Governor Hochul Announces the Office of Cannabis Management Seeding Opportunity Initiative

For Immediate Release: 3/10/2022

GOVERNOR KATHY HOCHUL



GOVERNOR HOCHUL ANNOUNCES THE OFFICE OF CANNABIS MANAGEMENT SEEDING OPPORTUNITY INITIATIVE

First-In-the-Nation Initiative Positions New York Farmers and Individuals with Prior Cannabis-Related Offenses to Comprise Early Adult-Use Cannabis Supply Chain

Initiative Furthered by Cannabis Control Board's Advancing to Public Comment Regulations for the Initiative's Adult-Use Dispensaries

Initiative Advanced by the Board's Approval of the Conditional License Applications for Hemp Farmers to Grow Adult-Use Cannabis in Spring 2022, Application Portal Set to Open March 15

Governor Kathy Hochul today announced the first-in-the-nation Seeding Opportunity Initiative, which will position individuals with prior cannabis-related criminal offenses to make the first adult-use cannabis sales with products grown by New York farmers. This farm-to-store initiative makes sales in New York possible before the end of 2022, jumpstarts New York's Cannabis Industry, guarantees support for future equity applicants, and secures an early investment into communities most impacted by the disproportionate enforcement of cannabis prohibition.

"New York State is making history, launching a first-of-its-kind approach to the cannabis industry that takes a major step forward in righting the wrongs of the past," Governor Hochul said. "The regulations advanced by the Cannabis Control Board today will prioritize local farmers and entrepreneurs, creating jobs and opportunity for communities that have been left out and left behind. I'm proud New York will be a national model for the safe, equitable and inclusive industry we are now building."

The Cannabis Control Board at its meeting today advanced two components of the Seeding Opportunity Initiative.

First, it advanced to public comment regulations for Conditional Adult-Use Retail Dispensaries. As part of the Seeding Opportunity Initiative, this subset of dispensaries must be owned by equity-entrepreneurs with a prior cannabis-related criminal offense who also have a background owning and operating a small business. They will be the first to open and make sales in New York State, establishing equity-owned businesses at the front-end of New York's adult-use market.

Second, the Board approved a license application for hemp farmers seeking to grow adult-use cannabis this spring - called the Adult-Use Conditional Cultivator License. The license was made possible by legislation Governor Hochul signed last month. The Board designated March 15 as the opening date for the application portal.

Cannabis Control Board Chair Tremaine Wright said, "Our state's Cannabis Law sets a high goal for creating an equitable industry that puts New Yorkers first. The Seeding Opportunity Initiative puts us on a path for achieving that goal and hopefully models a way forward for reaching those goals while building a stable market. I am thankful for the support of Governor Hochul and the Legislature, which made it possible for us to get this initiative off the ground quickly, establish a supply chain from our farmers to equity, retailers, and generate the resources to help revitalize communities that were harmed by the disproportionate enforcement of cannabis prohibition."

Cannabis Control Board Member Jen Metzger said, "The Seeding Opportunity Initiative truly sets New York's program apart from other states that have legalized adult-use, by starting out of the gate with an equity- and sustainability-led program that will supply equity entrepreneur-owned dispensaries with sun-grown cannabis products, It is a great start to building a new industry in which small businesses can thrive and generational wealth can be created."

Adam Perry, Cannabis Control Board Member said, "Shaping the New York cannabis industry and putting social equity entrepreneurs at the forefront is a historic opportunity to address the harm caused by cannabis prohibition and fully implement the goals of New York's Cannabis Law. This is the right start for the industry and I look forward to continuing to work with our team to support all license types to ensure we're not only delivering licenses to social equity entrepreneurs, but also setting them up for success over the long-haul."

Jessica Garcia, Cannabis Control Board Member said, "Positioning justice-involved equity-entrepreneurs as the first to make sales puts New York on the right track to meet the goals of the New York Cannabis Law while providing protections to workers in the industry by creating pathways to union cannabis careers. This is a big, first step forward for the cannabis industry we're building in New York - it's an important one and it's only the beginning."

Reuben McDaniel, III, New York State Cannabis Control Board member and President and CEO of DASNY said, "Our work to create the new cannabis industry in New York is structured to develop successful entrepreneurs in black and brown communities across New York, expand access to capital for those who have been denied, and establish a cannabis industry that leads the nation in health and safety, and in equity, as well. We look forward to continuing our work with the Legislature to develop the funding mechanism that will support New York's equity entrepreneurs in an exciting new sector of our economy."

Office of Cannabis Management (OCM) Executive Director Chris Alexander said, "With the Seeding Opportunity Initiative, we are now on the path to doing what no state has done before: Put our farmers and equity entrepreneurs, not big, out of state businesses, at the forefront of the launch of our adult-use cannabis market. Thanks to the support of Governor Hochul and the action taken by the Board today, we've made a huge advancement in our efforts to prioritize New York's small farmers, our equity entrepreneurs, and ultimately our goal to generate the resources that will support future equity applicants and drive investments into our communities most impacted by cannabis prohibition. We aren't stopping here and work is already underway across all license types to open access to capital and develop supporting networks to build an equitable New York Cannabis Industry and setup our small businesses for long-term success."

Assembly Majority Leader Crystal Peoples-Stokes said, "With this announcement, we are doing what no other state has done by focusing on the people most criminalized by cannabis prohibition, and promoting New York farmers. The cannabis industry is going to grow our economy and create new wealth, and it is imperative that we make sure that opportunities begin with the most deserving New Yorkers. I commend Governor Hochul, the Cannabis Control Board, and the Office of Cannabis Management for taking these steps to implement the Marijuana Regulation and Taxation Act in a manner consistent with the intent of the legislation."

Senator Liz Krueger said, "The initiatives announced by the Governor today will help to ensure that the equity and justice goals of the MRTA will be met, and that New York farmers and small businesses will serve as the foundation of the legal cannabis market. The MRTA was designed not only to end the failed war on drugs in New York, but specifically to take positive action to help rebuild those communities that were most harmed by prohibition. Offering the first retail licenses to people who have been convicted of marijuana-related offenses is a big step in the right direction, and will set the marketplace on a path where social equity applicants can compete successfully."

The Seeding Opportunity Initiative is composed of three programs:

  • Equity Owners Lead Program: Provides a Conditional Adult-Use Retail Dispensary License to eligible equity-entrepreneur applicants, putting them at the front-end of the adult-use market. This first-round, equity-licensing opportunity will be supported with renovated or renovation-ready retail locations and wraparound services with dispensaries sited in high-traffic areas.

Applications for these priority licenses will open in the Summer of 2022. The first licenses are expected to be distributed by late summer or early fall 2022. This positions equity-entrepreneur-owned dispensaries to make the first adult-use cannabis sales in New York State by the end of 2022 while speeding the delivery of investments into communities across the state that were most impacted by the disproportionate enforcement of cannabis prohibition.

The Board today directed the OCM to post for public comment the proposed regulations for the Conditional Adult-Use Retail Dispensary License. Under the proposed regulations, to be eligible for this initial license, applicants must:

  • Have a cannabis-related offense that occurred prior to the passage of the Marijuana Regulation and Tax Act (MRTA) on March 31, 2021 , or had a parent, guardian, child, spouse, or dependent with a pre-MRTA cannabis offense in the State of New York.

  • Have experience owning and operating a qualifying business in the State of New York.

Additionally, the regulations include information for what application materials will be needed to apply for a Conditional Adult-Use Retail Dispensary License and sets the parameters for how the Office will review and evaluate applications. A subsequent regulation package will outline the requirements for safely operating a retail dispensary.

  • Farmers First Program: Provides an Adult-Use Conditional Cultivator License to eligible New York cannabinoid hemp farmers, giving them the first chance to grow cannabis for New York's adult-use market. Farmers must adhere to quality assurance, health, and safety requirements developed by the OCM. They must also take part in sustainability and equity mentorship programs that will help build the first generation of equity cannabis owners across the entire supply chain. These conditional licenses make it possible for farmers to grow cannabis in the 2022 growing season.

The Board today approved the application for the Adult-Use Conditional Cultivator License and set the opening of the application portal for March 15. The license was made possible by legislation recently signed by Governor Hochul on February 22. Further information on eligibility requirements and what's allowed with the license can be found here.

  • The New York Social Equity Cannabis Investment Program: Governor Hochul proposed this $200 million program in her FY 2023 Executive Budget, the nation's first to make funding available for equity entrepreneurs at the forefront of the adult-use cannabis market. Through the program, industry licensing fees and private equity would support the development of dispensary facilities for equity-entrepreneurs with a Conditional Adult-Use Retail Dispensary License. Under the proposal, the Dormitory Authority of the State of New York (DASNY) would provide support with its leasing and construction services to site dispensaries at prime locations and renovate them to meet health, safety, and security requirements. The Social Equity Cannabis Investment Program's funding and accompanying services would reduce barriers to entry and position these equity-entrepreneur owners for long-term success. The proposal remains under discussion with the Legislature.

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Additional news available at www.governor.ny.gov

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