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February 17, 2022

The Sixth New York State Cannabis Control Board Meeting

On Thursday, February 17, 2022, the New York State Cannabis Control Board (CCB) of the Office of Cannabis Management (OCM) held its sixth public meeting. The CCB addressed OCM staffing, the delegation of hiring to the executive director, proposed medical cannabis regulations, more details concerning the proposed social and economic equity fund, and the executive director’s report.

The CCB approved a resolution to make changes to the medical cannabis program regulations under the Marijuana Regulation and Taxation Act (MRTA). These changes included (1) transitioning the program from the Department of Health to the OCM, (2) MRTA conforming changes to bring regulations in line with the MRTA, and (3) programmatic and operational efficiencies. Specifically, some of the changes included creating a new Part 113 of the Code of Rules and Regulations to house the medical program regulations; changing surveillance requirements, which may be an indication of requirements in the adult-use cannabis space; removing the prohibition on naming conventions, another indication for adult-use cannabis; and requirements for minimizing environmental and sustainability concerns.

Board member Reuben McDaniel gave an update on the proposed $200 million social equity fund (the Fund). An interesting aspect of the Fund is the allowance of private investment. This may foreshadow a very strict interpretation of the MRTA’s prohibition on having no direct or indirect interest in multiple licenses (other than those interests expressly provided for in the MRTA). 

The Dormitory Authority of the State of New York (DASNY) will deliver a range of services in relation to the Fund, including but not limited to: (1) identifying and acquiring or leasing retail dispensary locations; (2) designing, constructing, and renovating the locations as adult-use cannabis dispensaries; and (3) outfitting locations with furniture and other equipment, as needed, to operate the establishments, among other activities.

According to McDaniel, DASNY will oversee aspects of the Fund to “make sure that our social equity applicants can be part of the program in a very timely manner.” At this time, it is unknown when the full eligibility criteria and application process for funding will be released.

Though not mentioned by the CCB, the Fund dovetails with the recent legislation that has passed through the legislature that would allow current hemp cultivators and processors to obtain provisional licensing for adult-use cannabis. Together, the legislation and the Fund would ensure that hemp farmers and social equity applicants would be some of the first groups licensed and the supply chain would be intact to ensure product was available to consumers.

Barclay Damon’s Cannabis Team will continue to closely monitor developments pertaining to the MRTA’s rules and regulations. If you have questions about the MRTA, please contact one of Barclay Damon’s cannabis attorneys. 

If you have questions regarding the content of this alert, please contact Jason Klimek, Cannabis Team co-leader, at jklimek@barclaydamon.com, or another member of the firm’s Cannabis Team.

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