How To Apply for a New York Cannabis License
In March 2021, New York became the fifteenth state in the U.S. to legalize recreational cannabis after The Marijuana Regulation and Taxation Act (MRTA) came into law. This was after a long campaign to decriminalize cannabis.
While medical cannabis has been available since 2014 in New York, until now operators in the state have not been able to apply for recreational cannabis licensing.
These are exciting times for one of the nation’s most populous and prosperous states, with the cannabis industry here projected to weigh in at $4.2 billion in revenues, according to the New York Times.
At Cannabis Law Solutions, our experienced team of cannabis business lawyers can help you apply for an adult-use license and navigate the legal hurdles to setting up your business and becoming established in the cannabis industry in New York state.
New York cannabis license types
Setting up your cannabis business involves multiple decisions but one of the most important at the beginning is which of the many available licenses you apply for.
This will depend on whether you want to grow cannabis, manufacture cannabis products, sell or distribute them or provide a place to consume them.
Each license type has different documentation requirements but all require stringent background checks from New York’s Office of Cannabis Management (OCM). The industry is set to be highly regulated.
The available adult-use license types in New York are:
- Adult-use cultivator license
- Adult-use nursery license
- Adult-use processor license
- Adult-use distributor license
- Adult-use cooperative license
- Adult-use micro business license
- Adult-use retail dispensary license
- Adult-use on-site consumption license
- Adult-use delivery license
- Registered organization adult-use cultivator processor distributor retail dispensary license
- Registered organization adult-use cultivator processor distributor license
What information is required to obtain a cannabis license?
Regardless of the license type, the OCM will require a lot of information about you, other owners and operators of your business, and the purposes/plans of the business itself before granting a cannabis license.
This includes the following information:
- Evidence of good moral character (fingerprinting will be required)
- Ownership and investment information (including corporate structure)
- Racial and ethnic information
- Information about the premises to be licensed
- Financial statements
Any false statements could lead to a criminal charge for perjury.
Financially, you will be required to demonstrate a minimum amount of liquid cash available to help the business navigate the first years of operation. So, you will need to support your license application with the following:
- Bank statements
- CPA letters
- Letter of Credit, or similar
- Business plan with a 2-3 year pro forma
To open an average-sized cannabis dispensary in New York, you should plan for a budget of between $400,000 and $1 million.
Microbusiness license holders planning a smaller operation may require around $1-2 million as cultivators, around $500,000 for processors, and under $300,000 for dispensaries or distributors.
Many potential cannabis business owners (especially growers) underestimate the true costs involved in launching a successful recreational cannabis business in New York.
Apart from the financial documentation, other requirements may include the following, depending on your business type:
- Environmental impact plan
- Security plans
- Workplace safety plans
- A workforce development, job creation and diversity plan
- Adverse event procedures
- Quality assurance procedures
- Recall procedures
- Packaging and labeling procedures
- Inventory control, storage and diversion prevention procedures
- Record-keeping procedures
- Waste disposal procedures
- Operating procedures
- Accounting/tax compliance procedures
- Transportation and delivery procedures
What’s the easiest way to get a recreational cannabis license in New York?
Your challenges in opening a recreational cannabis business don’t end with meeting your obligations to the Office of Cannabis Management and preparing a sufficient budget.
You also need to find a properly zoned location with permission from the local municipality (and building owner if leasing) to operate a business as a cannabis grower, processor, distributor or retailer.
The easiest way to obtain what you need for your business and comply with the municipality and state requirements is to work with one of our experienced cannabis business lawyers.
We can reduce the hours, days, and weeks it will take to gather the documentation you need. In the past years, we have helped many startup cannabis businesses prepare similar documentation in other states where adult-use cannabis was legalized previously.
How do I get a New York cultivation license?
The cultivation of cannabis is associated with high costs because of the need for construction, purchase and installation of specialist equipment, and climate control systems that use a lot of power.
When cannabis grows, these systems must remove moisture and heat and maintain a lab-like environment with controlled lighting. Other challenges include bugs, diseases, and mold. A cultivation license is, therefore, the most difficult and expensive type to acquire.
If you want to apply, you’ll need a healthy budget (as already explained), allowing around $400 per square foot on build-out.
Unless you have considerable expertise in growing cannabis and know how to operate a carefully controlled growing environment, it will be easier to obtain another type of cannabis license, such as a processing, distribution, or dispensary license.
How do I get a New York dispensary license?
It’s considerably easier to obtain a New York dispensary license than a cultivation license but that does not mean it’s straightforward.
You’ll need to plan for the main challenges, which include:
- Security: a dispensary may handle a lot of cash and cannabis, both of which need to be kept safe from internal and external theft with a good camera security system.
- Inventory control/record keeping: regulatory compliance for cannabis dispensaries requires a lot of paperwork, video storage, and cybersecurity.
- Delivery challenges: because of the high-value product, your delivery people may be targets for robberies and you need to take precautions against this.
How much do New York cannabis licenses cost?
When you apply for a cannabis business license in New York, the application and final licensing fees will differ depending on the license type, business size and your social-economic status.
First off, the application fee will range from a few hundred dollars to a few thousand dollars.
Other costs will include:
- Legal fees for an attorney to help prepare your application
- A down payment for purchasing a property or a security deposit if leasing (plus enough rent to cover the first growing period)
- The build-out costs (as explained above)
Get a cannabis business license in New York
Whether you want to grow, process, retail or dispense or deliver cannabis in New York, the legal hurdles can be substantial.
For informed legal advice, call (866) 329-0729 for a consultation with a knowledgeable attorney at Cannabis Law Solutions.