How to Apply for a CAURD License in New York

Do you remember the War on Drugs? Yeah, not a fun time. 

In New York, social equity programs like the Conditional Adult-Use Retail Dispensary (CAURD) license are trying to create opportunities for those impacted by the war on drugs. But this isn't just about selling cannabis (although that's definitely part of it!). This licensing option is an important component of the state's Social and Economic Equity (SEE) program, which aims to rectify these historical injustices by prioritizing individuals and communities impacted by the disproportionate enforcement of cannabis prohibition.

Designed to right the wrongs of the past, the CAURD license is a first step in New York's efforts to create a fair, equitable cannabis industry and allowed the first adult-use retail dispensaries to open their doors in this state.

Do you think you apply for this opportunity? This guide will break down the CAURD license application process step by step, so you can easily understand the requirements to secure a spot in New York's cannabis market. Let's get started

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What Is a CAURD License?

A CAURD license is a permit to operate a retail cannabis dispensary in New York. Issued by the Office of Cannabis Management (OCM), it allows holders to sell cannabis products for recreational or "adult-use" purposes directly to consumers.

As mentioned above, the CAURD program was launched to kickstart adult-use cannabis sales in New York, but licenses were granted to justice-involved individuals, who are those who have been directly or indirectly affected by marijuana-related offenses in this state before March 31st, 2021.

According to the OCM, a justice-involved individual is someone who:

• Was convicted of a marijuana-related offense in New York before the date listed above.
• Has a parent, spouse, child, legal guardian, or dependent who has been convicted of a marijuana-related offense in New York before the date listed above.
• Was a dependent of someone who was convicted of a marijuana-related offense in New York before the date listed above.

Additionally, a marijuana-related offense is described by Section 137 of the Cannabis Law as:

• Any offense involving marijuana under Article 221 of the New York State Penal Law before it was repealed on March 31st, 2021
• Any offense under Article 220 or Section 240.36 of the New York State Penal Law involving marijuana before the creation of Article 221 in 1977
• Any offense under Section 3382 of the New York State Public Health Law before it was repealed on March 31st, 2021
• Any offense under Article 105 of the New York State Penal Law involving marijuana-related conduct
• An arrest for a marijuana-related offense, even if it led to a conviction for a different, non-drug-related or lesser charge due to a plea deal or other legal procedure.

New York's legalization program seeks to address the social and economic injustices caused by past cannabis prohibition. CAURD licenses are an important part of this initiative. Applicants from affected groups or communities are prioritized, giving them an opportunity to participate in the legal cannabis industry and promoting economic growth in underserved areas.

CAURD License Requirements

While every business of any structure can apply, the OCM has set strict requirements for granting CAURD licenses. Below is more information.

CAURD License Eligibility Criteria

If you want to get a CAURD license in New York, you can apply under two options: the qualifying business criteria or the qualifying nonprofit criteria.

To be eligible under the qualifying business criteria, at least 30% of your business must be owned by someone who:

• Is at least 21 years old.
• Is considered justice-involved.
• Has qualifying business experience (having at least 10% ownership for at least 2 years in a business with positive net profits).
• Has sole control of the business.
• Has a significant presence in New York State (the person with sole control or at least 30% ownership over the dispensary must live in New York or have assets, real property, a bank account, or any other connection to this state).

To be eligible under the qualifying nonprofit criteria, at least 30% of your business must be owned by a qualifying nonprofit organization that:

• Is operated by people aged 21 or older.
• Is operated by US citizens or permanent residents. This requirement is mandatory for all members of a partnership and for all principal officers and more than half of the directors if it's a corporation.
• Employs at least five full-time employees.
• Has at least one board member, officer, governing committee member, or advising committee member who is justice-involved.
• Has a record of creating vocational opportunities for people who have been incarcerated, including justice-involved individuals.
• Has a history of serving persons who are currently or have been incarcerated, including justice-involved individuals.
• Has operated a social enterprise that has been profitable or held net assets for at least two years, defined as a nonprofit-run or fiscally sponsored business serving customers and generating revenue while fulfilling the parent organization's mission.
• Meet the qualifying nonprofit ownership threshold criteria.

Scoring Process

The scoring process is also divided into two categories as follows:

If eligible under the qualifying business criteria, the OCM will score your application based on the fact that you're a justice-involved individual and other specific factors, such as your sole control or ownership of the business.

The following factors are heavily weighted during this process:

• Whether the marijuana-related conviction directly affected you as a justice-involved owner, a close family member, or a dependent.
• If the arrest occurred in a disadvantaged community with a history of over-policing and mass incarceration or a record of low median household income.
• Whether your business closely resembles a cannabis dispensary, with features like retail sales, inventory management, a physical location, and paid employees.
• If you have qualifying business experience based on how long you have been operating a business, the business's size, and net revenue, and the business's history of compliance with state and local regulations.

If eligible under the qualifying nonprofit criteria, the OCM will score the application based on the nonprofit's sole control of the business's social enterprise experience and commitment to working with justice-involved individuals.

These are the most important factors during this process:

• The nonprofit's verifiable history of working with justice-involved individuals, based on the duration of this work, the location of the social enterprise, the involvement of justice-involved individuals on the board, and the proportion of program expenses dedicated to this population.
• The nonprofit's governance practices, if proven strong by audited financials and a balanced ratio of overhead to program costs.
• The similarity of the social enterprise to a retail cannabis dispensary and whether it has retail sales, inventory management, a physical location, and paid employees.
• The strength of the nonprofit's social enterprise experience, based on how long the organization has been operating the business and the business's size.

Disqualification Factors

Some applicants may be ineligible for CAURD licenses, including the following:

• People with a history of felonies or other offenses specified in Section 137 of the Cannabis Law.
• Businesses with owners who have had cannabis licenses revoked or suspended in other states.
• Organizations with suspended or revoked nonprofit status.
• Applicants who aren't able to provide the necessary documentation to meet the minimum eligibility criteria.
• Individuals who are under 21 years old or cannot have an interest in a CAURD licensee.
• Applicants who aren't eligible by any other reason determined by the Cannabis Control Board.

CAURD License Application Process

Do you want to leverage this opportunity to step into New York's cannabis industry? Find everything you need to know about the CAURD license application process below.

Step-by-Step Guide

Here are the steps you need to complete:

1. Understand all the requirements and prepare the required documentation, which may include information about true parties of interest (TPIs), tax documents, proof of presence in New York State, and records of convictions. Find more information about the required documentation for your license application in the OCM's CAURD FAQ Section.
2. Go to the New York State Business Express (NYBE) page and create a profile. If you already have one, just log in.
3. Enter the required details, such as an address and the North American Industry Classification System (NAICS) code. Remember that you can complete your application over multiple sessions if you save your progress.
4. Pay the non-refundable $2,000 application and licensing fee via check, which must be postmarked and mailed to the OCM via USPS.
5. Check to see if you received the confirmation email with your application number, which should be printed, included with the payment receipt, and sent to the OCM.
6. Make a note of your application number for information during the review and scoring phase.

Keep in mind that business owners and all TPIs may be required to provide fingerprints in the later stages of the CAURD license application process. This must be submitted upon request by the OCM.

For more information, check the OCM's CAURD Application FAQ Section.

Timeline and Important Dates

A specific CAURD license timeline hasn't been established yet. The OCM isn't currently accepting applications for these licenses, as the program has experienced some challenges, including lawsuits, that have caused delays and affected its rollout.

When live, the online application will appear within the NYBE portal. If you want more information about potential rounds and deadlines, check the OCM's website regularly and keep up to date with the latest industry news.

Current Landscape of CAURD License Holders

Many cannabis businesses have already benefited from the CAURD license program. Let's go over the latest reports issued by the OCM.

Current Holders

The first CAURD license list in New York had only 36 provisional licenses approved, including 28 qualifying individuals and 8 nonprofit organizations. However, more applications have been approved since 2022.

According to the latest Marijuana Regulation and Taxation Act Implementation Report, the OCM has issued 205 CAURD licenses as of September 15th, 2024. Of the 904 applications submitted in total, 327 were denied, another 292 were provisionally approved, and 80 are pending.

The report also says that 150 CAURD licenses have opened for business as of September 15th, 2024.

Selection Criteria

These licenses are distributed among different areas, known as CAURD license regions. Applicants can choose up to five regional preferences within New York to locate their dispensaries. These are:

• Bronx
• Brooklyn
• Capital Region
• Central NY
• Finger Lakes
• Long Island
• Manhattan
• Mid-Hudson
• Mohawk Valley
• North Country
• Queens
• Richmond
• Southern Tier
• Western NY

All applicants in each region are ranked based on the scoring criteria mentioned above. The top-scoring applicants who prioritize a specific region as their first choice are selected for provisional licenses in that region, up to the maximum number of licenses allocated or available.

After that, the OCM assigns a location for each provisional licensee. The New York Social Equity Cannabis Investment Fund (Fund) provides location leases.

If there are still licenses available in a region after the first round of assignments, the top-scoring applicants who chose that region as their second, third, fourth, or fifth choice are considered if they haven't been selected for a provisional license in their first choice. Regional preferences are always considered in order.

When their top-choice regions are full, applicants may be placed on a waitlist for that region. Once an applicant is placed on a waitlist or assigned a license, they cannot be moved to a lower-ranked region, even if that region has available licenses.

The goal is to assign applicants to their highest-ranked preference, even if it means waiting for a license to become available

If two or more applicants have the same score, and there aren't enough licenses available, a random selection process is held to determine who gets a license. The order in which applicants are drawn decides who receives a provisional license.

Once a provisional license is granted, the licensee is contacted by the OCM and asked to choose a specific location for their dispensary from a list of available options within their region. The chosen option must be approved by the Board.

After that, the licensee has one year to complete the following steps:

• Notify the local municipality of their intent to open a dispensary and begin cannabis operations.
• Submit fingerprints for themselves and all TPIs to the OCM.
• Provide a cannabis business plan, audited or certified financial statements, and proof of insurance.

If the licensee doesn't complete these steps within a year, which must be done through the OCM's online application system, their provisional license may fail to obtain approval. In this case, the license may be offered to another applicant.

Upon successful completion of all requirements, CAURD license winners receive final approval to operate their cannabis dispensary.

Selection of Qualifying Nonprofit Organizations

The Board determines how many licenses are granted to applicants under the qualifying nonprofit criteria based on the number and quality of applications received.

Since the number of nonprofit licensees is usually limited, applicants are selected from two regions: New York City and the rest of the state. Applicants are scored and selected separately to ensure the process is fair.

Nonprofit provisional licenses will be awarded to the highest-scoring nonprofit applications.

For more information about this process, check the OCM's CAURD Scoring and Selection guide.

CAURD License Renewal and Benefits

To learn more about CAURD licenses, here's further information about their renewal process and the benefits this program offers to cannabis entrepreneurs!

CAURD License Renewal Process

CAURD licenses must be renewed two years after they're granted. After the four-year conditional period, licensees in good standing may have the chance to transition to adult-use retail dispensary licenses.

The OCM will likely provide instructions and specific deadlines for this process. That's why it's important to check the official website regularly.

CAURD License Benefits

Here are the numerous benefits that New York's CAURD license offers its holders:

• SEE advantage: Since CAURD licenses are part of New York's SEE program, you have the chance to enter this competitive industry even if you have been affected by cannabis prohibition in the past or live in a community historically impacted by the War on Drugs.
• Legal operation: With a CAURD license, you can legally open an adult-use cannabis dispensary within New York, which provides you with the opportunity to operate in a stable business environment.
• Market access: A CAURD license grants you access to New York's growing and potentially rewarding market, which can help you attract more customers and increase your revenue.
• Potential business growth: Besides giving you access to the growing cannabis market, the CAURD license allows you to set up your business, create new products, and explore new market segments with the potential to expand your operations and even transition to an adult-use retail dispensary in the future.

Distru: BioTrack Integration for CAURD License in NY

CAURD license winners have a lot of work to do once their applications are approved. If you've already gotten the permit to operate an adult-use cannabis dispensary in New York, you have to meet certain standards and regulations to ensure compliance.

For instance, New York uses BioTrack as the official seed-to-sale system. As of January 17th, 2025, all cannabis businesses operating in this state must use inventory software that integrates with this platform.

Do you want to ensure your business meets this important requirement? Distru seamlessly integrates with BioTrack, simplifying data entry, reporting, and compliance in this highly regulated industry!

With Distru, CAURD license holders can run their businesses efficiently while adhering to strict state regulations. Our cannabis ERP software allows you to monitor inventory, production, and sales from cultivation to retail.

Additionally, our solution features a user-friendly interface that streamlines operations and enhances efficiency. You can track your cannabis inventory in real-time, ensure your products have accurate labels, automate workflows, and gain insights into your business performance to streamline your operations, minimize errors, save time, and identify valuable opportunities in the competitive marketplace.

Distru makes compliance much easier. Schedule a demo to explore our ERP software's features and capabilities!

Final Thoughts

Although the program has experienced some challenges and delays in the past, the CAURD license can be an excellent opportunity for those looking to enter New York's growing cannabis market, especially for people from groups and communities that have been unfairly affected by cannabis prohibition.

Applications aren't open right now, but they can be at any time soon. So, review the information provided in this guide to be prepared when this opportunity arises.

To learn more about New York's licensing options or stay up to date on the latest industry developments, check out the OCM's CAURD page and Distru's blog. 

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