA Law, P.C. is monitoring the status of the upcoming NYS Adult Use Cannabis regulations to best prepare our clients.

March 9, 2022: Adult Use Conditional Retail Dispensary Regulations Proposed by NYS OCM: 9 NYCRR Part 116

October 5, 2021: NY Cannabis Control Board holds 1st Meeting (by MRTA Law, P.C. (c) 2021)

CCB Chairwoman Tremaine Wright announced immediate changes to the medical cannabis program, including: (1) permitting the sale of whole flower; (2) allowing any medical provider who can prescribe controlled substances to certify patients; (3) increasing the disbursement of medical cannabis to a 60-day supply; and, (4) permanently waiving the $50 registration fee for patient certification.

Also, announced the hire of OCM's Chief Equity Officer:

Jason Starr (Chief Equity Officer of Office of Cannabis Management): is an attorney with experience in civil rights and social justice policy, having worked for the New York Civil Liberties Union, the governor’s office and the Human Rights Campaign. He held an assistant counsel position in former Governor Cuomo's administration for nearly three years, and left in 2019 for a role as director of litigation at the Human Rights Campaign, a civil rights organization until recently led by Cuomo's former chief counsel, Alphonso David.


September 22, 2021: NY Cannabis Control Board now fully constituted (by MRTA Law, P.C. (c) 2021)

Tremaine Wright, Esq. (Chair - gubernatorial nominee - confirmed by Senate): former member of the New York State Assembly and currently serves as the first Director of the DFS Statewide Office of Financial Inclusion and Empowerment. Ms. Wright is an attorney, entrepreneur, small business owner and activist who is a second-generation Bedford Stuyvesant resident invested in preserving the rich legacy of her community and building a strong foundation for the future. She has dedicated her career to empowering and creating opportunities for her neighbors and her community.

Ms. Wright was elected to the New York State Assembly on November 8, 2016. She served the 56th Assembly District of Brooklyn, NY which represents the Bedford-Stuyvesant and Northern Crown Heights neighborhoods. She served as Chair of New York State Black, Puerto Rican, Hispanic & Asian Legislative Caucus and Chair of the Assembly Subcommittee on Foster Care.

As the former Chairwoman of Community Board 3, Ms. Wright fostered longstanding relationships with past and current elected officials, community leaders and a cross section of local residents committed to improving Central Brooklyn. She has served on CB3 for 13 years and previously held positions as the Executive Secretary, Treasurer and Budget Coordinator.

She has practiced law at Brooklyn Legal Services and private law firms. While working as an attorney at major law firms, Ms. Wright also served as a pro bono lawyer for the Volunteers of Legal Services' Incarcerated Mothers Project.

Ms. Wright also owned and operated Common Grounds: a Neighborhood Coffee House from March 2006 to September 2015. She opened the shop after realizing that her neighborhood lacked an adequate number of eateries and gathering places. Ms. Wright is a graduate of Duke University and the University of Chicago Law School.

Reuben R. McDaniel III (gubernatorial nominee): is the President and Chief Executive Officer of DASNY. Mr. McDaniel's appointment was confirmed by the New York State Senate on June 10, 2020. Mr. McDaniel is responsible for the overall management of DASNY's administration and operations. Mr. McDaniel joined DASNY in 2019 as an accomplished investment banker with more than 30 years of experience in financial services, including public finance, personal wealth management, corporate finance and private equity. During his career in public finance, he participated in more than $75 billion in tax-exempt bond issuances throughout the country. Mr. McDaniel also founded an investment advisory firm, where he managed more than $50 million in investment portfolios and business assets for a variety of professionals. Prior to, Mr. McDaniel served as Chair of the Atlanta Board of Education for Public Schools, where he led a diverse group of constituents and served as a voice for the community of parents. He holds a Bachelor of Arts degree in economics and mathematics from the University of North Carolina at Charlotte and a Master of Business Administration from the University of Texas at Austin.

Jessica Garcia (gubernatorial nominee): is Assistant to the President of the Retail, Wholesale Department Store Union, UFCW, a national labor union representing workers along the food supply chain, as well as workers in non-food retail and healthcare. She previously served as Deputy Political Director for the RWDSU, where she worked to advance the union's legislative and political agendas. Prior, she served as Director of Programs and Organizing at New Immigrant Community Empowerment and spent her early career advocating for fair funding for public schools in New York City. She currently serves as chair of board of the New York Committee for Safety and Health and the Advocacy Institute, vice-president of the Rural & Migrant Ministry board of directors, and member of the board of the Costa Rican-based organization, Vivir El Sueno. Originally from Honduras, Jessica is a graduate of the Silberman School of Social Work at Hunter College and Harvard University.

Adam Perry, Esq. (Assembly appointed): partner at Hodgson Russ LLP where he focuses on employment litigation, and has represented nonprofits, governments and businesses in state and federal courts. Mr. Perry has deep roots in Buffalo, having attended Erie County Community College and the University at Buffalo, and currently serves as a board member and chair of Niagara Frontier Transportation Authority Aviation Committee, as well as chair of the Citizen Planning Council. He graduated from the University of Michigan Law School.

Jen Metzger (State Senate appointed): elected to the New York State Senate in 2018 to represent the 42nd District, a largely rural district in the Hudson Valley and Catskills that includes all of Sullivan County, and parts of Orange, Ulster, and Delaware Counties. Committed to improving the lives and opportunities of those she represented, Senator Metzger’s legislative accomplishments and community-level initiatives spanned a wide range of issues, including environmental protection, agriculture, education, health, and broadband access. She championed reforms to expand voter participation and reduce the influence of money in politics, and in her own campaigns refused corporate and lobbyist contributions. Senator Metzger earned a B.A. with High Honors in Government from Oberlin College in Ohio. She worked as the Public Affairs Coordinator for the United Nations Association in New York for a number of years before returning to school and earning a Ph.D. in Political Science at Rutgers University.


Christopher Alexander (Executive Director of Office of Cannabis Management): criminal justice reformer, advocate, and policy expert. He is a native of Hollis, Queens and the son of immigrant parents who came to the United States from the Caribbean island of Grenada.

Chris is a seasoned politico with significant policy making experience. He has previously worked for the New York State Democratic Party, as a Legislative aide to Congress, as a Policy Coordinator for the Drug Policy Alliance, and as Counsel to the New York State Senate where he managed the work of several Committees providing oversight over the affairs of New York City and over New York State's criminal justice system.

Chris uses his legislative and organizing experience in the fight to end mass criminalization and the drug war. He is an advocate for social justice, racial equity, and a champion for civic engagement.

He is the architect of the Start SMART NY campaign to end marijuana prohibition and the lead drafter of the Marijuana Regulation and Taxation Act, New York's marijuana legalization bill.

Chris currently works as the Government Relations and Policy Manager for Village, a multi-state cannabis company. He is charged with engaging with legislative leaders and supporting policy makers as they look to expand access to cannabis in their state. He received his BA in political science from Syracuse University and his JD from CUNY School of Law..

August 6, 2021: No NYS Cannabis Council Board Members anticipated soon... however, NYS' Cannabis has taken shape under the existing Cannabis Law statutes enacted on March 31, 2021 (by MRTA Law, P.C. (c) 2021)

Multi-State Operators (MSOs) of Cannabis in other states, existing New York businesses, and adult consumers have all been waiting with bated breath for the CCB to be fully constituted, so necessary regulations can be promulgated and rules established to administer this multi-billion industry. While many are awaiting the new regulations decide on whether to participate in this burgeoning industry, those who read the Marijuana Regulation & Taxation Act (MRTA) enacted on March 31, 2021 will readily see how prescriptive NY Cannabis Law actually is, and how the general contours of the forthcoming Adult Use industry have already been drawn.

The forthcoming OCM regulations will exist in New York Code of Rules and Regulations (NYCRR) after notices of rulemaking and adoption (along with public hearings and comment period in between) under the NY State Administrative Procedure Act (SAPA). That being said, the 128-page, single-spaced MRTA law, which gave birth to NY Cannabis Law (codified as Chapter 7-A of NYS Consolidated Laws) 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 NY Cannabis Law already covers details big (no import or export of cannabis, and prioritizing State business in event of federal legalization under § 125(10)) and small (yes, the law allows you to use your credit card to make purchases at Retail Dispensaries under § 125(4), and no, you cannot purchase your Cannabis where you buy your beer under § 72(3)). 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 Office of Cannabis Management will be housed as a separate office within NYS SLA, and staff from SLA may be transferred to OCM to administer the Adult Use Cannabis program. The statutes in Cannabis Law partly mirrors NY Alcohol Beverage Control Law, with both having similar general statutory provisions for “Severability” and injunctive relief against prohibited conduct, and separate Articles based on type formerly illicit product (Medical, Adult Use and Hemp have their own Articles within 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. The Cannabis Law regulations will be promulgated under Title 9 (“Executive Department”) of NYCRR under its own subtitle; and, just like Subtitle B (Division of Alcoholic Beverage Control), Chapter 1, Rules of the State Liquor Authority, for beer, wine and alcohol, there will be subchapters for “Permits” and “Licenses” available for application, “Hearings and Revocations” to govern the administrative process, “Sales, Deliveries and Records” to detail the recordkeeping requirements and minimum and maximum margins allowable by regulation for Adult Use Cannabis.

NYS’ License Bifurcation and “Social and Economic Equity” Components

NYS’ general cannabis laws reflect the common and reasonable approach taken in other states, that no Adult Use / Recreational cannabis can be imported to, or exported out of the State (Cannabis Law § 125(10)), 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 (Cannabis Law § 125(3)), and that nobody under 21 may obtain or consume this product. However, on the supply side, NYS focused on bifurcating the cannabis industry between 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” across all license categories, and offer smaller businesses and entrepreneurs (especially women, minorities, distressed-farmers, service-disabled Veterans and those with prior Marijuana convictions) a viable shot to succeed. Also, new and distinct is the creation of the “Microbusiness” and “Cooperative” licenses, which allow for greater vertical integration by small businesses, and a confederation of different smaller Producers, respectively. This separation of actors within the Adult Use cannabis industry is supported by various statutes that prohibit cross-ownership of licenses; for example, Cannabis Law § 80 prohibits the producers having any direct or indirect interest in retailers—including prohibiting loans, gifts or providing services to any licensee that may “influence such [retailer] licensee to purchase the product of such cultivator or processor or distributor.” Moreover, this statute prohibits exclusive sales agreements between producers and retailers, and automatically voids such agreements and subjects the involved licensees to administrative enforcement and penalties.

Focusing on the little guys – at least under the law

Under Cannabis Law § 10(24), CCB must review the impact of Adult Use licenses issued (after two (2) years from the first retail sale) that have “substantial market share” for any license category to determine whether such licensees are prevents the “goals of inclusion of social equity licensees, fairness for small businesses and distressed farmers, adequate supplies of cannabis and prevention of dominant marketplace participation in the cannabis industry.” Statutes also prescribe that major licensees may have their license modified to restrict their market share, and such affected licensees are entitled to a formal hearing to appeal any modifications. (For any licensee such review shall include violations of NYS labor law and labor peace agreements.). Additionally, even if a licensee has its market share reduced, an existing collective bargaining agreement that was reached cannot be restricted even if the market is restricted. Most importantly, OCM has authority “to limit, by canopy, plant count, square footage or other means, the amount of cannabis allowed to be grown, processed, distributed or sold by a licensee.” (NY Can Law 65(4)). So any business with thoughts on dominating the entire market may soon find that OCM has a large set of wing clippers. The underlying politics behind the enactment of the MRTA are extensive enough to fill an entire treatise by itself, but suffice it to say, politicians fought hard to include statutory provisions to limit marketplace dominance, and establish an affirmative action plan to goal of at least +50% of all licensees be awarded to women, minorities, distressed-farmers, serviced-disabled Veterans and those who with prior Marijuana convictions.

Licenses are valid for 2 years; fees are unknown and will be prescribed by regulation

Under the MRTA, NYS expects licensing and permit fees to “generate sufficient total revenue to, at a minimum, fully cover the total costs of administering the Office of Cannabis Management” (Cannabis Law 65(2)), and licenses require renewal after two (2) years from issuance date. So essentially, fees will be determined by the amount of administrative resources needed to establish and operate OCM, as well as the number of licenses up for application. Transfer of ownership of these licenses and Special Use permits (other than to corporate form) is generally prohibited by law, and licenses themselves cannot be used as collateral for any loan under § 128. Additionally, OCM will scale registration and licensing fees based on business size and capacity, and for social and economic equity applicants, fees will be adjusted or wholly waived. So potential business owners have a LOT to think about when identifying their “applicant.” (Also, of note, Legal Permanent Residents (LPRs) can apply and obtain a Cannabis license, if otherwise eligible, though there are prohibited from obtaining a State Liquor Authority license or permit – so this new industry certain represents a tremendous opportunity for new Americans.)

NY Cannabis Law §§ 62 (Application Information) and 66 (License Renewal) Detail the Application Requirements

The MRTA is detailed enough to prescribe nine (9) separate categories of information to be provided under Cannabis Law § 62, including requirement of providing “racial and ethnic diversity,” ownership information, fingerprints, financial statements of premises for which the license is sought, in addition to “any other information prescribed by regulation.” Additionally, to ensure that certain leeway is provided to applicants completing applications, the law permits OCM to accept applicant self-attestation for certain information under § 62(6) (OCM “may rely upon the information furnished in such application and in any supplemental statement connected therewith, and such information may be presumed to be correct, and shall be binding upon registered organizations, licensee or licensed premises as if correct.”). Ostensibly, in a nod to “social and economic equity applicants,” § 62(7) permits OCM to waive the “submission of non-material information or documentation ... for any category of license or permit.” So basically, § 62 is detailed enough that many do not foresee additional significant regulatory conditions on the application process.

For Adult Use Cannabis license renewals, the § 66 contains ample details on how they should be conducted, including the express requirement that OCM mail a renewal application to licensees at least 90 days prior to expiration. Renewal applications will require “documentation of the racial, ethnic, and gender diversity of the applicant’s employees and owners” prior to extension approval; additionally, licensees may be subject to a “Social Responsibility Framework Agreement” to foster racial and gender diversity in the company as a condition of renewal under § 66(2). Moreover, the renewal process under § 66(6) (maybe they should have just skipped sub-section 6 and moved to 7?), the renewal application must include “evidence of the execution of their plan for benefitting communities and people disproportionally impacted by cannabis law enforcement.”

The extensive statutory framework in NY Cannabis Law leaves CCB and OCM to primarily fill in the details on the minimum requirements to operate each license or permit, the fees associated, and the number of licenses and permits in each geographic area. As much of the industry has already been defined, segmented and regulated under the MRTA, those thinking of entering this newborn market will only need those details to finalize their business decisions, but already have the general roadmap on how the Adult Use Cannabis market will launch in 2022/23 in New York State.