New York's Fledgling Adult-Use Cannabis Market Could Crash June 1

The state's conditional distributor licenses expire on June 1.

Stakeholders in the emerging adult-use cannabis program in New York are getting increasingly anxious about the looming date of June 1.

That’s when the state’s conditional distributor licenses expire, potentially leaving cannabis producers with no way to get their products to the shelves or for the few licensed cannabis stores to receive more goods for their stores.

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The temporary nature of these licenses was the result of New York Office of Cannabis Management’s push to get the adult-use program up and running, but it realized there were no licensed distributors.

On Feb. 22, 2022, Gov. Kathy Hochul signed into law S.8084-A/A.9283-A, creating an adult-use conditional processor license. That license allowed businesses that were already licensed to process hemp in the Cannabinoid Hemp Program to apply for a permit to process adult-use cannabis products.

Licensees were also authorized to distribute cannabis products to duly licensed adult-use retail dispensaries until June 1, 2023. After that date, conditional processors seeking to distribute cannabis products are required to apply for a separate distributor license.

The application window for Adult-Use Conditional Processors closed on Aug. 31, 2022.

As of Sept. 30, 2022, there were 475 active licensed distributors in the hemp program, but it’s unclear how many, if any, distributor licenses have been approved.

The latest OCM update from the April 23 board meeting noted that the board approved 99 more CAURD provisional licenses – bringing that up to a total of 300 licenses and an additional lab license. There has been no mention of distributor licenses in any of the meeting notes. Green Market Report asked the OCM for an update on the situation but has not received an answer yet.

“Like everyone, I’m confused as to why the Office of Cannabis Management has not yet addressed the impending sunset of the conditional licenses on June 1,” said Kristin Jordan, founder of the cannabis advisory firm Park Jordan. “Surely, the extension is imminent, as no additional licenses can be awarded in sufficient time.”


It’s been rumored that the conditional distributor licenses will be extended, but the OCM has said nothing officially about that and only refers people back to the website, which has no update.

Dave Vautrin, operating partner at the Manhattan dispensary Union Square Travel Agency, said he wasn’t concerned at all.

“A bill was introduced on May 17 to extend by one year. If it does not pass, it might get introduced as a stand-alone bill or extended through emergency regulations,” he said, sharing a document with the bill’s details.

Vautrin said that with three options on the table, at least one should satisfy the situation. However, he did concede that emotions are running high with regard to the program.

That is definitely true.

Anxiety was high at the recent NY Cannabis Insider conference in Albany. Some attendees weren’t sure if they should continue acting as a distributor in the hopes of an extension or if they should cease operating in that manner according to the expiration date.

The frustration at not knowing about the status and the confusion over what to do were evident.

Should these distributors decide to step aside if there is no extension to the law, the entire program could grind to a halt. Stores would be left to sell off their remaining inventory, and the brands would be stuck with unfulfilled orders.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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