New York Cannabis Dispensary Laws

PUBLISHED APRIL 20, 2021 

After years of stalled efforts, New York finally passed the Marijuana Regulation and Taxation Act in March 2021 with impressive social equity provisions. The bill also established the ‘Office of Cannabis Management' to monitor and oversee all cannabis-related matters- both medical and recreational. Once all regulations are laid out, the Office of Cannabis Management will take over the responsibility of the Medical Marijuana Program (MMP) from the New York Department of Health, and the MMP is expected to undergo significant changes as well. To protect consumer safety, there will be laboratory testing, and packaging, and labeling requirements for all cannabis products.

New York became the 16th state in the US to allow adult-use cannabis and with a potential $4.2 billion industry, it is set to become the nation’s second-largest legal marijuana market. The process for setting up regulation and taxation of cannabis sales, and licensing guidelines for growers, producers, distributors, retailers, and delivery is now underway and the state is also making significant efforts to address long-standing issues around race and social equity while writing cannabis laws. Automatic expungement has been included for those convicted of acts that are no longer considered illegal.  The law hasn’t provided a specific timeline yet, but recreational cannabis dispensaries are expected to begin adult-use sales only by 2022. We will update this page as more information becomes available. This page should not be considered legal advice.

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New York Cannabis Laws

An overview of the medical and recreational marijuana laws in New York.

Who can purchase cannabis in New York and what are the limits?

The Marijuana Regulation and Taxation Act (MRTA) has legalized cannabis for adults 21 years of age or older, who can buy and possess up to 3 ounces (85 grams) of cannabis flower and 24 grams of cannabis concentrate (oils, tincture, edibles, vapes, etc.) at a given time. Registered medical patients may hold up to a 60-day supply of approved cannabis products at any time. Patients and designated caregivers must have their medical marijuana registry ID card on hand at all times when possessing medical cannabis.

Are there any qualifying conditions for medical marijuana patients in New York?

Medical marijuana patients must be New York residents or temporarily residing in the state for medical treatment. Patients with the following conditions can qualify:

  • Alzheimer's disease
  • Amyotrophic lateral sclerosis (ALS), or Lou Gehrig's disease
  • Autism
  • Cancer
  • Dystonia
  • Epilepsy
  • HIV/AIDS
  • Huntington's disease
  • Inflammatory bowel disease
  • Multiple sclerosis
  • Muscular dystrophy
  • Neuropathy
  • Parkinson's disease
  • Pain that degrades health and functional capability
  • Post-traumatic stress disorder (PTSD)
  • Rheumatoid arthritis 
  • Spinal cord injury with spasticity
  • Substance-use disorder
  • Any other condition certified by the medical practitioner

The OCM is expected to expand this list and add more qualifying medical conditions.  Please check the New York State Department of Health Medical Marijuana website for more information about the medical marijuana program.

Is home cultivation allowed in New York?

Adult New Yorkers can grow up to six plants in their home for personal use (3 mature plants and 3 immature plants) and a maximum of twelve plants per household (6 mature plants and 6 immature plants), even if there are three or more adults above the age of 21 in the residence.

Please be aware the home cultivation of cannabis plants is not allowed immediately. Pursuant to the MRTA, it may only be permitted after the Office of Cannabis Management issues regulations governing home cultivation of cannabis, which must be no later than 18 months after the first adult-use retail sale.

  • Cannabis plants must be kept in a secure place and not accessible to any person under 21.
  • Home cultivated cannabis cannot be sold to anyone and is only intended for personal use.

Where can cannabis be consumed in New York?

Cannabis can be consumed in a private home or at a state-licensed on-site consumption site. Smoking cannabis is prohibited anywhere smoking tobacco is prohibited. Public consumption of marijuana through smoking or vaping will be handled as a violation of New York’s tobacco control laws.

Since consuming marijuana is still illegal under federal law, you can’t consume it on federal land, including national parks and national forests. Smoking publicly where it’s not permitted will subject people to a civil penalty of $25 or up to 20 hours of community service.

Retail Cannabis Licensing in New York

Everything you need to know about opening a retail cannabis location in New York.

What state agency is in charge of cannabis licensing in New York?

The Office of Cannabis Management (OCM) is in charge of issuing licenses for businesses to participate in the adult-use and medical cannabis industries. The OCM will be issuing and implementing regulations by mid-2021 regarding the application process for different license types.

Who can apply for a cannabis business license?

Residents of New York, aged 21 and above can apply for a marijuana business license, either alone or in partnership with someone. The OCM will actively promote social and economic equity applicants who have been harmed by the prohibition of cannabis, and has established a goal of awarding 50% of licenses to social and economic equity applicants.

What is the process for obtaining an adult-use marijuana retail license in New York?

The OCM is yet to establish the process for obtaining a cannabis business license. Please continue to monitor their website for updates about licensing and more information about the social and economic equity program.

Watch this space in 3-6 months from now for more details on the application process.

Is one entity allowed to apply for more than one license?

A single company won’t be allowed to handle all parts of recreational cannabis — cultivation, processing, distributing, and dispensing — with the exception of micro-businesses. A cultivator or processor will be barred from having any financial interest in a marijuana retail business.

Medical marijuana dispensaries can obtain a license to distribute, cultivate, and process cannabis, but they will only be allowed to distribute their own products, and sell adult-use cannabis at only three of a medical operator’s dispensaries.

New York Cannabis Retail and Dispensary Establishment Laws

Learn how to remain compliant with New York’s cannabis retail laws.

Where can a cannabis dispensary or retail establishment be located?

Brick-and-mortar retail dispensaries, where people can purchase cannabis products, will have to adhere to zoning laws established by local municipalities. Localities can opt out of allowing dispensaries and will have until the end of 2021 to do so.

Consumption at dispensaries will be limited to businesses that have an on-site consumption license, but social cannabis lounges in New York are definitely on the horizon. Entrepreneurs will eventually be able to apply to the state for licenses to open consumption lounges, bakeries, restaurants, yoga studios, hotels, and wellness centers, as long as they don’t sell alcohol on the premises.

Whom can New York cannabis retailers sell to?

Licensed adult-use marijuana retailers may sell cannabis to adults aged 21 and older, with a valid government-issued identification card, and employees are required to check purchasers’ IDs before making the sale.

What products can a New York cannabis retailer sell?

Retail dispensaries may sell cannabis, cannabis resin, cannabis products, and cannabis extracts. THC and CBD limits and information on selling other paraphernalia are yet to be established by the OCM.

Can medical marijuana and recreational cannabis be sold in the same dispensary?

Yes, medical dispensaries can sell recreational cannabis, at a maximum of 3 locations. Whether new entrepreneurs will be able to apply for both licenses is yet to be known.

What taxes are collected on retail cannabis in New York?

The MRTA has established three taxes on adult-use cannabis. There is a tax imposed at the distributor tier based on the milligrams (mg) of total THC in the cannabis product which varies depending on the cannabis product form.

On the retail sale to the consumer, there are two taxes:

  • 9% state excise tax 
  • 4% local excise tax 

These taxes do not apply to medical cannabis.

All cannabis taxes would be deposited in the New York state cannabis revenue fund, a percentage of which would cover costs to administer the program and implement the law. The remaining funding would be split three ways:

  • 40 Percent to Education
  • 40 Percent to Community Grants Reinvestment Fund
  • 20 Percent to Drug Treatment and Public Education Fund

Is delivery for cannabis products allowed?

Yes, delivery of marijuana and products will be allowed but a separate license will be issued to cannabis delivery businesses, and localities cannot block it.

What is required of adult-use cannabis retailers in New York before conducting sales?

Retailer licensees can retail sales of cannabis items on any date after the date that the Office of Cannabis Management adopts its initial rules and regulations and licenses have been awarded. Retailers can legally sell to persons 21 years of age or older, so long as the municipality in which it is located is engaged in retail sales. Prior to and during this transition phase leading up to eventual retail sales of cannabis items, every municipality would have the option to authorize and regulate the times of operation, place, manner, and number of licensed cannabis businesses operating within its jurisdiction, in a manner consistent with the bill's regulation of such businesses.

Cannabis Tracking and Reporting in New York

Every regulated cannabis market has its own tracking and reporting requirements. Find here how New York monitors commercial cannabis activity.

What are the tracking, reporting, and inventory control requirements for New York cannabis retailers?

Most states require dispensaries and cannabis stores to track and trace all of their cannabis products for regulatory and compliance reporting requirements. Records identifying the source of each ingredient must include the date of receipt of the ingredient, vendor’s name and address, name of the ingredient, etc. The vendor’s batch number, lot number of the product, and control number used to identify all components in the marijuana product(s), as well as the grade and quantity, must be mentioned in inventory reports.

What is New York’s official cannabis monitoring system?

New York has not appointed an official cannabis monitoring system yet.

Is Cova compliant with New York’s cannabis retail reporting requirements?

Yes. Cova's Cannabis Dispensary POS Software and inventory management system can be integrated with all tracking and monitoring systems, including Metrc, and has all the features needed to keep cannabis retailers compliant, including:

  • ID scanner for age and card verification
  • Integrated inventory and sales tracking and reporting
  • Built-in product equivalency conversions and purchase limit enforcement.
ron-segev

RON SEGEV

Cannabis Business Lawyer & Founding Partner, Segev LLP

Legally reviewed by

RON SEGEV

Ron Segev is the founding partner of Segev LLP. A practical-minded business lawyer with expertise in the cannabis industry, he represents cultivators, dispensaries, CBD extractors, oil extractors, food processors, media and marketing companies, consultancies, and other businesses in the legal cannabis market.

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