Vicente LLP Mid-Atlantic Update: December 2023

Jan 23, 2024

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Each month Vicente LLP highlights notable cannabis information from New York, New Jersey, Connecticut and Maryland.

New York

Licensing Updates

Applications for adult-use licenses, including Type 1 and Type 2 Indoor Cultivator, Processor, Distributor, Microbusiness, and Retail Dispensary licenses closed on December 18, 2023. Applications for new registered organizations closed on December 19, 2023.

The Office of Cannabis Management (OCM) announced that it will re-open applications for Processor Type 3 Brand licenses.

Program Updates

Public comment on the revisions to the Medical Cannabis Regulations were due on January 8, 2024.

OCM’s 2023 Annual Report was released. Highlights include:

A breakdown of new adult-use applications - OCM received 6,934 applications for adult-use licenses (55% of these were SEE applications), including:
- 372 cultivator
- 538 processor
- 351 distributor
- 4,324 retail
- 1,349 microbusiness license applications
An enforcement update - as of December 15, 2023:
- $1,312,500 in fines had been levied against unlicensed operators
- $56 million street value of products have been seized
- 369 enforcement inspections of illicit operations have been conducted
- 11,600 pounds of illicit products have been seized
A staffing update – as of December 31, 2023, OCM has 162 full-time employees;
Hemp Licensing Update - as of September 30, 2023, there are:
- 60 active hemp processor licenses
- 5 active farm processor licenses
- 432 active hemp distributor permits
- 3,301 active hemp retailer licenses
- 22 active cannabinoid hemp temporary retail permits

OCM released application statistics during its Roadmap to Adult-Use Post Application Process LinkedIn Live on January 16, 2024. OCM received 6,875 total applications, including:

365 cultivator applications
537 processor applications
1,320 microbusiness applications
350 distributor applications
4,303 retail applications

70% of all applications were submitted by Social and Economic Equity applicants. 9% of applicants received Extra Priority.

Litigation Updates

Another lawsuit has been filed by Variscite on December 18, 2023, threatening to hold up the adult-use program further. Variscite is asking the court to issue an injunction prohibiting OCM from:

“Processing any applications for Licenses from the Adult Use Application Program held from October 4 through December 18, 2023”;
Taking further steps to process applications for storefront cannabis dispensary licenses from the CAURD Application Program held from August 25 to September 26, 2022, or award any further Licenses thereunder;
- Fully operational CAURDs would be exempt.
Using an Application System that does not permit applicants to prove residence in a community disproportionately impacted by the enforcement of cannabis prohibition if that community is outside of New York.

On December 28, 2023, Variscite filed an emergency order to show cause for a temporary restraining order and preliminary injunction. This asks the court to immediately prohibit OCM from issuing any retail dispensary licenses.

Regulatory Meetings

The Cannabis Control Board (CCB) met on January 12, 2024, to approve existing ROs’ applications for expanding to adult-use operations.

The CCB held a special meeting on December 29, 2023, to vote on registered organizations' adult-use transition applications and testing laboratory approvals. The vote to allow two ROs to transition to adult-use operations failed.

You can follow OCM and the CCB’s day-to-day activities on their Instagram account @nys_cannabis.

New Jersey

Policy Updates

The proposed regulations governing the operation of cannabis consumption areas have been approved for publication in the state register.

Public comments on the proposed edible rules closed on December 15, 2023.

Regulatory Meetings

The CRC met on January 17, 2024. You can watch the recording on YouTube and see the slides here. Meeting highlights included:

An update on dispensary openings that included that there are over 90 medicinal and recreational dispensaries operating in 20 counties
An update on patient enrollment numbers
Data on applications received and approved
Approval of the proposed rules for cannabis consumption areas to be published in the register
Approval of new cannabis business licenses including 22 conditional licenses, 36 conversion licenses, 12 annual license applications, and one expanded ATC application

The CRC met on December 7, 2023. You can watch the recording on YouTube. Meeting highlights included:

Approval of regulatory waivers and policy updates, including reduced renewal fees for patient registrations, renewals of ATC medical permits, and the renewal process for newly licensed testing laboratories
Approval of license name and location change
Approval of a medical cannabis business renewal
Approval of new cannabis business applications including conditional licenses, conversion licenses, annual licenses, and expanded ATC certifications

Connecticut

Program Updates

The Department of Consumer Protection (DCP) released a market update to celebrate one year since the first adult-use cannabis sales in the state. Since adult-use sales began on January 10, 2023, the Connecticut adult-use and medical market has conducted a combined $274 million in sales. Additionally, 19 new retail and hybrid retail establishments, two delivery services, one Disproportionately Impacted Area Cultivator, and one micro-cultivator (an equity joint venture) have opened. An additional 94 provisional licenses have been issued across all license types, detailed below.

DCP released data from December 2023 cannabis sales. Sales for adult-use cannabis and medical marijuana totaled nearly $27.5 million in December. The adult-use market recorded over $17.1 million in sales, and the medical marijuana market recorded almost $10.3 million in sales. The average price of products for medical marijuana patients was $34.94, and the average cost of adult-use products was $37.77. 45% of sales were usable cannabis/flower, 35% were vapes, and 13% were edible products.

As a reminder, the adult-use cannabis transaction limit has increased to ½ oz of raw flower (or the equivalent).

Regulatory Meetings

The Social Equity Council met on December 5, 2023. Meeting highlights include:

Denial of one Social Equity Application
Approval to move forward with updating the social equity plan criteria

The Social Equity Council will meet on January 9, 2024 at 10am. The agenda and link to view have not been posted, but will be made available on this webpage. Other committee meetings are also advertised on that site.

Maryland

Program Updates

Applications for adult-use licenses closed on December 12, 2023. It is unclear when the lottery will be held as the Maryland Cannabis Administration released a statement that due to the volume of applications, MCA expects to complete their review of all applications “in the next several weeks.”

Regulatory Meetings

When scheduled, public meetings will be noticed here.

Questions about cannabis in New York, New Jersey, Maryland and/or Connecticut? We're here to help with corporate law, market analysis, selecting a location, community outreach, licensing, and more. Please feel free to reach out to our Tri-state team.