New York Governor Announces ‘Seeding Opportunity Initiative’ to Promote Social Equity in State’s Adult-Use Cannabis Market

New York grabbed national headlines when state officials announced March 9 that they will issue the state’s first adult-use cannabis dispensary licenses to applicants with cannabis-related convictions.

The following day, Gov. Kathy Hochul provided more details on the state’s plans to prioritize those most impacted by the war on drugs in the adult-use cannabis licensing process.

In a March 10 announcement, Hochul unveiled the “Seeding Opportunity Initiative,” which aims to “position individuals with prior cannabis-related criminal offenses to make the first adult-use cannabis sales with products grown by New York farmers,” according to a press release from her office.

The plan will allow the state to launch adult-use sales before the end of the year, the press release said, while ensuring support for social equity applicants and investing in the communities most disproportionately impacted by the enforcement of cannabis prohibition.

“New York State is making history, launching a first-of-its-kind approach to the cannabis industry that takes a major step forward in righting the wrongs of the past,” Hochul said in a public statement. “The regulations advanced by the Cannabis Control Board today will prioritize local farmers and entrepreneurs, creating jobs and opportunity for communities that have been left out and left behind. I'm proud New York will be a national model for the safe, equitable and inclusive industry we are now building.”

The state’s Cannabis Control Board (CCB) advanced two key components of the just-announced Seeding Opportunity Initiative at its March 10 meeting, according to the press release.

First, the board submitted its proposed regulations for Conditional Adult-Use Retail Dispensary licenses for public comment. As part of New York’s Seeding Opportunity Initiative, this classification of retail licenses must be granted to social equity applicants who have prior cannabis-related criminal offenses and who also have a background in owning and operating a small business.

These licensees will be the first to open their doors to sell adult-use cannabis in the state.

The second order of business at the CCB’s meeting this week was approving a license application process for hemp farmers seeking to grow adult-use cannabis this spring. These licenses, called Adult-Use Conditional Cultivator Licenses, were authorized by legislation that Hochul signed into law last month to allow New York’s existing hemp operators to initially supply the state’s adult-use market.

RELATED: Inside New York’s Legislation to Allow Hemp Farmers to Grow Cannabis for the State’s Adult-Use Market

The CCB has set March 15 as the opening date for the application portal for the Adult-Use Conditional Cultivator Licenses.

“Our state’s cannabis law sets a high goal for creating an equitable industry that puts New Yorkers first,” CCB Chair Tremaine Wright said in a public statement. “The Seeding Opportunity Initiative puts us on a path for achieving that goal and hopefully models a way forward for reaching those goals while building a stable market. I am thankful for the support of Gov. Hochul and the Legislature, which made it possible for us to get this initiative off the ground quickly, establish a supply chain from our farmers to equity, retailers, and generate the resources to help revitalize communities that were harmed by the disproportionate enforcement of cannabis prohibition.”

The Seeding Opportunity Initiative is made up of three programs, according to the announcement from Hochul’s office.

The Equity Owners Lead Program provides Conditional Adult-Use Retail Dispensary Licenses to eligible social equity applicants. The application process will open in this summer, with the first licenses awarded in late summer or early fall.

Applicants must meet the following criteria to qualify for a Conditional Adult-Use Retail Dispensary license, according to the press release:

• Have a cannabis-related offense that occurred prior to the passage of the Marijuana Regulation and Tax Act (MRTA) on March 31, 2021 , or had a parent, guardian, child, spouse, or dependent with a pre-MRTA cannabis offense in the State of New York.  
• Have experience owning and operating a qualifying business in the State of New York.

The regulations governing the application process, which have been submitted for public comment, include information about what application materials are required to apply for a Conditional Adult-Use Retail Dispensary License and sets guidelines for how the New York Office of Cannabis Management (OCM) will review and evaluate the applications.

A separate forthcoming package of regulations will outline the requirements for operating a dispensary under this license type, according to the press release.

The second program in the Seeding Opportunity Initiative, the Farmers First Program, is the one that will provide Adult-Use Conditional Cultivator Licenses to New York’s hemp farmers, allowing them to grow cannabis for the adult-use market during the 2022 growing season.

Farmers who ultimately receive an Adult-Use Conditional Cultivator License must participate in sustainability and equity mentorship programs that aim to help build the first generation of social equity cannabis business operators across the supply chain.

Finally, the Seeding Opportunity Initiative proposes the New York Social Equity Cannabis Investment Program. Hochul previously announced a $200 million fund meant to support the state’s social equity cannabis businesses; this program would direct industry licensing fees and private equity to support the development of social equity dispensaries.

The Dormitory Authority of the State of New York (DASNY) would provide support through its leasing and construction services to help retailers locate “at prime locations,” according to the press release from Hochul’s office. DASNY services would also help dispensary operators renovate these locations to meet health, safety and security requirements.

The New York Social Equity Cannabis Investment Program is currently under discussion with the New York Legislature, according to the press release.

“The Seeding Opportunity Initiative truly sets New York’s program apart from other states that have legalized adult-use, by starting out of the gate with an equity- and sustainability-led program that will supply equity entrepreneur-owned dispensaries with sun-grown cannabis products,” said CCB member Jen Metzger in a public statement. “It is a great start to building a new industry in which small businesses can thrive and generational wealth can be created."