New York Accepting Cannabis Business Applications for Adult-Use Processor Type 3 Branding Licenses
By Brandon Kurtzman, Bridgette Nikisher
Nov 5, 2024
Are you looking to bring your cannabis brand to the New York market? The Office of Cannabis Management is now accepting applications for Adult-use Processor Type 3 Branding Licenses.
What is a New York Cannabis Processor Type 3 License?
The Adult-Use Processor Type 3 Branding license (Brand License) authorizes the license holder to market their brand(s) in New York State's adult-use cannabis market by entering into white labeling agreements with other licensed adult-use processors. The Brand License allows licensees to enter into white labeling agreements without becoming a True Party of Interest (TPI) of another licensed adult-use processor. This enables out-of-state cannabis brands looking to expand or operators looking for a reduced-cost business model to market their brand in New York without establishing and operating a processing facility.
What is a white labeling agreement?
White labeling is an agreement where one company (in this case, the Brand License holder) allows another company (in this case, another licensed Adult-Use Processor) to manufacture products under the Brand License holder's name.
What are the permitted activities of a Processor Type 3 Branding license?
A Type 3 Brand License holder is permitted to provide intellectual property (logos, quality plans, etc.), non-cannabis ingredients (rolling papers, etc.), equipment, and other materials to any licensed Adult-Use Processor with which the Brand License holder has entered into a white labeling agreement.
The Type 3 Brand License holder can set standards regarding the quality of the finished product, outlines of the manufacturing processes used to make the products, etc., in their white labeling agreement to ensure that products with their brand name meet their standards.
What are the prohibited activities of a Processor Type 3 Branding license?
A Type 3 Brand License holder may not engage in any cannabis plant-touching activity. This includes participating in any extracting, blending, infusing, packaging, labeling, or other processing or manufacturing of cannabis products. This license is solely for licensing and branding purposes.
Who is eligible to apply for this New York cannabis business license?
Applicants meeting the following criteria are eligible to apply for a Type 3 Brand License:
- The applicant and all individuals in the ownership structure must be 21 years of age or over
- The applicant must be a United States citizen, or a person lawfully admitted for permanent residence in the United States
- The applicant must have a FEIN, unless a sole proprietor, in which case a SSN can be used
- Names and contact information for all TPIs
- Ownership, management, and financial information, including organizational structure/ charts, capitalization tables/ ownership structures, and any proposed or existing sources of capital
Notably, this license does not require that the license holder has a licensed premises in New York State.
What are the ownership restrictions?
No processor, Type 3 Brand License Holder, or its TPI(s) is permitted to have any direct or indirect interest in an Adult-Use Retail Dispensary, On-Site Consumption, Delivery, Registered Organization, or Cannabis Laboratory licensee or permittee. This includes being a TPI, passive investor, or having a goods and services agreement with, or by any other means, with the Adult-Use Retail Dispensary, On-Site Consumption, Delivery, Registered Organization, or Cannabis Laboratory licensee or permittee.
What is the cost?
The application fee for a Type 3 Brand License is $1,000.*
The license fee for a Type 3 Brand License is $2,000 per processing premises.*
*Tier 1 or Tier 2 cultivator license holders applying for a Type 3 Brand License will pay a reduced license fee of $500.
*Qualified Social and Economic Equity applicants will pay a reduced application fee of $500 and a reduced license fee of $2,000.
How can you apply for a New York Adult-Use Processor Type 3 Branding license?
All applications must be submitted via New York Business Express.
Interested in applying? Vicente's New York team is here to help! Contact us at 917-338-5455 or newyork@vicentellp.com. If you are looking to enter or expand your business in the New York market, Vicente's team can also assist with corporate law matters, market analysis, real estate, compliance, and more.
Register for our webinar "Bringing Your Cannabis Brand to New York," where Vicente attorneys and special guests from Wana, Wyld and Eaton Botanicals will discuss New York cannabis regulations and how major brands are entering the country's largest new cannabis market.
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