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Cannabis And The LawFoley Hoag LLP Cannabis Control Board Approves First Adult-Use Processor Licenses –

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The New York State Cannabis Control Board (“CCB”)
approved 15 Adult-Use Conditional Processor (“AUCP”)
licenses during its public meeting today, adding a key link in the
state’s budding adult-use cannabis supply chain. Pursuant to
the legislation signed by Governor Hochul in February, which we
wrote about here, processors who hold a Cannabinoid Hemp
Processor license from the Office of Cannabis Management
(“OCM”) qualify to apply for the adult-use conditional
processor license. To be eligible to apply for a conditional
adult-use processor license, a processor must:

  • Have applied for a cannabinoid hemp processor license before
    January 1, 2022;

  • Hold an active cannabinoid hemp processor license issued by the
    OCM; and

  • Have an ownership interest of 51 percent or more of the entity
    that is the licensee.

The Adult-Use Conditional Processor license authorizes the
license holder to process and distribute their own cannabis
products (over 0.3% THC), using cannabis flower grown by New York
farmers, for a period of two years or until they transition to a
non-conditional processor license. Processors are required to
participate in a mentorship program for social equity applicants
and an environmental sustainability program. The application window
opened on June 28, 2022 and closes on August 31, 2022. Applications
are being reviewed and approved on a rolling basis.

The CCB also approved 19 more adult-use cannabis conditional
cultivator licenses, growing the total number of approved licenses
to 242 from a pool of more than 300 applications. The application
window for the adult-use cannabis conditional cultivator licenses
closed on June 30, 2022.

In addition, the CCB approved emergency lab testing regulations
to expedite the expansion of laboratory testing facilities and
sampling firms to ensure all cannabis grown by conditionally
licensed cultivators has been tested before conditionally licensed
retailers sell it in dispensaries. Under the emergency regulations,
labs must be ISO 17025 accredited and use third-party sampling
firms to select samples that will be tested. The emergency rules
are largely identical to those the CCB proposed on June 1, but
these rules go into effect immediately and must be re-approved
every 90 days. There is no public comment period for the emergency
rules. According to OCM Director of Health and Safety Nicole
Quackenbush, the OCM will assess the comments submitted during the
public comment period for the regulations proposed on June 1 and
determine whether revisions are needed.

The Board also voted to hire John Kagia, the now former Chief
Knowledge Officer of New Frontier Data, as the director of public
policy for the OCM.

We will continue to closely monitor developments in connection
with the rollout of New York’s adult-use cannabis program. If
you have questions regarding the contact of this alert or New York
cannabis laws and regulations generally, please contact me at
[email protected], or another member of the Foley Hoag’s
cannabis team.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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