As the saying goes, "If you can make it in New York, you can make it anywhere." This sentiment holds especially true in the bustling world of cannabis entrepreneurship. With the cannabis industry booming and New York's iconic market allure, starting a dispensary in the Empire State has become both a golden opportunity and a colossal challenge. But fear not! Whether you're a seasoned entrepreneur or a budding business owner, our comprehensive guide, "How to Start a Dispensary in New York 2023: The Must-Have Guide," is designed to navigate you through every twist and turn of this journey. From understanding intricate state regulations to picking the prime location, we've got you covered. Dive in and discover the roadmap to your very own successful New York dispensary in 2023.
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It's often said that foreknowledge is the key to triumph, especially in business. This adage resonates profoundly within the cannabis industry. Behind every thriving cannabis venture lies a leader who embarked on their journey with a clear-eyed understanding and substantial preparation. Let's be candid: Can any first-time cannabis entrepreneur truly claim to be 100% prepared? The answer is a resounding no. But there's immense value in arming yourself with as much information as possible, then bracing for the inevitable curveballs.
Diving headfirst into the cannabis industry without a compass can be overwhelming. Many newcomers find themselves ensnared in a web of unexpected challenges, perpetually feeling like they're treading on shaky ground, dodging pitfalls at every turn. This isn't the narrative we want for you.
Before taking the plunge, it's crucial to introspect: Is opening a dispensary in New York genuinely your calling? The state's vibrant and complex marketplace is not for the faint-hearted. And if you're a seasoned cannabis business owner from another state, don't be too quick to assume that replicating success in New York will be a cakewalk. Every state has its unique regulatory landscape, and New York is no exception. Take a moment to gauge the state's distinctive framework and weigh the opportunities and challenges before charting your next move. Let's delve into some of the basic rules surrounding dispensary licenses to ensure you're not just leaping into the unknown, but marching forward with clarity and purpose.
Conditional Adult Use Retail Dispensary (CAURD) licenses for justice involved individuals were rolled out in November 2022, many folks thought that might be it. But let's clear up a misconception: The Empire State's green ambitions don't end there. Those initial CAURD licenses were a heartfelt nod to those who've felt the brunt of the war on drugs. It's a reparative step towards righting past wrongs. However, hold onto your hats, because there's more to come! The next set of licenses will be open to a broader spectrum of applicants and application acceptance begins in October 2023, so now is the time to start preparing! Here's where it gets interesting: New York is prioritizing groups from disproportionately impacted communities and our service-disabled veterans. But fear not, fellow aspiring dispensary owners! Even if you're not part of these specific groups, you're still very much in the game. The state's vision? To carve out an inclusive and equitable cannabis industry. While no state has perfectly achieved this vision yet, NY is determined to lead the charge. Just remember, you need to be 21 or over to throw your hat in the ring. Also, having that "good moral character" badge will go a long way. It's a fancy way of saying you've got a clean slate – no shady backgrounds, you've been diligent with taxes, and overall, you're on the straight and narrow. So, dream big and get ready to be part of New York's green wave!
Diving into the world of dispensary ownership in the heart of New York might sound like a thrilling venture at the outset. The allure of joining the budding cannabis industry and making a mark in this dynamic market is undeniable. However, before you plunge headfirst into this journey, it's imperative to familiarize yourself with the foundational aspects of what this undertaking truly entails. Being at the helm of a dispensary is not just about catering to customers and celebrating the wonders of cannabis; it often comes accompanied by a web of regulations that might be more stringent and particular than one might initially anticipate. In other words, owning a dispensary may not be as free spirited as it seems to be. This isn't meant to deter potential entrepreneurs, but rather to emphasize the importance of informed decision-making. Before you set your sights on this dream, let's delve into some of the basic rules surrounding dispensary licenses to ensure you're not just leaping into the unknown, but marching forward with clarity and purpose.
What can you do with this license?
If you have a dispensary license, you can buy and sell cannabis at your store. You can also deliver it to cannabis users right from your shop.
How many dispensary licenses can one person have?
You can have up to three dispensary licenses. No more than that!
Can I have other types of cannabis-related licenses too?
Nope! If you have a dispensary license, you can't have licenses for growing cannabis, processing it, or any of those other fancy cannabis businesses. But, there are a couple of exceptions, so if you're curious, let us know!
What about the place where I want to set up my store?
When you select your ideal city or town in New York, make sure that their local government is allowing cannabis businesses. Some regions throughout the state have opted out of the cannabis program and wont allow dispensaries to operate. Check with the local zoning authority to understand what zoning restrictions you'll have to keep in mind when selecting your location. Some zoning regulations may be so strict that you should reconsider whether or not it's really the place you want to set up shop.
Any specifics about the location of my store?
Absolutely! Your store should be at street level and must have its main entrance facing a public road. It should be a place that's meant for business. Delivery-only or micro-business license holders are the only ones with a bit of flexibility here. Additionally, some places in New York have opted-out of allowing dispensaries in their region so before you go looking for real estate, make sure that the city or town you are hoping to operate has opted-in to allow dispensaries.
Are there places I can't set up my store near?
Yep! Keep your store at least 500 feet away from schools, 200 feet away from places used exclusively as places of worship on the same street, 500 feet away from a community/public youth facility, 2,000 feet away from another dispensary if the town's population is below 20,000, and 1,000 feet away from another dispensary if the town's population is more than 20,000.
One significant challenge that the cannabis industry faces is securing funding. Unlike other sectors, traditional banks often shy away from offering loans to cannabis ventures. So, where does that leave potential entrepreneurs? While the regulations don't specify an exact amount of start up capital required for potential dispensary applicants, they do delve deep into the financial workings of your enterprise. Expect to provide detailed insights into the financial backers of your company, the initial capital you're working with, and your projected business earnings and business plan. If your coffers currently sit empty, consider seeking a partnership, attracting investors, or waiting to enter the industry once licensed dispensaries begin recruiting.
As a ballpark figure, opening a dispensary typically requires a minimum investment of around $1,500,000 to $2,500,000. This sum ensures you can cover initial expenses and sustain your store for several months. However, the exact amount will hinge on factors such as real estate prices, construction costs, and the upscale nature of your dispensary. We've seen some entrepreneurs kickstart their ventures with a leaner budget.
Bear in mind, these figures might seem daunting, but there's a glimmer of hope. New York is considering introducing loans or grants tailored for "social equity" applicants, including. Specific details about this financial support remain under wraps, so it's best to proceed with caution and not rely on it for now.
It's essential for potential dispensary owners to thoroughly research and budget for costs to ensure the sustainability and profitability of their venture. Here's a list of the major costs associated with starting a new dispensary:
When it comes to opening a dispensary in the Big Apple, finding the perfect real estate is paramount. Given New York City's bustling real estate scene combined with strict regulations for dispensaries, this task can be as tricky as threading a needle while riding the subway. It's not just about what's on the inside, but where the building is, its surroundings, and the nature of its landlord.
Before You Dive In
You might think you need a spot lined up before applying, but the good news is, you don’t have to commit just yet. While you need to specify the jurisdiction where you want to operate in your application, the specific location details aren't required until you’ve secured a provisional license. But a word of advice: Have potential sites in mind ahead of time. Imagine securing a license only to realize you can't find a feasible location!
Space Matters
As you embark on this property hunt, aim for a minimum size of 2,500 square feet. The state's requirements for facility design mean you’ll need adequate space to accommodate all designated areas for operations and secure product storage.
Prime Locations
In the world of business, the age-old mantra holds true - location, location, location. You might be tempted to snag the first place that meets basic dispensary requirements, but resist the urge. It’s critical that your dispensary is easily accessible to customers. A remote or convoluted spot could spell doom for your foot traffic and revenue. Additionally, consider the construction potential of the spot to avoid unexpected renovation expenses.
Distance Check
Secured a seemingly perfect location? Great! But before you celebrate, ensure it adheres to the Office of Cannabis Management's distance rules:
Build a Bond with Your Landlord
You've done the legwork and found an ideal spot meeting all requirements. Now, remember the human element – your landlord. Understand their stance on cannabis businesses. Are they genuinely supportive or just passively tolerant? Foster a relationship early on, ensuring they're fully on board. After all, a harmonious landlord-tenant relationship will be foundational to your dispensary's success. Happy hunting!
Using this checklist, potential dispensary owners can navigate New York's intricate real estate landscape with confidence and clarity.
Pre-application Research:
Size & Layout:
Location:
Distance Requirements:
Zoning Laws:
Lease & Landlord:
Construction & Renovation:
Security:
Accessibility:
Neighborhood Relations:
Financials:
Environmental Concerns:
Insurance:
Exit Strategy:
Legal Review:
Future Expansion:
Venturing into the cannabis industry, especially in a bustling hub like New York, requires not just passion, but also a deep understanding of the intricate landscape of cannabis and its business side. Recognizing this need for in-depth knowledge and consistency in the sector, the Office of Cannabis Management (OCM) has taken the helm to ensure every dispensary applicant is well-prepared.
The OCM is in the process of rolling out a specialized training program. Its main objective? To establish a consistent baseline of knowledge about cannabis and the ins and outs of running a cannabis-related business. This isn’t just any other training – it's designed to cover all the essential aspects, from understanding different cannabis strains to the nuances of regulatory compliance and best business practices in this dynamic industry.
Now, if you're considering stepping into the world of dispensaries, there's something you should know: Completing the OCM’s workforce training program isn’t optional. It's a prerequisite. Before you can even think of applying for a dispensary license, you must have this training under your belt. Consider it the state's way of ensuring that every new entrant to the market is not only serious about their intentions but is also equipped with the knowledge to operate ethically, responsibly, and successfully.
So, if you're passionate about cannabis and envision a future running a dispensary in New York, embrace this training opportunity. Not only will it smooth your application process, but it will also provide you with invaluable insights and skills to navigate the ever-evolving cannabis business landscape. After all, in a rapidly growing industry, being well-informed is your best asset!
Many entrepreneurs go into application processes with zest and soon have the wind blown out of their sails when they face the barrage of requirements and complex processes. Don't get discourages. In this article we'll go over a ton of information about the dispensary requirements in New York, but before we discuss what you'll need to do for the application, let's discuss HOW to do it.
Embarking on the path to open a dispensary in New York can feel like trying to assemble a thousand-piece puzzle with no clear picture to guide you. The application process is intricate, and for those unacquainted with the nuances, finding accurate and comprehensive information on how to navigate this labyrinth can be a challenge in itself. If you’re staring at this daunting task thinking, “I can’t afford a top-tier consultant to guide me,” don’t lose hope just yet!
While having a consultant by your side can be invaluable, success isn't exclusive to those with deep pockets. With determination and the right resources, you can very much complete the process on your own, ensuring your application stands out from the rest. That's where Leafsheets comes into play. This platform offers all the essential operating documents that are pivotal for both your application and the final stamp of license approval. From operational procedures to compliance guidelines, Leafsheets can be your compass in these uncharted waters.
However, there are certain parts of this journey that Leafsheets can't traverse for you. Personal details, ownership dynamics, and the tricky task of scouting the right property for your dispensary are things you'll need to sort out independently. But fret not, for we've got your back there too! If this is your maiden voyage into the world of cannabis licensing, and the mere thought of organizing this mammoth task sends shivers down your spine, our specially curated guide for preparing to apply for a cannabis business is here to help. Moreover, don't forget to check out our indispensable Cannabis Business Startup Checklist, designed to streamline your journey from a dream to a successful dispensary in New York. With the right tools at your disposal and a clear vision, the path ahead might just be a little less intimidating!
When embarking on the journey of opening a dispensary in New York, the first and perhaps most daunting hurdle you'll face is the cannabis license application. Think of it as the state's litmus test to sift through the sea of aspirants, pinning down those whose vision and business acumen are in sync with the state's regulations and goals. At its core, the application is a rigorous vetting tool, designed to assess if you, dear applicant, have a robust and compliant business plan that meets the high standards of the New York cannabis marketplace.
Now, if you're wondering, "Doesn't every state have this?" The answer is yes, but here's the twist. Every state, with its unique socio-economic fabric and regulatory environment, has its own version of this application. And, as anyone familiar with the Big Apple can attest, New York isn't just another state. Its vibrant, bustling business environment means that the stakes here are significantly higher. Acquiring a cannabis license in New York is akin to nabbing a golden ticket – extremely challenging, yet immensely rewarding.
Given the dynamic nature of New York's business scene, expect the application process to be one of the most competitive in the country. It's not just about obtaining the license, but about thriving in a market that demands excellence. So, if you're aiming to jump into these waters, preparation is key. Ensure your application is spotless, reflective of your dedication, and showcases a business plan that's not just profitable, but also responsible. Once you've cleared that hurdle, the real challenge begins: running a dispensary that not only wins customers' hearts but also navigates the intricate web of New York's strict cannabis regulations. So, gear up, dot those i's, cross those t's, and get ready to be a part of New York's green revolution!
Time is of the essence! It is be SUPER important to get your application for a New York adult use dispensary in ASAP. You’ll want to be the first of many, as NY is expecting 50,000 applicants!
Establishing a dispensary in New York comes with certain financial commitments right from the outset. Firstly, all aspiring dispensary owners must submit a non-refundable application fee of $1,000. But that's just the beginning. Once you've passed the application stage and are on the brink of obtaining your license, there are additional costs to consider based on your specific business model. A standard Retail Dispensary License will set you back $7,000. However, if you're looking to operate a Retail Dispensary coupled with a limited retail consumption facility (YES! adding a consumption space to your dispensary is an option!), the licensing fee rises to $10,000. It's crucial to factor in these fees when budgeting for your new venture.
Let's set the stage right off the bat: diving into the dispensary application in New York is no casual weekend project. The amount of paperwork and detail demanded can be, frankly, a little overwhelming. Why the deep dive, you ask? Well, New York is serious about its cannabis game. The state isn't just looking for business-savvy individuals. They're seeking dedicated and responsible entrepreneurs who have the drive, character, and meticulous nature to run a legitimate, successful cannabis dispensary.
As we delve deeper into the intricacies of the application, you'll get a glimpse of the extensive documentation required and the operating plans you'll need to have in place. Now, here's a silver lining: New York doesn’t expect you to lay out every single operating plan detail right at the get-go. Yes, there's a significant amount of information required up front, but it's only after you bag that provisional license that they’ll be expecting the full monty in terms of operating plans.
You might find yourself scrolling through the list, a little voice in your head exclaiming, “This can't be right! They want all this? Talk about overreach!” But before the panic sets in, let us reassure you: they indeed want it all. Every form, every detail, every plan. And the more thorough and clear you can be, the better. It's a rigorous journey, but with dedication and the right guidance, it’s one you can successfully navigate. Let's dive in and break it down together!
Standard Operating Procedures (SOPs) are the backbone of any successful business, and for dispensaries and the wider cannabis industry, they're especially vital. Navigating the complex landscape of regulations, community expectations, and environmental responsibilities necessitates clear, comprehensive SOPs to ensure consistency, compliance, and credibility. While New York acknowledges the extensive nature of SOPs by not mandating their comprehensive submission during the initial phase of the application process, it emphasizes their eventual importance. For the initial application, New York zeroes in on two primary operational policies: the Community Impact Plan and the Energy and Environmental Plan. These procedures not only underscore the state's commitment to responsible and sustainable business practices but also set the stage for the broader SOP framework that dispensaries will be expected to implement as they advance in the licensing process.
Dispensaries in New York are required to develop a comprehensive Community Impact Plan, addressing the historical ramifications of cannabis prohibition on certain communities. This plan should specifically identify which communities or individuals have been disproportionately affected and how the dispensary aims to provide them with tangible benefits. These benefits can range from creating job opportunities and offering educational programs to providing resources tailored for community development. Additionally, the plan must outline the extent of these initiatives by defining the scale or number of beneficiaries targeted. Implementation strategies need to be clarified, detailing the specific actions the dispensary will undertake and how often they'll engage with these communities. Lastly, there's an emphasis on justifying these benefits by illustrating the actual needs of these communities, focusing on their economic and social challenges. To meet these requirements in a Community Impact Plan, a dispensary could partner with local nonprofits to offer job training sessions, hold monthly educational workshops on cannabis health benefits and risks, and work with community leaders to identify areas of greatest need.
The New York of Office of Cannabis Management's stance on cannabis businesses is clear and firm. While the booming cannabis industry presents profitable opportunities, New York mandates that these businesses uphold a responsibility: to give back, especially to communities that have borne the brunt of cannabis prohibition. Community impact isn't just a buzzword. It's a long-term commitment, an earnest attempt to elevate marginalized neighborhoods, bringing genuine changes that uplift and empower them. When we talk about community impact, we aren't merely discussing transient remedies. It's about digging deep, understanding the systemic issues at play, and creating interventions that catalyze long-lasting transformations. The foundation of such change starts with a well-crafted plan. A dispensary keen on making a difference should have a strategy that:
A plan without metrics is a ship without a compass. It's crucial to:
Lastly, the dispensary should present a statement, not just as a mere formality, but as a testament to its genuine commitment. This statement should:
Energy and environment are more important, now, than ever before. Of all cannabis business types, dispensaries have one of the lowest carbon footprints, especially when compared to cultivation and processing facilities. However, dispensaries can still do their part in selecting energy efficient equipment and having environmental plans in place as far as they relate to retailers (dispensaries).
Let's take a journey through the Energy and Environmental Plan required for New York dispensary applicants. As we navigate this terrain, it’s vital to recognize that the underlying theme is sustainability, both for the business and our planet. The energy and environmental plan is expected to meet all of the following requirements:
When you step into a dispensary, imagine not seeing heaps of single-use plastics. The future of packaging in dispensaries is shifting towards sustainability. Applicants must align with the Retail Packaging Sustainability Program. What does this mean? Think of a future where cannabis packaging is either reusable, made from compostable materials, or created from over 25% post-consumer recycled content. But reusing isn't as simple as just refilling containers. Each container needs to be robust, free from imperfections that could jeopardize child-safety, and must be sanitized thoroughly, either by the dispensary or a third party, to ensure no harmful residues linger. And if you see claims about recycled packaging, they should adhere to federal guidelines on environmental marketing.
The technical requirements for this are: "Actions to reduce or eliminate the dispensary’s use of single-use plastics in accordance with the Retail Packaging Sustainability Program."
Chemicals are a part and parcel of many businesses. But what's essential is how we manage them. Dispensary applicants need to detail actions aiming to minimize the use of those chemicals which, if disposed of, would be considered hazardous waste. It's not just about using them but ensuring they don't harm our environment upon disposal.
The technical requirements for this is "a description of actions that will be taken to minimize both the use and disposal of chemicals that are considered hazardous waste when disposed."
Every business, every individual, leaves behind a carbon footprint. But for a dispensary, the focus is on reducing this footprint to the bare minimum. How? By devising a sustainable energy use and conservation plan. This isn't just a fancy term. It encompasses how the dispensary will source and use energy, its energy efficiency goals with clear timelines, and how it will leverage energy efficiency programs. Think of practices like reducing electricity usage or better-insulated buildings, and even harnessing renewable energy sources like solar power.
The technical requirements for this are: Reduction of the dispensary’s carbon footprint, including, but not limited to a sustainable energy use and conservation plan that addresses the sourcing and use of energy, including:
A year in the life of a dispensary sees numerous energy usages. Hence, applicants are expected to submit an annual energy report. This isn't just a list but a benchmarking report, giving a detailed view of their energy consumption patterns and how they align with the standards set by the Office.
The technical requirements for this is: "Submission of an annual energy report which must include energy benchmarking in a manner required by the Office."
Lighting plays a pivotal role in setting the ambiance of a dispensary, but it's also a significant energy consumer. Dispensary plans need to illuminate (pun intended) their lighting choices and the energy implications of those choices. This includes detailing existing lighting, and proving that they've consulted with their local utilities to understand the energy draw and its impact on the local grid.
The technical requirements for this are: All planned lighting and the energy impact of the planned lighting including, but not limited to:
Imagine a dispensary as a living organism that breathes, just like us. And as it breathes, the dispensary has specific needs to ensure its surroundings are kept in harmony with the environment.
Firstly, when it comes to managing humidity, there are certain standards we must adhere to. Think of it as ensuring our dispensary breathes without getting "sweaty". If the product case volumes are 8.0 cubic feet or less, the stand-alone dehumidifiers used must have an integrated energy factor of at least 1.77 L/kWh. On the other hand, for product case volumes greater than 8.0 cubic feet, this factor goes up to a minimum of 2.41 L/kWh. Alternatively, one could use an integrated HVAC system that comes equipped with on-site heat recovery.
Now, just as we are conscious about our carbon footprint, the dispensary needs to be wary of its refrigerant emissions. This means either using HVAC and refrigeration equipment that have an extremely low Global Warming Potential (GWP) or natural refrigerants. Alternatively, having a robust plan in place to manage any refrigerant leaks and ensure proper disposal is essential.
Moreover, keeping the HVAC system in top-notch condition is crucial, not just for efficiency but also to keep any undesirable odors at bay. Every dispensary needs to have a maintenance plan in place. This plan isn't just a simple list; it should detail how the licensee will maintain optimal operation and energy efficiency. Key aspects here include controlling and improving odor and air filtration.
Speaking of odors, any enclosed or potentially enclosable storage space within the dispensary needs to ensure that it doesn't disturb the outside environment. This is where technology steps in. Employing the likes of activated carbon filtration, vapor-phase systems, or other innovations that the Office approves ensures harmony between the inside and outside.
Now, if the dispensary's heating system vents out into the atmosphere and requires a permit or registration from the New York State Department of Environmental Conservation, it's imperative to have that in place before constructing the facility. But what exactly counts as the start of construction? Well, it's not just about clearing the site or excavation. It's about establishing permanence, be it laying underground pipelines, building foundations, or erecting permanent storage structures.
In essence, setting up and running a dispensary is a delicate dance between ensuring business efficiency and maintaining ecological balance. It's not just about serving customers; it's about respecting the environment we all share.
The technical requirements are:
Imagine the world's climate as a sensitive thermostat. Activities like burning fossil fuels release greenhouse gases, turning up the heat. New York has recognized this and, under the Climate Leadership and Community Protections Act (CLCPA), mandates that dispensaries don't crank that thermostat too high. So, if you dream of opening a dispensary, your operation can't interfere with the state's broader goal to limit these emissions.
On the roads, dispensaries also play their part. If they deliver, they need to plan how they'll cut down on those fossil fuel emissions. Think of it like plotting a diet for cars. Dispensaries should know:
The technical requirements for this are: A plan for reducing greenhouse gas emissions and reliance on fossil fuels, including, but not limited to:
Water, our most precious resource. Dispensaries are required to think about every drop they use. Their plans must outline where their water comes from, ensure its quality, and detail how it's used. It's akin to setting a water budget, ensuring not a drop goes to waste.
The technical requirement for this is: "Water conservation and use, including, but not limited to a sustainable water-use and conservation plan that addresses water sources, quality, and use."
Every business produces waste, but it's what they do with it that counts. Dispensaries need a blueprint for trash, emphasizing the 3 R's: Reduce, Reuse, and Recycle. Their plan would outline:
The technical requirements for this are: Waste management, recycling and disposal, including, but not limited to:
A plan without a means of measuring its effectiveness is like a ship without a compass. Dispensaries must elucidate how they'll track their environmental performance. This involves setting both qualitative (descriptive) and quantitative (numeric) metrics, and detailing how often they'll review them. Imagine this as a regular health check-up for the dispensary's environmental practices, ensuring they're on track and making the necessary adjustments when they aren't.
The technical requirement for this section is: "A description of the dispensary’s strategy to measure, track, and record the dispensary’s performance and execution of the plan that identifies qualitative and quantitative metrics, and includes frequency of tracking such metrics."
Diving into the world of cannabis entrepreneurship in New York is not just about securing a license; it's about showcasing a profound understanding and preparedness for the intricacies of the industry. The state's rigorous application process is designed to sift through aspirants, ensuring that only the most dedicated and informed minds set up shop. A pivotal component of this process is the submission of detailed plans, elucidating the functionality and resilience of your proposed business. These plans will serve as the linchpin of your application, offering a window into your operational strategy, financial prowess, and crisis preparedness. While the journey of opening a dispensary in New York is filled with excitement, it's also punctuated with responsibility. By ensuring you have both a comprehensive business plan and a forward-thinking business continuity plan, you're not just ticking off application requirements; you're laying the foundation for a resilient and successful cannabis venture. Let's explore the essence and requirements of these vital documents.
At the heart of any successful venture is a thorough and well-structured business plan. For aspiring dispensary owners in New York, presenting a robust business plan is more than just a formality; it's a testament to your commitment, foresight, and readiness to operate in the cannabis market.
A business plan is essentially the blueprint of your enterprise. It provides a clear overview of what your business is about, how it will operate, the strategies you'll employ, and your financial projections.
Specifically, for dispensary applicants, the business plan should detail:
While a business plan paints the picture of your dispensary's future, a business continuity plan (BCP) is all about preparedness. It's your game plan for unexpected disruptions, ensuring that your business remains operational during unforeseen challenges, be it natural disasters, regulatory changes, or supply chain interruptions.
New York envisions its cannabis dispensaries as thriving entities, understanding that the financial success of licensed establishments correlates directly with the state's revenues. It's imperative, therefore, for applicants to elucidate how their dispensary intends to navigate the unpredictable tides of business, including ownership transitions and unforeseen challenges like insolvency.
Navigating the world of cannabis business can sometimes feel like you’re diving into a maze, and New York's Office of Cannabis Management (OCM) certainly wants to know every twist and turn of your dispensary journey. When you're gearing up to stake your claim in the cannabis industry, it's crucial to understand that transparency isn’t just encouraged, it's mandatory.
The OCM will present an official form designed to delve deep into the makeup of your dispensary business. It's not just about knowing who's steering the ship, but also about identifying every member of the crew and understanding their roles and stakes.
In a nutshell, the Office of Cannabis Management (OCM) wants to ensure that New York's budding cannabis industry is built on a foundation of transparency, integrity, and compliance. So, while the form might seem exhaustive, it's designed with the state's best interests at heart. Taking the time to fill it out thoroughly and accurately can save a lot of potential headaches down the road. And remember, in the world of business – especially one as regulated as cannabis – knowledge, preparation, and transparency are key! Here's a more detailed view of what information they'll want to see:
For an LLC, corporation, partnership, trust, or estate the following information will have to be provided for each company that’s involved in the dispensary ownership and/or financing:
For every person involved in any way shape or form in the ownership of any company that is involved in the dispensary ownership or financing, this information will be required:
New York regulators have been very clear that they will be paying close attention to the ownership and financing of dispensaries. This is because they don’t want any funny business. They don’t want people holding ownership in more dispensaries than is allowed, using financing from questionable sources, or having large multi-state operators secretly controlling smaller companies. Don’t panic. YOU are prepared and starting early so you have time to get all this information together.
We generated the below application guide using the regulations, so you can utilize it as a checklist as you prepare for the release of the official regulations and official application process.
Make an organizational chart that clearly displays the structure of the business in visual form and includes the names of all individuals and entities involved in the ownership of the dispensary. Include any entity or individual who will be involved in control, decision making or management of the dispensary, or its assets. This should include the name, ownership status (decision making, control, and/or management), and ownership percentages of:
A list of any individuals or companies (and the individuals involved in the companies) with any interest in the dispensary ownership or financing, including:
The regulators want to know the history of every entity and individual involved in the dispensary ownership or financing of the dispensary to determine the legitimacy of the company. The regulation says that the applicant will have to disclose (and therefore likely provide supporting documentation) for:
You’ll need to describe all ownership changes that occur between the time of the original application and the time of submission of the application. It was a bit confusing because it seems like the “original application” would be the submitted application. That’s clearly not what they mean. We have interpreted this requirement to mean that the state wants to know ANY and ALL ownership changes that have occurred from the moment you started preparing the application, to the point that the application is submitted.
This description should be in narrative form and include information about events that have occurred since the start of the application. To provide this description accurately, we suggest recording everything that happens throughout the application process, so you won’t have to create a description from memory and risk it being inaccurate. The types of events to be included in the description include:
The capitalization tables must include anyone with interest in the dispensary that exceeds 10%. This includes any person or entity involved in the dispensary with interest in current or future earnings of the dispensary.
Passive investors are not included in this requirement. A passive investor is someone who owns less than 5% of shares of a publicly traded company, or a person who has no control in a privately owned dispensary and holds less than 20% of the shares of the company. If a person has an agreement in place that will result in their ownership exceeding the set 20% limit in the future, they are no longer considered a passive investor and will need to be included in the capitalization table.
“A basic capitalization table lists out each type of equity ownership capital, the individual investors, and the share prices. A more complex table may also include details on potential new funding sources, mergers and acquisitions, public offerings, or other hypothetical transactions.” - Investopedia
Here you’ll have to provide documents that relate to the ownership structure of the dispensary, including all holding companies, parent companies, affiliates, and subsidiaries.
The regulations don’t specify what documents are needed for this section. Some documents that many suffice for this requirement include:
Financial statements and taxation documents for the most recent year of the entity that is applying for dispensary licensure.
If the entity that is applying for the dispensary license was recently formed and does not have much information related to it for the past year, still provide:
Here they want copies of every document related to the business ranging from state registrations to contracts. “Every” means that copies of these document types must be provided:
Duties and promises of the dispensary are super important in showing the state what the company structure is and what types of indebtedness the company has. The regulators don’t want there to be any secret agreements, so the best thing to do is to disclose absolutely everything. A lot of people like to find ways to circumvent the rules by following the rules on paper and then having side agreements off record. Don’t be one of these people.
Provide copies of any proposed or executed contracts, term sheets, agreements, and side letters, between the dispensary and anyone involved in the dispensary ownership, financing, control, or good and services providing that relate to:
Why would the state give a dispensary license to a company that isn’t in good standing? They wouldn’t. You’ll need to provide a certificate of good standing or status from the state where the business was formed, and if the business was formed in a state other than New York, you will have to provide a certificate of authority to do business in New York from the New York Department of State.
Does anyone involved in the dispensary already own cannabis businesses elsewhere? Here, you’ll show the state any other cannabis business experience that you and your team of investors and/or owners currently have. This will include a description of cannabis licensing in other states. States have so many different names for their cannabis business types that it can be difficult to track. If you have a cannabis license in a state that uses any different naming than that listed below, don’t use that as an excuse to not provide the information. WHATEVER officially state licensed cannabis business anyone involved in the dispensary application holds – provide the info. This info will include any or all the following:
1. Copies of any existing cannabis business state and/or jurisdictional licenses for:
2. A statement granting NY regulators permission to contact the regulatory authorities in the states where cannabis business licenses are held.
3. If the following have not occurred, then provide a statement that the entity or individual involved in the dispensary application who holds the cannabis business license(s) in other states was never sanctioned (never got in trouble). If the following have occurred, then provide documentation relating to the event(s):
It’s easy for anyone to put together a community engagement plan or diversity plan and say that they’ll practice business in a way that’s equitable and considers the well-being of disadvantaged groups. However, in the history of cannabis business licensing, those claims have been proven to be a bunch of lip service without any follow through. A great indicator for future performance is past performance, and New York will be considering the past business practices of dispensary applicants.
The wants to know a dispensary applicant’s history in creating or managing an equitable workplace environment, and will review previous business and management practices including:
A key component in operating a diverse workplace is providing services to help out employees who need support. The dispensary application will require the dispensary applicant’s history in creating or delivering culturally and linguistically competent services to diverse and underserved populations, including:
The application wants you to brag about all community leadership wins. Provide information about community leadership roles held by any individual related to ownership in the dispensary application including serving in community leadership roles within established and licensed:
The Office of Cannabis Management emphasizes transparency in understanding the affiliations of an applicant's business and its ownership team. While certain affiliations, like unions, are mandatory, the Office also values associations with charitable organizations and other community-centric groups. This approach ensures not only regulatory compliance but also fosters community engagement and trust within the burgeoning cannabis industry in New York.
Nothing says “conflict of interest” quite like an undisclosed relationship or agreement between an applicant and anyone involved with the regulatory body that decides who does and does not get a dispensary license! If your dispensary or any company or individual involved in the dispensary has any type of relationship, agreement, or arrangement with any official or employee of the Office of Cannabis Management, Cannabis Control Board, or any other entity or individual that plays a part in dispensary licensing review and decision making – disclose it and provide any documentation related to such a situation.
Has your dispensary entity been charitable lately? Provide information about any charitable contributions made by the entity that you’re using to apply for the dispensary license, in the past FIVE years. Hopefully you kept those donation receipts!
In case the state will accept charitable donation information from individuals involved in the dispensary, we suggest collecting that documentation as well.
New York is a big believer in unions. A Labor Peace Agreement signed with the dispensary entity and a bona fide labor organization is required, along with a statement stating that the dispensary entity understands that they may be required to maintain that labor peace agreement for the long term to maintain their dispensary licensure. Are you wondering HOW in the world you’re supposed to figure out what union to contact? We’ve got your back. Contact UFCW.
This part usually makes people uncomfortable if they have any kind of record from their past. This type of information is par for the course in cannabis business licensing across the U.S. because states want to know these types of things before issuing privileged licenses for a high-risk industry such as cannabis. New York wants the following criminal and legal history information for the dispensary entity and any person or company with interest in the dispensary.
Everyone involved in the dispensary application will have to get fingerprinted for a criminal history background check. There will likely be both a state level and federal criminal background check conducted, and the Office of Cannabis Management will provide direction for how to do so properly. As simple as this step may sound, ownership teams get flustered with this step quite often. Take it seriously and keep in contact with everyone included in the application to make sure they get their fingerprints done accurately and in time.
In case you haven’t already had to gather enough information about legal issues, the regulators want to know basically every legal action there is to tell them about, whether civil, criminal, or administrative. Start collecting your documents if the dispensary or any person or company involved in the dispensary has any legal action, either pending or past. You’ll have to provide information and a description about each one of the following:
“Good Moral Character” is one of our favorite requirements in cannabis business applications because, who really is to say definitively how to best measure good moral character? In this case, the Office of Cannabis Management in New York has that power. To show evidence of good moral character, a dispensary applicant must provide the dispensary applicant’s (everyone involved):
The application will require information about past troubles with federal agencies. Again, honesty is the best policy. The information required includes whether any individual or entity involved in the dispensary:
The state wants to know if there have been any business troubles in the past. Honesty is the best policy here. If any entity or individual involved in the dispensary license has had any administrative action or governmental proceeding in the past TEN years, you’ll need to provide a description of the proceedings including jurisdiction, state, reason, action taken, etc. Administrative proceedings or governmental agency action that must be described in detail includes:
As you prepare to apply for a cannabis license, it’s essential to understand what the Office of Cannabis Management will look out for to ensure your application sails through without a hitch. Remember, the goal is to demonstrate trustworthiness, transparency, and commitment to legal and quality operations. Here's a comprehensive guide on the pitfalls you should avoid:
With a combination of compliance and best practices, you can position your dispensary for lasting success in New York's vibrant cannabis landscape. Navigating the cannabis industry in New York requires not just passion and drive, but a thorough understanding of the rules, regulations, and nuances of operating a dispensary. Below, we break down the key elements to ensure you not only meet the state's requirements but also differentiate yourself in this dynamic marketplace.
Obtaining a license to operate a dispensary in New York is only the beginning of the journey for entrepreneurs in the cannabis industry. Once licensed, it's imperative to remain in strict compliance with all state regulations, which are multifaceted and extensive. This includes stringent security measures, meticulous inventory tracking, comprehensive training, and detailed record-keeping. Additionally, as a dispensary owner in New York you will be expected to do the following in order to be eligible for license renewal after the 2 year period, it is also worth noting that the Board retains the discretion to introduce other criteria for renewal denials, so continuous vigilance and adaptability are key to ensuring sustained success in the sector:
In the rapidly evolving landscape of the New York cannabis industry, setting up a dispensary requires a blend of passion, knowledge, and meticulous attention to regulatory details. Navigating the intricacies of the application process and the multitude of requirements is no small feat, but with determination and the right resources, it's an endeavor that promises both social impact and business growth. As the final note in your journey through this guide, remember: success in this industry demands more than just a vision—it demands a plan. To ensure you're well-equipped and prepared, dive into Leafsheets' comprehensive dispensary documents. These curated resources are tailored specifically for the New York dispensary application and startup process, offering a roadmap to turn your cannabis business aspirations into a flourishing reality. Start your dispensary journey on the right foot—explore Leafsheets today!
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Employee Agreements, Forms, and Handbook
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Leafsheets is revolutionizing the cannabis business landscape, making your entrepreneurial dreams more accessible than ever. We're your go-to platform for breaking down barriers and soaring to success in the cannabis world, offering essential operating plans, insider business insights, and answers to all your burning questions. Dive into Leafsheets and fast-track your venture! Just remember, while we're seasoned in business advice, legal queries are best left to licensed professionals in your state. For legal insights, always consult with an accredited legal expert.
