2023 New York Laws › CAN - Cannabis › Article 4 - Adult-Use Cannabis › 69-A - Conditional Adult-Use Processor License.

* §  69-a.  Conditional  adult-use processor license. 1. A conditional
adult-use processor license shall be subject to the same authorizations,
restrictions  and  requirements  applied  to  any  adult-use   processor
pursuant  to  section sixty-nine of this article for the duration of the
conditional period of the license, as well  as  to  any  new  terms  and
conditions imposed by the board and office.
2.  To  be  eligible  to  apply  for a conditional adult-use processor
license, a processor must:
(a) have applied for a cannabinoid hemp processor license pursuant  to
section  ninety-two  of  this chapter before January first, two thousand
twenty-two;
(b) hold an active cannabinoid hemp processor license  issued  by  the
office; and
(c) as an individual applicant have an ownership interest of fifty-one
percent or more, or as any other applicant have an ownership interest of
fifty-one percent or more of the entity that is the licensee.
3.  A  conditional  adult-use  processor  license  shall authorize the
processing and manufacturing of cannabis products provided the  licensee
complies  with  all  requirements  for the processing and manufacture of
cannabis products as set out  by  the  board.  A  conditional  adult-use
processor   licensee   shall   only  perform  extraction  activities  if
authorized to under the licensee's cannabinoid  hemp  processor  license
and all extraction methods are subject to office approval.
4.  A  conditional  adult-use  processor licensee must comply with any
environmental standards and requirements as mandated by the office.
5. The processing of cannabis shall only  be  permitted  at  the  same
location  in  which  the  conditional  adult-use  processor  licensee is
authorized to process hemp, unless expressly authorized by the office.
6. A conditional adult-use processor licensee shall have the authority
to distribute cannabis products without holding an adult-use distributor
license established pursuant to  section  seventy-one  of  this  article
until  June  first, two thousand twenty-four, provided that the licensee
complies with all requirements for the distribution of cannabis products
as set out by the office. After June first,  two  thousand  twenty-four,
any  conditional processor seeking to distribute cannabis products shall
be required to apply for and receive a distributor  license  to  conduct
this activity.
7.  For  the  duration  of  the  conditional period of the conditional
adult-use processor license, the ownership or  organizational  structure
of the entity that is the licensee shall not be amended, except pursuant
to  the  provisions  of  subdivisions  two,  three  and  four of section
sixty-seven of this article.
8. The office shall set out specific terms and conditions setting  out
requirements   necessary  to  be  awarded  and  maintain  a  conditional
adult-use  processor  license,  including  but  not   limited   to   the
requirement  that  a  licensee agrees to participate in an environmental
sustainability program and a  social  equity  mentorship  program.  Such
program  shall  be  directed to train individuals interested in becoming
licensed processors and shall leverage remote and  in-person  engagement
to  provide  mentees  with  experience in processing techniques and good
manufacturing practices. Candidates for the mentorship program  must  be
at  least  eighteen years of age, must be a New York state resident, and
must be individuals that would be considered social equity applicants as
defined by section eighty-seven of this article. The license  terms  and
conditions  set  out  by  the  office  shall include requirements that a
licensee enter into a labor  peace  agreement  with  a  bona-fide  labor
organization  that  is actively engaged in representing or attempting to
represent the applicant's employees within six months of licensure, that

the maintenance of such  labor  peace  agreement  shall  be  an  ongoing
material condition of licensure, and that licensees shall meet any other
eligibility requirements established by the office.
9.  The board shall establish a non-refundable application and license
fee, in a manner consistent with section sixty-three  of  this  article,
for  the  conditional adult-use processor license. No such license shall
be issued after December thirty-first, two thousand twenty-two and  such
license  shall  only  be  valid  through  June  thirtieth,  two thousand
twenty-four.
10. A conditional adult-use processor license shall be deemed to  have
been  surrendered  to  the  board  and a conditional adult-use processor
licensee shall be deemed not to be in good standing,  as  determined  in
the  discretion of the executive director in a written notice, effective
upon delivery to the licensee at the licensee's last  known  address  on
file with the office, for reasons including but not limited to:
(a)  failure  to  abide  by  all  the  terms  and  conditions  of  the
conditional adult-use processor license;
(b) failure to adhere to all requirements set out in  regulations  and
guidance,  including  those  promulgated after receiving the conditional
adult-use processor license;
(c) failure to submit information, records, or reports;
(d) failure to correct deficiencies in  accordance  with  an  approved
corrective action plan;
(e) deviation from regulations, licensing terms, or standard operating
procedures  in  a  manner the office determines may jeopardize health or
safety of the public, or the quality of products produced;
(f) failure to provide office employees with access to  the  premises;
and
(g)  failure  to begin operations within six months of the date of the
issuance of the license.
11. A licensee whose conditional adult-use processor license has  been
deemed  surrendered  may  within  ten  days of the delivery date of such
notice appeal the determination of the executive director to  the  board
pursuant  to  subdivision  eighteen  of section ten of this chapter. The
board shall have sole discretion to determine the conduct of the appeal,
which shall include notice and an opportunity to be heard.  Upon  review
by  the board, the board shall issue a final written determination which
may then be reviewed pursuant to section one hundred thirty-five of this
chapter and article seventy-eight of the civil practice law and rules.
12. In the event  that  a  conditional  adult-use  processor  licensee
elects  to  cease  operation of all permitted activities or to surrender
its license, the following provisions shall apply:
(a) the conditional adult-use  processor  licensee  shall  notify  the
office  in writing at least thirty days prior to the anticipated date of
closure;
(b) such written notice shall include a proposed plan for closure. The
plan shall be subject to office approval and  shall  include  timetables
and  describe  the  procedures  and  actions  the licensee shall take to
properly destroy or otherwise dispose of all the  licensee's  supply  of
cannabis and/or cannabis products; and
(c)  the  licensee or former licensee must maintain and make available
to the office all records related to the cultivation of cannabis  for  a
period of three years.
13.  No  later than ninety days before the expiration of a conditional
adult-use processor license, the office shall, pursuant to a request  by
the  licensee,  review  the  conditional adult-use processor licensee to
determine whether they are  in  good  standing  with  the  office.  Good
standing   shall  include,  but  not  be  limited  to,  compliance  with

subdivision seven of this section. Any licensee  found  to  be  in  good
standing  shall  be  eligible  to  apply  for  and  receive an adult-use
processor license, provided the licensee can meet  all  requirements  of
the new license.
14.  For the purposes of this section, the office has the authority to
define terms including but not limited to "extraction" as  part  of  the
terms and conditions of the conditional adult-use processor license.
15. Nothing in this section shall limit the authority, power, or other
rights or remedies of the board or office.
* NB Repealed June 30, 2024