1st Marijuana Sale Licenses Go To Past Cannabis Offenders: Hochul

LONG ISLAND, NY — Individuals with prior cannabis-related offenses have been tapped to make the first adult-use cannabis sales with products grown by New York farmers, Gov. Kathy Hochul said Thursday.

Hochul unveiled the first-in-the-nation "Seeding Opportunity Initiative", a farm-to-store plan that she said will make sales in New York possible before the end of 2022, jumpstart New York's cannabis industry, guarantee support for future equity applicants, and secure 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," Hochul said.

The regulations advanced by the cannabis control board will prioritize local farmers and entrepreneurs, creating jobs and opportunity for "communities that have been left out and left behind," she said. "I'm proud New York will be a national model for the safe, equitable and inclusive industry we are now building."

At a meeting Thursday, the cannabis control board advanced two components of the Seeding Opportunity Initiative.

First, it put forth for public comment regulations for conditional adult-use retail dispensaries. As part of the Seeding Opportunity Initiative, that 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, Hochul said.

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, she said.

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 Hochul signed last month. The board designated March 15 as the opening date for the application portal.

The Seeding Opportunity Initiative is composed of three programs, Hochul said.

The Equity Owners Lead Program, she said, 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," Hochul said.

Applications for thee priority licenses will open this summer. The first licenses are expected to be distributed by late summer or early fall.

Under the proposed regulations, to be eligible for the initial license, applicants must have a cannabis-related offense that occurred prior to the passage of the Marijuana Regulation and Tax Act 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. Also, to be eligible, a person must have experience owning and operating a qualifying business in the State of New York, Hochul said.

The 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, Hochul said.

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, Hochul said.

Finally, the New York Social Equity Cannabis Investment Program, a $200 million program pitched by Hochul in her 2023 executive budget, is 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, Hochul said.

The proposal remains under discussion with the legislature.