Gov. Kathy Hochul signed legislation Monday that will allow state-licensed hemp growers to apply for provisional licenses to begin cultivating recreational marijuana.
The legislation created a Conditional Adult-use Cannabis Cultivator license, and existing hemp growers that receive one would be able to cultivate up to an acre of marijuana plants outdoors or 25,000 square feet in a greenhouse, with no more than 20 lights. The two-year licenses will also allow the growers to distribute cannabis until June 1, 2023.
New York’s legal recreational marijuana market is expected to be one of the nation’s largest once it is up and running.
The new law allowing hemp growers to apply for a marijuana license throws a welcome lifeline to hemp farmers, who have seen prices tumble nationwide since a peak in 2019, shortly after Congress legalized the plant. Factors in the price collapse include oversupply and regulatory uncertainty surrounding CBD, a popular, non-intoxicating chemical derived from hemp.
“So the opportunity to grow another crop that’s profitable is certainly something that’s welcome,” said Jonathan Miller, general counsel for the U.S. Hemp Roundtable, an industry group.
At the same time, the group is wary of blurring lines between marijuana and hemp,which gained Congress’ approval as a substance that doesn’t get people high.
“This is a temporary, conditional program, and we want to see how things go, but we want to make sure that in the long run, those boundaries are kept
separate,” Miller said.
Zach Sarkis, founder of NY Hemp Lab and FLWR CITY Collective who grows hemp and CBD bud at Growing Family Farm, sees the license as a major opportunity.
Sarkis said Monday that he plans to apply for a provisional license and begin growing.
“We’ve been working pretty tirelessly to dial in our processes and quality control to make sure that we’re bringing high quality cannabis products to the market, and that’s just CBD,” he said. “So really, we have all of the infrastructure and everything we need to be able to play in full-spectrum cannabis.”
License holders will be required to participate in a social equity program, under which they’d train minorities and women who want to enter the cannabis industry.
Hochul, in a statement, said the provisional license would give small growers a leg up in the industry as recreational dispensaries open, though that milestone is still a ways away.
"I am proud to sign this bill, which positions New York's farmers to be the first to grow cannabis and jumpstart the safe, equitable and inclusive new industry we are building," Hochul said. "New York State will continue to lead the way in delivering on our commitment to bring economic opportunity and growth to every New Yorker in every corner of our great state."
While New York legalized recreational marijuana in March 2021, it’s still unclear when exactly legal dispensaries will begin operating in the state.
Tremaine Wright, chair of the state’s Cannabis Control Board, said in October that the Office of Cannabis Management estimated it would be 18 months before cannabis dispensaries open — that means the first licensed shop would open its doors in spring 2023.
“This law places New York's farmers first in line to grow cannabis, the timing of which is critical to our efforts to roll out the adult use program,” Wright said, in a statement. “With this bill, we're continuing to put equity and inclusion at the forefront of the new cannabis industry we're building."
Sarkis, like many in the fledgling world of weed in New York, has been concerned that when the industry hits its stride, it will be dominated by large corporate interests. He said licenses like this ensure healthier competition for small producers in the market.
“It’s really huge, it means jobs, it means economic opportunity for these small businesses that have been struggling to operate for the past few years in the hemp space,” he said.
