New York Will Allow Hemp Farmers to Start Growing Adult-Use Marijuana

Eager to get its adult-use cannabis industry up and running and keep pace with neighboring New Jersey, New York is giving hemp farmers the green light to grow cannabis for the adult-use cannabis market.

Eager to get its adult-use cannabis industry up and running and keep pace with neighboring New Jersey, New York is giving hemp farmers the green light to grow cannabis for the adult-use cannabis market. Under legislation signed into law by Gov. Kathy Hochul, hemp farmers may apply for a new Conditional Adult-use Cannabis Cultivator license to grow cannabis in the 2022 growing season.

“I am proud to sign this bill, which positions New York’s farmers to be the first to grow cannabis and jumpstart the safe, equitable and inclusive new industry we are building,” Gov. Hochul said in a press statement. “New York State will continue to lead the way in delivering on our commitment to bring economic opportunity and growth to every New Yorker in every corner of our great state.”   

Conditional Adult-use Cannabis Cultivator License

In March 2021, New York State passed the Marijuana Regulation and Taxation Act (MRTA), which legalized the adult use of marijuana. Under the MRTA, the Office of Cannabis Management (OCM) is tasked with establishing the regulatory framework for the legal cannabis industry. To date, licensing regulations have not been finalized.

To help ensure that cannabis products will be available to meet the demand of the adult-use cannabis market when retail dispensaries do open, New York is allowing existing hemp farmers to begin production. With an Adult-use Cannabis Conditional Cultivator License, farmers can grow outdoors or in a greenhouse for up to two years from the issuance of the license. The new law also authorizes them to manufacture and distribute cannabis flower products without holding an adult-use processor or distributor license, until June 1, 2023.

Cultivators are limited to one acre (43,560 square feet) of flowering canopy outdoors or 25,000 square feet in a greenhouse and can use up to 20 artificial lights. They can also split between outdoor and greenhouse grows with a maximum total canopy of 30,000 square feet as long as greenhouse flowering canopy remains under 20,000 square feet.     

Applying for an Adult-use Cannabis Conditional Cultivator License

According to the OCM, it will be developing a license application process and opening the program as soon as possible. To qualify for an Adult-use Cannabis Conditional Cultivator License, an applicant must have been an authorized industrial hemp research partner for the Department of Agriculture and Markets, cultivating hemp for its non-intoxicating cannabinoid content for at least two of the past four years and in good standing as of December 31, 2021, when the research program ended.   

Licensees must also participate in a social equity mentorship program where they provide training in cannabis cultivation and processing for social and economic equity partners. Growers will also have to meet sustainability requirements to ensure the cannabis is grown in an environmentally conscientious way.   

Transitioning to a Full Adult-use Cultivation License

No later than ninety days before the expiration of a conditional adult-use cultivator license, the OCM must, pursuant to a request by the licensee,  review the conditional adult-use cultivator licensee to determine whether they are in good standing. Any licensee found to be in good standing will be eligible to apply for and receive an adult-use cultivation license, provided the licensee can meet all requirements of the new license. Licensees will receive, at minimum, an adult-use cultivator license for the size of flowering canopy that they were licensed to grow pursuant to their conditional adult-use cultivator license or a larger size flowering canopy and authorization to use artificial light as may be set out by the board in regulation. A licensee may not separately apply for any license type permitting the cultivation of adult-use cannabis while holding a conditional adult-use cultivator license.

Key Takeaway

Both New Jersey and New York are working to get their cannabis industries off the ground and legal developments are expected to pick up speed in the coming weeks. For businesses looking to enter either market, it is important to be prepared, and we encourage you to contact a member of the Scarinci Hollenbeck Cannabis Law Practice Group. 

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.

This article is a part of a series pertaining to cannabis legalization in New Jersey and the United States at large. Prior articles in this series are below:

• Gifting Cannabis Lands New York Retailers in Hot Water
• Can SAFE Banking Act Finally Cross the Finish Line?
• Year in Review: Top Cannabis Legal Developments for 2021
• Can Latest Cannabis Legalization Bill Bridge the Partisan Divide?

Disclaimer: Possession, use, distribution, and/or sale of cannabis is a Federal crime and is subject to related Federal policy. Legal advice provided by Scarinci Hollenbeck, LLC is designed to counsel clients regarding the validity, scope, meaning, and application of existing and/or proposed cannabis law. Scarinci Hollenbeck, LLC will not provide assistance in circumventing Federal or state cannabis law or policy, and advice provided by our office should not be construed as such.