As will be discussed in greater detail by the Foley Hoag’s cannabis practice team on its webinar scheduled for September 13, 2023, the New York Cannabis Control Board (“CCB”) and Office of Cannabis Management (“OCM”) took substantial and meaningful steps to open up the full-adult use market in short order. As many may be aware, adult-use cannabis licenses to this point have been restricted to businesses meeting very limited threshold requirements (based on cannabis convictions, participation in the state authorized hemp program, etc.), with the vast majority of market participants waiting over the last year and a half for a more open licensing round. However, on September 12, 2023, the CCB ultimately voted to open the general application licensing pool in early October, i.e., less than a month away.

In particular, the CCB voted to take the following steps to immediately open the market: (1) finalizing adult-use regulations; (2) approving the application form; and, perhaps most importantly (3) setting the specific application window and deadlines for the submission of these applications. By taking this action, the CCB has directed OCM to open the next phase of adult-use cannabis in New York, with the new application period opening on October 4, 2023 at 8:00 A.M., and close on December 4, 2023 at 5:00 P.M. Importantly, OCM will commence its first review and approval process for applicants who apply with control over a proposed retail dispensary or microbusiness location by 5:00 P.M. on Friday November 3, 2023, with the application window remaining open for other types of licenses, as well as other retail dispensary and microbusiness locations applying for provisional licensure, until the December 4, 2023 deadline.

While Foley Hoag’s cannabis practice team will discuss these developments in greater detail on its webinar scheduled for September 13, 2023, what information have we learned from the adoption of the application form itself? Below is a breakdown of the relevant application submission requirements.

Common Requirements for All Applications

All Applicants must:

1. Be 21 years or old, including anyone in the ownership structure
2. Be a U.S citizen or a person lawfully admitted for permanent residence in the United States including all principal officers and directors for a privately held business
   1. For a publicly traded business each of the principal officers and over one-half of directors must be citizens of the United States or lawfully admitted permanent residence of the United States
3. Provide the FEIN of the business
4. Provide the name, SSN/EIN and contact information and ownership percentage of all True Parties of Interest.
   1. As background a True Party of Interest is:
      1.  the applicant or licensee officer
      2. stockholder
      3. each person who makes up the ownership structure of each level of ownership for an applicant that have a multilevel ownership structure
      4. a person with a right to receive aggregate payments in a calendar year as a part of a risk sharing or goods and services agreement, that exceeds the greater of the following
         1. 10% of gross revenue
         2. 50% of net profits
         3. $250,000 from an applicant or licensee
      5. A person with a financial interest in the applicant or licensee
      6. A person who has authority to or exercises control over the applicant or licensee by controlling interest or otherwise
      7. A person that assumes the responsibility for the debts of the applicant r license
      8. A spouse of any individual who is an owner, officer, or stockholder
      9. Any other person that may have a direct or indirect interest as may be determined in guidance by the Office
      10. Passive investors are true party of interest that include individuals who have an ownership interest in shares
          1. 5% of outstanding shares or interest in an applicant or licensee that is publicly traded
          2. 10% of outstanding shares of a privately held ROD license and microbusiness license
          3. 20% of outstanding share or interest of any other privately held entity
5. Provide the ownership, management, and financial information
   1. Explain the circumstances of a conviction if someone in the ownership structure was convicted of a felony within the past 5 years (1) involving fraud, money laundering, forgery, or other unlawful conduct related to owning/operating a business, and (2) involving hiring, employing, or using a minor in transporting, carrying, selling, giving away, preparing for sale, or peddling, any controlled substance to a minor, or selling, offering to sell, furnishing, offering to furnish, administering, or giving any controlled substance to a minor, including providing documentation explaining the circumstances

1. The application asks all applicants to:
   1. Select the business that is being applied for including:

1. 1. 1. Entity type (if the business is an LLC or other type)
      2. The legal name and any additional names
      3. The business addresses (all physical and mailing addresses)
      4. Contact information including all phone numbers, fax numbers, email addresses and websites
   2. Select the industry classification
      1. NAICS Code
   3. Provide the information of all owners, principals, or other responsible persons associated to the business
      1. This includes contact information, social security or federal employee identification numbers, ownership percentage and profit distribution percentage
      2. Additionally, the person filling out the application must be one of the owners or principals listed in the application
   4. Provide list of any retail dispensaries within 2000 ft of proposed location
   5. Provide list of any house of worship within 200 ft of proposed location
   6. Provide list of any school within 500 feet of proposed location
   7. Provide the list of any community/ municipal facilities within 500 ft of proposed location
   8. Provide list of any retail dispensaries within 2000 ft of proposed location
   9. Provide list of any house of worship within 200 ft of proposed location
   10. Provide list of any school within 500 feet of proposed location
   11. Provide the list of any community/ municipal facilities within 500 ft of proposed location

1. The applicant must also state if:
   1. The applicant holds a license from New York State for a retail dispensary, on-site consumption or delivery
   2. The applicant has a direct or indirect interest in or is a true party of interest in another Cultivator, cooperative, microbusiness ROD or ROND
   3. The applicant completed a Workforce or Training program
   4. The applicant is licensed as a cultivator, processor or distributor
   5. If the applicant applied for a CAURD license
2. The applicant must:
   1.  Provide a copy of the cap table showing ownership above 10%, on a look-through basis for any and all “warm bodies”, including any person with any vested future rights to ownership or revenue, except passive investors.
   2. Provide a list of any subsidiary entities.
   3. Describe any and all ownership changes between the formation of the applicant entity and the date the application is submitted.
   4. Submit a “plan in case the applicant, owners, or TPIs decide to leave the business, there is a material change in the applicant’s ability to operate the business, or the applicant becomes otherwise unable to operate the business”.
   5. Provide copy of Labor peace agreements (agreements entered with employer and union)
   6. List the inventory tracking system
3. Location Requirements:
   1. Provide Notice to Municipality (must be filed at least 30 days prior to filing an application!)
   2. Provide copy of lease or proof of ownership
   3. Provide GPS coordinates
   4. Name of landlord if a lease
   5. List any other “licenses issued by state or federal authorities related to operations of the location”
   6. Provide copies of all other such licenses [note that this will be impractical if the property is multi-tenant and applicant is leasing]
   7. Provide a description of any other business or business activities conducted at the location

Requirements for Retail Applications

1. Asks what business activities will applicant perform at location:
   1. In-person sales with delivery
   2. In-person sales without delivery
   3. Selling non-cannabis products
   4. Operate a limited retail consumption facility
      1. Provide information on if the limited retail consumption facility with be at the same location or a different location
2. Certificate of authority issued by New York State Department of Taxation and Finance
3. Asks if the applicant holds a license from New York State for a retail dispensary, on-site consumption or delivery
4. Asks if the applicant holds a license from New York State for an cultivator, processer, distributor, microbusiness, ROND, registered organization, nursery, or cooperative
5. Asks if the applicant has a direct or indirect interest in or is a true party of interest, Passive Investor, landlord, financier, or MSA provider, in another Cultivator, Cooperative, Microbusiness ROD or ROND anywhere outside of NYS
6. Asks does applicant have direct or indirect financial interest in 3 other retail dispensaries the state (not including being a Passive Investor)
7. Asks if the applicant applied for a CAURD license.

Requirements for Cultivation Applications

1. Asks if the applicant holds an AU retail dispensary, consumption, or delivery license
2. Asks if the applicant has a direct or indirect interest in or is a true party of interest in another Cultivator, cooperative, microbusiness ROD or ROND, or lab

1. Asks if applicant is licensed as an AUCC
2. Select the type of cultivator license:
   1. Indoor
   2. Outdoor
   3. Mixed light
   4. Combination
3. Select the tier of cultivator license:
   1. Tier 1: not exceeding 5,000 square feet
   2. Tier 2: greater than 5,000 square feet but not exceeding 12,500 square feet
   3. Tier 3: greater than 12,500 square feet but not exceeding 25,000 square feet
   4. Tier 4: greater than 25,000 square feet but not exceeding 50,000 square feet
   5. Tier 5: greater than 50,000 square feet but not exceeding 100,000 square feet
4. There is an application section related to Registered Organization Dispensary (ROD) and Registered Organizations No Dispensary (ROND) eligibility
   1. Must be an existing ROD or RO to apply
   2. Must have four operational medical dispensaries in New York State
   3. Can’t be a True Party of Interest or have direct or indirect interest in another adult use entity
   4. Must provide the type and tier for cultivation
   5. Must provide if the ROD will engage in additional activities including:
      1. processing ($75,000 license fee)
      2. distribution ($100,000 license fee)
5. Providing what business activities will be performed at the location.
   1. Cultivation
   2. Drying/curing
   3. Storage
   4. Packaging
   5. Waste rendering

Requirements for the Adult Use Microbusiness License:

1. Can choose three cannabis cultivation types:
   1. Outdoor- canopy cannot exceed 10,000 square feet
   2. Mixed-light, which is cultivation of mature cannabis in a greenhouse, hoop house with cannabis cultivation lights, glasshouse using a combination of sunlight and lighting with lighting requirements meeting photosynthetic photon efficacy standards for mixed-light. – canopy not to exceed 5,000 square feet
   3. Indoor- canopy not to exceed 3,500 square feet
2. Will need to engage in one of the following additional activities
   1. Processing
   2. Distribution
   3. Retail sales
3. Asks if the applicant hold a license from New York State for a retail dispensary, on-site consumption or delivery
4. Ask if the applicant has a direct or indirect interest in or is a true party of interest in another Cultivator, cooperative, microbusiness ROD or ROND
5. Ask to provide organizational documents and if there are any subsidiaries
6. Need to provide location information in addition to addresses including:
   1. GPS coordinates
   2. What the location will be used for:
      1. Adult-Use Cultivation
      2. Adult-Use Processing
      3. Adult-Use Distributor
      4. Adult-Use Retail Dispensary
      5. Adult-Use Microbusiness
   3. How does applicant have control over property and the proof:
      1. Ownership
      2.  Lease Agreement with name of landlord
   4. List other individuals with interest in the property
   5. Certificate of occupancy and compliance with building codes
   6. Other licenses issued by the state or federal authorities
   7. If any other business is conducted at the location and a description of those business activities
   8. Is there any co-location with other licensee, provide the license number if so.
   9. Labor peace agreements (agreements entered with employer and union)
      1. List the name of the labor organization
      2. Upload a copy of the agreement
   10. Hours of operation
7. Business Compliance
   1. Need to state if the entity has twenty-five or more employees
   2. Need to state if the applicant entered into an agreement with a statewide or local bona-fide building and construction trades organization for construction work on its licensed facilities
      1. Upload copies of these agreements
   3. Need to state if the applicant incorporated or otherwise authorized to do business as a foreign company in the State of New York
   4. Enter the DOS ID that is stated on the certificate and upload the applicant entity certificate granted by the New York Department of State
8. License Specific Eligibility for Microbusiness
   1. Does the applicant hold a license in New York State for an adult use on-site consumption, or adult-use delivery
   2. Does the applicant hold a direct or indirect interest in or is a true party of interest, passive investor, landlord, financier, or management services provider, or by any other means, to a retailer dispensary, on-site consumption, delivery, ROD, registered organization, or cannabis laboratory licensee or permittee in New York State
   3. Does the applicant hold a direct or indirect interest in, or is a true party of interest  of another Adult-Use Cultivator, Adult-Use Cooperative, Adult-Use Microbusiness, ROD, or ROND
   4. Has the applicant completed and workforce training and mentorship programs offered by the Office
      1. Include a copy of the certificate of completion if so.
   5. Is the applicant licensed as an Adult-Use Conditional Cultivator and what is the license number
   6. If the applicant applied for a CAURD license and what is the license number

1. Distributor licenses
   1. License specific eligibility
      1. Does the applicant hold a license in New York State for an adult use on-site consumption, or adult-use delivery
      2. Does the applicant hold a direct or indirect interest in or is a true party of interest, passive investor, landlord, financier, or management services provider, or by any other means, to a retailer dispensary, on-site consumption, delivery, ROD, registered organization, or cannabis laboratory licensee or permittee in New York State
      3. Is the applicant licensed as an Adult-Use Conditional Cultivator and what is the license number
      4. Is the applicant an Adult-Use Conditional Processor and what is the license number
      5. Has the applicant completed and workforce training and mentorship programs offered by the Office
         1. Include a copy of the certificate of completion if so.
2. Processing licenses
   1. License specific eligibility

1. 1. 1. Does the applicant hold a license in New York State for an adult use on-site consumption, or adult-use delivery
      2. Does the applicant hold a direct or indirect interest in or is a true party of interest, passive investor, landlord, financier, or management services provider, or by any other means, to a retailer dispensary, on-site consumption, delivery , ROD, registered organization, or cannabis laboratory licensee or permittee in New York State
      3. Is the applicant licensed as an Adult-Use Conditional Cultivator and what is the license number

1. 1. 1. Is the applicant licensed as a Tier 1 or Tier 2 Cultivator
      2. What business activities are to be performed:
         1. Extraction; Infusing and Blending; and Packaging, Labeling and Branding (license fee: $7,000)
         2. Infusing and Blending; and Packaging, Labeling and Branding (license fee: $4,000)
         3. Packaging, Labeling and Branding (license fee: $2,000)

1. 1. 1. Is the applicant an Adult-Use Conditional Processor and what is the license number
      2. Has the applicant completed and workforce training and mentorship programs offered by the Office
         1. Include a copy of the certificate of completion if so.
   2. Location license details
      1. What business activities are intended to be performed:
         1. Extraction and activities related to extraction including:
            1. mechanical extraction methods
            2. A professional grade, closed-loop CO2 extraction system that is a supply equivalent to food or beverage grade of at least 99.5 purity
            3. Ethanol or alcohol based, provided that all ethanol or alcohol used shall be of a grade that meets or exceeds specifications of official compendiums as defined in section 321 of Title 21 of the United States Code
            4. A volatile solvent or hydrocarbon extraction method
               1. For this method a processor shall submit to the office, prior to receiving approval to commence extraction operations at a processing facility, documentation which demonstrates, to the satisfaction of the Office, the following additional requirements for all designated extraction equipment, rooms, or other areas where volatile solvents used for extraction are handled or stored
         2. Blending and infusing
         3. Packaging and labeling
         4. Branding, including the exclusive performance of white labeling agreements
      2. Does the applicant have a final certification letter from a licensed professional engineer or registered architect which certifies the completed installation of a professionally designed, commercially manufactured extraction system, that is compliant with all applicable state or local fire safety or building codes and submit a copy of this document
      3. Does application have a letter from the municipal jurisdiction’s fire marshal, or their designee, stating that a final inspection of the facility has been conducted and that the processor has demonstrated compliance with all applicable fire codes and/or regulations and submit a copy of this document
      4. Does the applicant have a certificate of occupancy, or equivalent document, form the local building official that all permits for extraction related rooms or areas have been closed as applicable

1. Retail Location License Details
   1. What point of sale/inventory tracking system being used
      1. Upload vendor contract or purchase order
   2. What business activities will be performed
      1. In-person retail sales no delivery
      2. In-person retail sales with delivery
      3. Selling non-cannabis products
      4. Operate a limited retail consumption facility
   3. Include a copy of Certificate of Authority issued by the New York State Department of Taxation and Finance for the retail location
      1. Include a copy of the confirmation if applied for a Certificate of Authority (license will not be issued until the Office receives a copy of the Certificate of Authority)
   4. Attest that all drivers are over 21 years of age

Social and Economic Equity Requirements

SEE eligibility is a separate application

1. Must select the individuals who meet the criteria of being:
   1. An individual from a community disproportionately impacted by the enforcement of cannabis prohibition
      1. must provide proof of residency in the community and proof of any conviction for a marijuana related offense
      2. * must have lived there either:
         1. Aggregate 3 of the first 18 years of life; or
         2. Aggregate 5 years at any point of life
   2. Minority Owned Business
      1. must provide quarterly payroll reports from inception if business has previously been operating
      2. must upload proof of certification if registered
      3. These individuals must make up no less than 51% of the “individual business principals” [query what this means, but the app implies this equates to ownership only]
   3. Women Owned Business
      1. must provide quarterly payroll reports from inception if business has previously been operating
      2. must upload proof of certification if registered
      3. These individuals must make up no less than 51% of the “individual business principals”
   4. Distressed Farmer
      1. provide small farmer classification
      2. provide IRS Schedule F Form 1040 profit or loss from farming in the past 3 years
   5. Service-Disabled Veteran Owned Business
      1. must provide a certificate or proof of certification
      2. must provide DD214s and/or NG214(s) with a service disability rating of at least 10%
      3. These individuals must make up no less than 51% of the “individual business principals”

Foley Hoag will be following these developments closely.