Cannabis leaves

What You Need To Do To Be A Dispensary In NY

The New York Recreational Marijuana Law

Before recently, adult recreational marijuana use was illegal in the state of New York, but medical use was allowed. Unfortunately, due to the complexities of the medical use law, only a few medical marijuana dispensaries were permitted to operate in the state. In fact, only ten companies operated 38 dispensaries in New York as of fall 2020. On March 31, 2021, however, New York State legalized the recreational use and possession of marijuana throughout the state.

As soon as the new regulations are drafted and implemented, you will be able to apply for a license or permit to open a dispensary for off-premises (dispensary) and on-premises sales (a cannabis bar or restaurant). The details of how the relations will be developed is still unclear as the agency the law created to oversee and regulate the cannabis industry has yet to be put in place.  It is clear, however, that the new cannabis law establishes a strict regulatory system for the cannabis industry that is designed to both effectively control the industry and efficiently collect taxes related to growing, processing and selling cannabis products. 

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The Path to Recreational Cannabis Legalization in New York

Like many other progressive areas in the United States, New York has a long and constantly changing relationship with marijuana. It began restricting the use of marijuana for medical use in 1914 and in 1927 it was prohibited completely. In 1977, New York decriminalized the possession of 25g or less of marijuana, meaning that possession results in only a fine. 

Many other advancements toward legalization took place in the early 1990’s as well. In 1992, Dennis Peron founded the first legal American dispensary, the San Francisco Buyer’s Club, alongside co-founders Brownie Mary Rathbun and Dale Gieringer. The trio were activists who proposed the legalization of cannabis for medical treatment. Research carried out by Brownie Mary Rathbun showed its effectiveness in treating HIV/AIDS, cancer, and other terminal illnesses. 

While California was taking steps toward legalization, New York began taking steps back. Although the decriminalization of marijuana in New York immediately reduced the number of arrests in the city by about fifty-six percent, this slowly started to increase over time. This is because use of marijuana in public remained a crime. Between 1997 and 2010, approximately 525,000 people were arrested for possession of small amounts of cannabis. Recognizing this problem, the Mayor of New York City, Bill de Blasio, directed the New York Police Department to stop arresting people for marijuana possession, and to issue tickets instead in 2014. 

Today, New York marijuana activists are declaring victory.  On March 30, 2021, New York State Legislators approved the complete legalization of recreational marijuana. On March 31, 2021, Governor Cuomo signed the bill legalizing the use of marijuana in New York City and throughout the state. Additionally, all cases of cannabis-related convictions will be expunged, except those relating to sales to minors or involving violence. 

Another important advancement under the new law is that employers cannot make employment decisions based solely on an applicant’s marijuana use or a failed marijuana drug test. Despite this, there have already been reports of employers requesting their employees to undergo drug testing for marijuana and tetrahydrocannabinol (THC). This is perhaps because the law is relatively new and employers may not be up to date on its requirements. 

A cannabis farm
Credit: Richard T | The CBD (http://www.thecbd.co)

Cannabis Restrictions and Laws in Local Areas

While cannabis can now be used by adults in New York, this is a complex law that contains many restrictions. The most important restriction is that adults may only possess up to three ounces of cannabis or 24 grams of concentrated oil. Any more than that, and the individual may be subject to criminal penalties. In the future, individuals may be able to have up to five pounds of marijuana in their homes.

There are numerous restrictions on marijuana use as well. For example, marijuana cannot be used in certain areas, such as in a school, public housing, public parks, outdoor dining areas, or any area where smoking cigarettes is prohibited by law. This means that marijuana may be used in certain areas depending on which locality you are in and whether or not smoking is allowed there. Notably, marijuana cannot be smoked in a vehicle, even when it is not being driven. 

Additionally, not all local governments will participate in licensing dispensaries and may “opt-out” of the law. While marijuana use and possession will still be legal in those areas, “opting out” means that local governments may ban dispensaries in their jurisdictions or severely limit their presence. Most other states with recreational marijuana have opt-out provisions and we generally see that more rural, wealthy, and conervative areas are likely to opt-out. 

The Different Types Of Cannabis Business Licenses

Like most states, starting a marijuana business in New York City is extremely complex and cannot be done with the help of an experienced marijuana attorney. New York City issues only one type of marijuana dispensary license for medical use, the vertically integrated growers or dispensary license. With the NY dispensary license, you can grow, process, package, label, and sell marijuana to patients at any retail store. 

The new recreational Act, however, takes a different approach than the medical marijuana act. It expressly prohibits vertical integration for recreational licenses and will likely have nine new licenses. These include Cultivator, Retail Dispensary, Delivery, Nursery, Micro Business, Laboratory, Processing, Small business adult-use cooperative license, and Adult-use on-site consumption license. The law itself does not create the regulatory scheme for recreational sales of marijuana, but merely authorizes the regulations to be made. This means that the exact regulations for recreational sales will be created within the following months or years. 

Employment Opportunities in Medical and Recreational Marijuana Programs

Medical Marijuana programs currently provide individuals with employment opportunities in the cannabis industry. As recreational marijuana becomes a budding industry, more career opportunities will sprout up. Jobs you can get in the cannabis industry include Medical Marijuana program Administrator, budtender, Agriculture technician, customer care representative, temporary dispensary associate, packaging technician, dispensary agent, wellness associate, greenhouse technician, meter reader, flower packer and inventory manager, and delivery driver. 

Anyone seeking employment in the medical or recreational marijuana field must do their due diligence to ensure that their employer is fully licensed and operating within the laws of New York. Failure to ensure that the marijuana operation is legal may result in serious criminal consequences. If you are contemplating employment in the marijuana field, contact a qualified marijuana attorney today.

Application Fees and Course Registration

Because the recreational law is so new, there is very little information on how to become licensed. There is no information on fees, required courses, or other requirements. Looking to the laws of other states, the licensing process is generally quite complex and will likely involve a complete background check. Those who are licensed will likely have to take classes or somehow prove that they have the knowledge and expertise to safely provide marjuiana products to the public. It will take quite some time for the state to finalize these regulations, perhaps a year or more. 

Who Is In Charge Of Cannabis Regulation In New York? 

The regulation of the cannabis industry is the responsibility of the Office of Marijuana Management. This March 2021 law merely created the OCM and directed it to develop the intricate regulations for recreational use. The OCM will likely borrow existing regulations from other states that have passed recreational use, such as Colorado and Michigan. The function of OCM is to manage the recreational market and oversee the already existing medical cannabis industry. As of now, it is unclear who will be on the OCM team. Appointing and hiring personnel will likely be the first steps toward the path to recreational use.

The Social Justice Equity Board

The recreational law also established a twelve-member equity board created to benefit those who live in areas adversely affected by the criminalization of cannabis. The twelve members of the board will come from a variety of areas such as the state legislature and local community organizations. The purpose of the board will be to ensure that eligible individuals are included in the recreational marijuana industry, either as business owners or employees. The idea is that the economic development and growth from the new law should help grow and assist the areas that have been devastated by previous anti-marijuana policies. 

Individuals who are eligible to partake in the social equity program must:

  1. Be a resident of the state for the last 12 months.
  2. Have an income of eighty percent or less of the state median income.
  3. Not have been convicted of certain marijuana crimes or had a family member convicted of those crimes.

4. Present a community action plan to help hire those from a Disproportionately Impacted Area (DIA). There are strict requirements for what qualifies as a DIA that will depend on the economics of the area, such as unemployment rates and average income. 

Get Expert Advice from a Marijuana Attorney

While opening a marijuana business can be a difficult task, it is much easier with the assistance of an experienced marijuana attorney. While the exact regulations are still being decided, the attorneys at Moshes Law are constantly monitoring new advancements and taking part in the community-wide discussions. We recognize that New York will soon experience a marijuana boom and want to ensure that our clients have the help they need to hit the ground running. If you are contemplating starting a recreational marijuana business or otherwise being involved in the industry, contact the Moshes Law Firm for a free consultation today.


About the Author

Yuriy Moshes is the founder and managing partner of Moshes Law. While he began his career as a litigator, Yuri’s clients continually returned to him with business and corporate law issues. Over the years, he and his team of experienced attorneys have been helping small business owners in all five boroughs of New York create and expand their businesses. Whether it is a simple contract negotiation or a complex real estate transaction, Yuri Moshes and the Moshes Law Firm have the expertise and knowledge to help you succeed.

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