New York’s Cannabis Control Board unanimously voted to grant provisional license holders six more months to secure property because a court order in December caused a temporary halt in license processing.
“Due to recent litigation related to the adult-use program, the office was unable to process provisional license applications for pretty much most of the months of December and January, impacting the ability of some of our provisional licensees from completing their requirements,” said Patrick McKeage, chief operating officer for the Office of Cannabis Management, during the CCB’s March 20 meeting.
The underlying court order was clarified in mid-January, allowing OCM to review provisional licenses once again.
The first provisional licenses were issued in February 2024, meaning they would have expired last month. With the extension, they now have until August to find a home. There are a total of 134 provisional licenses seeking a storefront, with about 10 to 15 in need of an immediate extension, according to McKeage.
“That kind of ramps up as we go into 2025,” he said. “It’s really just to allow more folks time to find a location. It’s getting harder and harder to find a compliant location.”
Earlier this year, OCM created a provisional license type that didn’t require a secured property while an application was under review. They also created a waiver for CAURD applicants, the earliest licensing group for applicants with a prior New York cannabis conviction, who lost their location during the delayed review process. The change was made in an attempt to ease the hardship of having to continuously pay rent on a property for months, and in many cases over a year, before they have a chance to obtain a license and open for business.
A collection of adult-use retail applicants sued the state in the Albany Supreme Court over the creation of the provisional license, arguing that they were unfairly required to secure and hold property when the provisional license holders did not.
Judge Sharon Graf on Dec. 12 issued a temporary restraining order, in Organic Blooms LLC et. al. v. New York State CCB et. al., preventing the state from processing any additional filings from CAURD and provisional license holders while reviewing their applications to convert to an annual license. This left 134 provisional license holders without a clear timeframe to secure a location.
On Jan. 16, Judge Sharon Graf issued a clarification to her previous restraining order explaining that it did not apply to provisional applicants who were approved by Dec. 12, 2024.
At the same March 20 meeting, the CCB also voted to approve 101 new adult-use licenses, bringing the state’s total number of adult-use licenses to 1,614. The awarded licenses were two cultivation, 29 retail, 42 processor, 14 distributor and 14 microbusiness.
CCB Chair Tremaine Wright reported that 330 retail shops were open for business throughout the state, as of March 20.
“Our industry is growing,” she said. “We are seeing the positive economic and community impacts of a well-regulated cannabis market.”
New York board mulls cultivation pause
OCM also recommended a slowdown of cultivation approvals.
“In general, supply must be sufficient to meet demand,” said Reid.
The state had 195 license cultivators and 229 microbusinesses, representing 6.87 million square feet of canopy, according to OCM data presented during the meeting. Of that total, about 5.72 million square feet comes from larger outdoor cultivators, while 1.15 million comes from microbusinesses.
“Croptober 2025 will be the first time that New York will see what a healthy cohort of operators will do to impact the market,” said Reid. “At this time OCM recommends the board slow the pace on cultivation license approvals pending outcomes of the 2025 growing season. We cannot think that we are exceptional and that the rules of economic realities do not apply.”
Also at the meeting, the recently formed Trade Practices Bureau provided its first monthly update. Based on numerous complaints, the TPB currently has five active cases and is investigating claims of inversion and True Party of Interest infractions, ownership and control abuses, license stacking, and pay-to-play schemes.
“OCM’s Trade Practice Bureau is already proving to be a critical tool in our enforcement strategy,” said OCM Acting Executive Director Felicia Reid. “In just its first month, TPB has launched investigations into a range of serious violations in the market.”
