Updates

Vicente LLP Tri-State Update: May 2024

May 16, 2024

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

New York

Regulatory Meetings

The Cannabis Control Board (CCB) met on May 10, 2024. You can watch the meeting replay online. The meeting minutes are not yet posted. Meeting highlights include:

The CCB previously met on April 11, 2024. You can watch the meeting replay online and read the meeting minutes. Meeting highlights include:

  • Issuance of new adult-use cannabis licenses, including:
    • 35 retail dispensaries
    • 22 micro businesses
    • 25 cultivators
    • 11 distributors
    • 8 processors
  • Approval to file for emergency adoption of enforcement regulations. These regulations:
    • Outline the method by which the OCM may commence disciplinary actions and resolve such actions against a licensee or permit awardee
      • The process will be that after a determination is issued, the licensee has 15 days to respond. After those 15 days or the licensee’s response (whichever comes first), the OCM has 30 days to respond to the licensee. If the licensee never responded in the first place, the OCM has 45 days to respond
    • Add permittees and their permitted operating locations to the scope of the regulations for compliance and enforcement purposes
    • Clarify how compliance inspections will be conducted
    • Clarify enforcement’s authority to conduct investigations of unlicensed activities
  • Approval of a resolution allowing the OCM to issue provisional adult-use cannabis licenses
    • This means that the OCM may issue provisional licenses without a vote by the CCB. The CCB will only vote on final licenses. Provisional licenses are only available for retail applications

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

Program Updates

OCM published an “Adult-Use Cannabis License Applications Post Application User Guide” and a “Conditional Adult-Use Retail Dispensary (CAURD) May 2024 FAQ Update.” These FAQs included that CAURD licensees now have the ability to locate in any region, not only the region in which they received their award.

The Office of General Services released its Final Report following a Governor-mandated audit of the OCM. You can read the report here.

Policy Updates

The Corporate Transparency Act (CTA), intended to combat illicit activity by requiring certain US businesses to disclose ownership information to FinCEN, took effect on January 1, 2024. New York has become the first state to enact a bill based on the CTA, the New York LLC Transparency Act (NYLTA). Read more here.

Public comments on the amendments to the adult-use regulations and changes to home cultivation regulations are due on May 20, 2024. Highlights include technical changes to social and economic equity provisions, clarification on the definition of “exclusive use buildings,” and the removal of references to pesticides. Additionally, these changes would authorize personal cultivation (with restrictions) and would authorize the sale of immature medical and adult-use cannabis plants by retailers, microbusinesses, ROs, RONDs, and RODs.

The revised medical cannabis regulations are in effect. 

Licensing Updates

The OCM is reviewing CAURD applications for eligibility as the injunction was lifted on April 1.

Conversion applications for adult-use conditional cultivators and adult-use conditional processors closed on May 3.

The Office of Cannabis Management (OCM) will re-open applications for Processor Type 3 Brand licenses at a date to be announced.

As of May 7, 2024, 118 adult-use retail dispensaries have commenced operations across the state.

New Jersey

Regulatory Meetings

The Cannabis Regulatory Commission (CRC) met on May 8, 2024. You can watch on YouTube or view the slides. Meeting highlights include:

  • Approval of the annual report on medicinal cannabis activities
  • Approval of the report on Social Equity Excise Fee Hearings, including that the CRC recommends investments in grants and low-interest loans to small businesses, in particular to those owned and operated by individuals from economically disadvantaged areas and those with past marijuana convictions
  • Permitting and Licensing Committee report, including that 40 conditional extensions were granted in April 2024
  • Consideration of applications for permit or license changes, including name and ownership changes
  • Approval of adult-use cannabis business applications, including 32 Conditional licenses, 11 Conditional-to-annual conversions, 8 Annual licenses, 1 ATC expansion, and 5 annual renewals

The CRC previously met on April 11, 2024. You can watch the recording on YouTube and see the slides here. Meeting highlights included:

  • The Executive Director’s report, including that there are more than 120 dispensaries open across 20 counties
  • Approval of 17 conditional applications, 15 conditional-to-annual conversion applications, three annual applications, 3 expanded ATC applications, and 6 annual renewal applications
  • Permitting and Licensing Committee report, including that out of 44 2019 RFA awardees, 21 are still waiting to become operational, and 394 license awardees have yet to request an onsite assessment, which led the committee to recommend that CRC waive the requirement that a business must request an onsite assessment within 365 days of license issuance
  • Product Safety and Labeling Committee report, which included an overview of requirements and that a packaging and labeling guide is available on the CRC’s website
  • Approval of the waiver to eliminate the 365-day operational deadline for final onsite assessments
  • Approval of elimination of all operational deadlines for 2019 RFA awardees

The CRC is scheduled to meet on Thursday, June 6, 2024, at 11 a.m. ET.

Policy Updates

Senate Bill 3235 was introduced on May 13, 2024, which would give the CRC jurisdiction over the sale of any hemp products over 0.5 mg/serving and 2.5 mg total THC. The bill has been referred to the Senate Judiciary Committee, which is holding a hearing on May 16.  

The regulations governing the operation of cannabis consumption areas have been adopted.

CRC has issued edibles guidance for manufacturers and retailers, which expands the types of permitted edibles until recent proposed amendments to the Personal Use Regulations are adopted.

CRC Legal is working on guidelines to implement A4151, the bill that Governor Murphy signed into law on September 25, 2023. This law allows certain investors to own up to 35% of up to 7 diversely owned adult-use retail stores in exchange for the provision of "significant financial or technical assistance." This represents a departure from current CRC regulations limiting ownership to one retail license.

Regulatory Updates

Applications for Class 3 Wholesaler, Class 4 Distributor, and Class 6 Delivery licenses opened to all on March 27, 2024. Applications for all adult-use license types are now available.

The CRC will host a Virtual Listening Session on Thursday, May 16, 2024, from 12 to 2 p.m. ET to solicit feedback from licensees and permittees. 

Events

June 17 | Benzinga Market Spotlight: New Jersey

Don't miss Vicente LLP partner Jennifer Cabrera's panel "Crossing the Divide: Converting the Illicit Market to Legal Channels in New Jersey" at the Benzinga Market Spotlight: New Jersey on June 17! The event takes place at the New Brunswick Performing Arts Center in New Jersey. Register now!

Connecticut

Regulatory Meetings

The Social Equity Council (SEC) met on May 7, 2024. You can find a recording of the meeting on the SEC’s YouTube channel here. The meeting minutes have not yet been posted. Meeting highlights include:

  • An overview of the Community Reinvestment Community Collaboration recommendations, including that the SEC’s 2024 priorities include $4,2000,000 towards crisis housing, $4,200,000 towards access to childcare, and 5,000,000 towards tackling food insecurity
  • Approvals of four social equity plans
  • Approval of one workforce development plan
  • An overview of the Social Equity Plan review process
  • Denial of one Equity Joint Venture
  • Approval of one Equity Joint Venture

The SEC also met on April 2, 2024. The meeting minutes can be found here. Meeting highlights include:

  • The SEC’s rebrand to align with the rest of Connecticut’s state agencies’ rebrands
  • An update on the Canna-Business Revolving Loan Fund: 17 applications have been received, and three are in the underwriting phase.
  • An announcement that the SEC will host a Pre-Lottery Business Bootcamp via Zoom. The boot camp will overview Social Equity Applicant criteria and seek to provide business coaching to help prospective applicants determine if applying is the right decision.
  • Approval of 6 Social Equity Plans

The SEC will meet on June 4, 2024, at 10 a.m. ET. The agenda and link will be available on this webpage. Other committee meetings are also advertised on that site.

Policy Updates

HB5150, An Act Concerning Cannabis and Hemp Regulation, and SB200, An Act Establishing a Task Force to Study Consumer Protection Measures, were signed by Governor Lamont on May 11. You can find DCP's press release regarding the changes from HB5150 and its implications for THC-infused beverages here.

Additionally, new FAQs regarding THC-infused beverages have been posted. As a result of the passage of HB5150:

  • All businesses currently selling THC-infused beverages must take inventory of all products in their possession on May 14, 2024. This inventory report must be submitted to DCP by June 15, 2024, and the $1 per container fee is due
  • Businesses in possession of previously allowed THC-infused beverages may sell those products through June 30, 2024, but only if they complete the required inventory and pay the appropriate fee
  • After July 1, 2024, only licensed cannabis retailers and package store permittees may sell THC-infused beverages
  • THC-infused beverages sold by package stores and cannabis retailers after October 1, 2024, may contain no more than 3 mg of THC per 12-ounce container

HB5524, An Act Authorizing and Adjusting Bonds of the State and Concerning Provisions Related to State and Municipal Tax Administration, General Government and School Building Projects, and HB5235, An Act Concerning the Department of Consumer Protection's Recommendations Regarding Cannabis Regulation, have passed the House and the Senate and are pending signature by Governor Lamont.

Program Updates

In April, the adult-use market recorded over $15 million in sales, and the medical marijuana market recorded over $8.2 million in sales. Over 400,000 adult-use products were sold, and over 240,000 medical products were sold. 50% of products sold were usable cannabis, and 30% were vape cartridges.

Questions about cannabis in New York, New Jersey, 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.

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