New York Cannabis Microbusiness License Guide

Just like how a tiny seedling can sprout into a tall and lush plant, a small cannabis business can grow into a thriving, well-known brand. You just have to take the first step: break into the industry.

If you're in New York, you'll have the opportunity to enter the cannabis market through the front door with a microbusiness license.

With a New York cannabis microbusiness license, you can participate in various aspects of the cannabis supply chain, from cultivation to retail sales, but on a smaller, more manageable scale.

Are you ready to kickstart your journey through this state's greenest industry? Our guide will walk you through the steps to get your NY cannabis microbusiness license!

Understanding the NY Cannabis Microbusiness License

Before we delve into the legal side of licensing, we have to answer an important question: what is a cannabis microbusiness?

Let's break down the term. "Micro" means small, and "business" refers to an organization or entity that operates in a specific industry. So, a cannabis microbusiness is a small-scale company that is licensed to engage in cannabis-related activities.

New York offers a cannabis microbusiness license to businesses that meet certain requirements regarding the size of their canopy or the amount of cannabis they produce or sell.

Additionally, the NY cannabis microbusiness license offers a unique benefit: the ability to engage in a full range of cannabis operations. Simply put, licensees can perform multiple cannabis-related activities, from cultivation and processing to distribution and sale.

Authorized Activities and Restrictions

While this will depend on the authorization you request during the application process, a NY cannabis microbusiness license may allow you to engage in the following activities:

• Cultivation: You're authorized to grow cannabis with this license, but your canopy size is limited to 3,500 ft2 for indoors, 5,000 ft2 for mixed light settings, and 10,000 ft2 for outdoors. If you decide to combine mixed light with outdoors, it'll be limited to 2,500 ft2 and 5,000 ft2, respectively.
• Processing: With this license, you're authorized to operate a facility to process cannabis into different products. If you grow all your own biomass, there's no processing limit. However, you're allowed to purchase up to 500 lbs of cannabis biomass per calendar year from another licensee, such as a cultivator, microbusiness, cooperative or collective, Registered Organization with Dispensing (ROD), and Registered Organization with No Dispensing (ROND). In that case, you can only process up to 1,700 lbs of biomass per year.
• Distribution: You're also permitted to distribute the cannabis products you've produced to retail dispensaries or on-site consumption premises.
• Sales and delivery: This license allows you to sell cannabis to licensed processors and your self-produced goods to distributors. You can also sell and deliver cannabis products directly to consumers from the microbusiness retail premises.
• Event organization: With this license, you're authorized to organize and host cannabis events.

The NY cannabis microbusiness license comes with some restrictions regarding ownership, such as:

• License holders must engage in cannabis cultivation and at least one more authorized activity.
• Only passive investors may have an interest in more than one license type that authorizes cultivation, including the microbusiness one.
• Microbusinesses and their true parties of interest (TPIs) cannot have any interest in other licenses, including retail dispensaries, delivery services, or on-site consumption licenses.
• Microbusinesses and distributors cannot share any TPI, except for passive investors.
• No individual or entity may apply for more cannabis licenses than they're legally permitted to hold.

Benefits

If you operate under the NY cannabis microbusiness license, you'll enjoy the following benefits:

• Lower start-up costs: Since microbusinesses require smaller investments than larger operations, you can enter the cannabis industry even with limited capital.
• Social equity advantage: New York places a strong emphasis on Social and Economic Equity (SEE) when it comes to cannabis licensing, which offers fair business opportunities to applicants in disadvantaged communities.
• Lower barrier to entry: Besides having lower start-up costs, microbusiness licenses come with fewer stringent restrictions and are designed to promote equity in the industry, making them more accessible.
• Focus on craft production: Since microbusiness licenses are designed for smaller-scale, craft production, you can have greater control over your operations and prioritize quality over quantity.

Eligibility Requirements

To successfully apply for a NY cannabis microbusiness license, you must meet the following eligibility criteria:

• Be at least 21 years old.
• Be a New York resident.
• Have a clean criminal record.
• Not be prohibited from holding a cannabis license under cannabis law or regulations, TPI restrictions, or non-cannabis convictions stated in Section 137 of New York State regulations.
• Engage in at least two cannabis-related activities, including cultivation.
• Have a Federal Employer Identification Number (FEIN).
• Have proof of control over the property where the microbusiness will operate.*
• Be a formally established business entity.
• Meet location requirements regarding proximity between cultivation and retail facilities.

*If you don't have proof of control over the property, you can apply for a provisional license, which gives you 12 months to submit the required documentation and complete the process.

For more information on eligibility criteria, refer to the Office of Cannabis Management (OCM)'s application guidelines.

Step-by-Step Application Process

Are you ready to apply for a NY cannabis microbusiness license? Here are the steps you need to complete:

1. Gather the required documentation to prove your eligibility
2. Go to OCM's website to find the link to the online application within the New York Business Express (NYBE)
3. Create a NYBE Business Profile using a NY.Gov login or use the existing profile if you already have one
4. Complete the application form, adding the requested information about your business, location, and SEE qualifications
5. Submit your application and pay the associated fees

Cost of a NY Cannabis Microbusiness License

If you want to apply for an adult-use microbusiness license in NY, you'll be required to pay a $1,000 fee for your application and a $4,500 fee after approval and for renewal.

SEE applicants can get a 50% discount on all application and license fees.

Regulations and Compliance

Like other licenses, microbusinesses must comply with certain regulations designed to oversee the cannabis industry, including the following:

• Obtain a specific license for the activity they engage in.
• Adhere to strict regulations on cannabis packaging and labeling, which dictate how businesses can display information about ingredients, potency, dosage, and potential risks or elements that labels may or may not have to appeal to the right audience.
• Enforce the strictest safety standards to ensure all materials are handled properly, especially hazardous substances used in extraction (butane, propane, and other volatile solvents), to avoid posing risks to others.
• Implement strict security measures to protect cannabis or derived products and prevent theft or diversion.
• Respect restrictions on advertising and marketing cannabis products, especially those that may appeal to minors
• Limit the size of the canopy or cultivation operations and the amount of cannabis produced as required for each license type.
• Comply with local zoning requirements for cannabis businesses, especially those on the mandatory distance between cultivation spaces and retail premises, whether located in or outside of New York City.
• Design and implement an odor mitigation plan to ensure cannabis operations don't negatively impact surrounding communities.
• Use the state-mandated track-and-trace system to monitor cannabis from seed to sale and maintain accurate, detailed, up-to-date records of all operations.
• Ensure cannabis products are properly tested for quality and compliance to protect public health and safety.
• Hire employees and source from disadvantaged communities to meet SEE standards.

Compliance is key in the NY cannabis industry. If you apply for and obtain a microbusiness license, you must adhere to all regulations and meet the strictest standards to avoid compliance issues that can result in fines, license revocation, and other potential penalties.

Resources and Support

The success of your application for a NY cannabis microbusiness license will depend on how educated you are about the state's requirements, regulations, and standards.

To find valuable information and learn more, check out the following sources:

• Adult-use Microbusiness License Overview
• Frequently Asked Questions about the General Licensing Application (although made in 2023, it contains helpful answers to the most common questions about the application process)
• Adult-Use Application and Licensing Fee Schedules
• Marihuana Regulation and Taxation Act (MRTA) and other cannabis regulations
• New York State's True Party of Interest (TPI) Guidance
• Adult-use Social & Economic Equity Applicant Overview
• Frequently Asked Questions about Conditional Licensee Transition
• Distru's NY Microbusiness Guide
• New York City's Cannabis Microbusiness Guide
• The NYC Department of Buildings' Adult-Use Retail Dispensary Guide (contains valuable information about zoning requirements)

If you have additional questions or need more information about the application or licensing process, you can email info@ocm.ny.gov. A cannabis business attorney can also help you understand the legal implications and provide valuable advice at every stage.

Final Thoughts

The New York cannabis microbusiness license allows you to enter the state's competitive market in an easier way and promotes fairness, equity, and inclusivity in this industry.

To qualify for this license, you have to complete several steps, ranging from collecting documentation to paying the required fees, but the most important thing is to educate yourself about cannabis-related regulations, application requirements, and other key aspects that can help you successfully go through this process.