Cannabis – Frequently Asked Questions

What You Need to Know About the NYS Adult-Use Cannabis Regulations and Applications

CANNABIS LAW – FAQ’S

What do entrepreneurs need to know about the NYS Adult-Use Cannabis Application and Regulations for 2023?
There are over 340 pages, and many entrepreneurs are often overwhelmed by all the regulations which are incredibly complicated. That’s why entrepreneurs need to approach the application process from two different angles, legal and regulatory. That’s why having a seasoned cannabis law attorney, who understands the science, chemistry and governmental aspects, can be instrumental in securing an application. At DHC we have corporate, real estate, banking and financing, land use and zoning and cannabis lawyers as well as government relations professionals and lobbyists that can help in a myriad of ways to any potential challenge your new business encounters.

How can a cannabis attorney help me with my cannabis business?
Starting a cannabis business is like starting any other business, just a lot more complicated. An attorney who specializes in the cannabis industry will help an entrepreneur or a potential business owner form the actual entity itself. There are critical decisions that have to be made before you even start your company. What is the formation going to look like? What is the structure going to look like? Who are your partners going to be? Who are the owners going to be? And so on.  Each decision you make affects the other decisions you have to make. Lawyers can help navigate that space for you and create those documents that will guide your corporation going forward and make sure you, as the owner or the founder, is protected.

Why is the NYS Adult-Use Cannabis and Applications and Regulations Guidelines so extensive?
The NYS regulations as they were promulgated, provide entrepreneurs with a roadmap for exactly what a cannabis business needs to do and how it needs to operate. From how large of a canopy they can have to grow their cannabis flowers to the type of security the business needs if it’s opening up a dispensary — and everything in between. The regulations tell the business owner exactly what to do and how to do it. But it does so in a way that’s not exactly easy for most people to understand. That’s why lawyers and consultants are often asked to help translate some of these regulations and make it understandable to the average business owner.

What’s the difference between what a cannabis accountant and a cannabis attorney?
A cannabis accountant will make sure that the business from a financial and tax standpoint, and any potential  liability is structured in a way to protect the business owners. Whereas cannabis lawyers are more apt to protect the corporate structure and make sure business owners can  anticipate potential threats and avoid litigation wherever possible. A cannabis attorney  will structure an agreement to  make it as bulletproof as possible from potential litigation.

Why has NYS created a 2-month window for cannabis license submissions?
New York State has created this 60-day window to drive the application process, hoping to cede as many applications as they can into the state. There’s also a pent-up demand for the marketplace to finally open. Over the past year, there were a lot of starts and stops in the cannabis marketplace. Now the state is seeking to speed up application process so businesses can better manage the pent-up market demand for cannabis products across the state. New York State cannabis growers have stated that they have abundant supply of product but have been unable to distribute to dispensaries because they have not been able to open so there’s both pent-up demand and excess supply and New York State is trying to alleviate both issues.

What are the advantages of working with an attorney when seeking a cannabis license in the regulatory process?
Now that the state is opening up the applications to the general public on October 4, 2023, there aren’t any restrictions to entering the marketplace. Therefore, entrepreneurs or business owners who want to apply, can apply. Having a seasoned cannabis attorney on a business owners’ side can help guide them through the process, increasing their potential success, while providing them with the best chance of obtaining a cannabis license.

What happens after the NYS Cannabis deadline of December 4, 2023?
Now that adult-use cannabis market has been opened to the general public, it’s expected that by December the NYS Office of Cannabis Management (OCM) will be providing conditional or provisional licenses to the first group of businesses in the adult-use cannabis marketplace. And as cannabis attorneys, we believe it will kickstart the market and provide an opportunity for New Yorkers to purchase cannabis in a safe, regulated and legal environment.

What kind of fees should I expect to pay to start a cannabis business?
There are a series of fees that any applicant will have to pay the New York State when applying for a license, for example, there’s a $1,000 non-refundable application fee and then depending on the license costs will vary. If an entrepreneur obtains a license, there are various licensing fees ranging from several hundred dollars all the way up to thousands of dollars depending on the license being sought.

Will everyone who applies for a license get a license? 
The initial dispensary application process was called the Conditional Adult-Use Retail Dispensaries, otherwise known as the CAURD licensing application. The state initially provided a certain number of licenses throughout New York State, but that number changed throughout the process. Moving forward, it currently is unclear what the final number of applications the state will approve is, it’s really subject to the state.  

Then what is the likelihood of entrepreneur seeking a cannabis license, actually getting one?
That’s why it’s very important to have a seasoned cannabis lawyer working with business owners, helping guide them through the process. But as in most new business ventures there are no guarantees, it’s a process, but having the right counsel can make a world of difference.

What does the NYS October 4th cannabis license opening entail and how can you help me with the process?
On October 4, 2023 New York State is opening up the applications for various components of the adult-use cannabis marketplace, including cultivation, processing, distribution and selling cannabis via retail dispensaries or on-site consumption. As both a full-service law and government affairs firm that specializes in cannabis, DHC is very well positioned to provide assistance in every aspect of every application. We can provide both the administrative and regulatory assistance for the application itself, but perhaps more importantly, help form the corporate structure, negotiate leases or purchase agreements for any real estate needs, advocate to local elected officials who can provide critical support to your application. So there are many benefits we can offer a cannabis entrepreneur/business owner.

Once an application is filed, how long will entrepreneurs have to wait to obtain a cannabis license?
NYS is giving cannabis entrepreneurs a 60-day window to submit applications to the state. However, they also said that starting on November 4, the state is going to provide a review of applications for retail and onsite dispensaries that have control over their locations. That means OCM is going to give a first look to applications to businesses that either own or lease their space currently. And that’s why it is so critical for cannabis business owners to start if they haven’t already begun the process. 

Why should I choose DHC as my law firm partner or just file my cannabis application myself?
DHC has tremendous experience and success assisting cannabis retailers. In fact, when New York State came up with their first licensed process for the conditional adult-use retail dispensary licenses, DHC was successful in obtaining five licenses for five different clients. So, we have valuable knowledge and can assist with regulatory, legal, governmental and business issues, making our firm a turn-key solutions provider

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We hope our answers to your Cannabis Law FAQ’s were helpful to you, but if you have additional questions or require support from our Cannabis Law team, please fill out and submit our contact us form below and one of our attorneys will reach out to you shortly. Thank you.

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