New York cannabis regulators have awarded the first 15 conditional adult-use processor licenses, a crucial step toward bringing the state’s cannabis market online. The announcement came during an Office of Cannabis Management (OCM) meeting in which Cannabis Control Board members also appointed a director of policy and discussed the adult-use cannabis retail licensing applications, which will open next week.

OCM Executive Director Chris Alexander said the processor licenses authorize licensees to take plant material grown by New York farmers and convert it into cannabis products like edibles, tinctures, and vape cartridges.

“The conditional classes licenses that will be advanced with your approval today play an important link in the Seeding Opportunity Initiative between New York small farmers who are currently growing adult-use cannabis and the business owners with a cannabis conviction or their family members who will set up the adult-use retail dispensaries later this year,” Alexander said.

The Seeding Opportunity Initiative, announced by Gov. Kathy Hochul in March 2022, aims to ensure individuals with past cannabis-related criminal offenses can participate in the state’s new industry. Two components of the initiative include prioritizing individuals with convictions and their families for adult-use retail licenses and allowing existing hemp farmers in New York state to cultivate adult-use cannabis.

Applications for adult-use cannabis retail licenses will open on Aug. 25. The board announced that change following the appointment of Social Equity Impact Ventures to oversee a $200 million social equity investment fund. Social Equity Impact Ventures is a Black-led investment team including Suzanne Shank, former New York City Comptroller William Thompson, and NBA Hall of Famer Chris Webber.

“Under their leadership, the initial plans are being developed to support the rollout of New York State conditional adult-use retail dispensary market, which we anticipate opening later this year,” Cannabis Control Board Chair Tremaine Wright said during the meeting.

The first licenses to operate adult-use retail dispensaries are intended to be awarded to individuals who have been hardest hit by punitive drug laws. In order to qualify, applicants must have a marijuana-related offense conviction prior to the passage of New York’s Marijuana Regulation and Taxation Act in March 2021, or have a close family member with an offense. They must also have experience owning and operating a qualifying business. 

The application window for adult-use retail licenses will close on Sept. 26.

Some activists have praised New York’s efforts to include communities that punitive drug laws have disproportionately harmed in what is expected to be a multibillion-dollar industry. But the measures have mixed support among New Yorkers. According to a March survey from Siena College, just 33 percent of New Yorkers support giving individuals with convictions first crack at dispensary licenses, while 54 percent oppose it, Marijuana Moment reported. 

Testing laboratories are also vital to the developing industry. The board approved emergency laboratory regulations that Wright said: “will not only allow for us to establish a testing procedure for cannabis products, it will allow us to immediately open the application window for new cannabis testing labs.” The board also approved 19 additional adult-use cannabis cultivation licenses, bringing the total of New York farms licensed to grow adult-use cannabis to 242. 

Finally, John Kagia was appointed as director of policy, a role that Alexander said will shape and oversee the industry. Kagia previously served as chief knowledge officer at cannabis data analytics firm New Frontier Data.

“What I see in this candidate that made him stand out, and would result in this recommendation, is somebody who understands where New York's market will be in the larger landscape of the cannabis industry and the opportunity that we have here to build a model market,” Alexander said.

The New York legislature approved adult-use cannabis legalization in March 2021. Despite months of setbacks under the leadership of former Gov. Andrew Cuomo, regulators maintain that adult-use cannabis sales are on track to kick off in New York before the close of 2022.