Conditional Adult-Use Retail Dispensary (CAURD) Cannabis License
The recently established Office of Cannabis Management published the criteria to apply for Conditional Adult-Use Retail Dispensary (CAURD) Licenses, thus opening the doors to the first cannabis legal sales in New York in the next few months. CAURD Licenses will be limited to “justice-involved” individuals, who is someone who was convicted, or had a parent/child/spouse who was convicted, of a marihuana-related offense in New York State before March 31, 2021.
Applicants can choose to apply under either of the following two criteria:
A - Business Criteria: at least 30% of the applying entity has to be owned by someone who:
is a “justice-involved” individual;
has a “qualifying business experience”, which is considered satisfied when the individual owns and at least 10% of the company and has a net profit for two (2) of the years while in operation;
had control of the qualifying business (see above) in the past and will have control of the applying entity. For purposes of the CAURD License, “control” means being in charge of activities such as approving the budget and hiring personnel;
has a “significant presence” in New York State. To this effect, the individual will have to show that they have a legal residence and have assets and bank account(s) in New York State.
B - Nonprofit Criteria: at least 30% of the applying entity has to be owned by a nonprofit organization that has:
A history of creating opportunities for or serving incarcerated individuals;
At least one “justice-involved” board member or officer;
At least five full-time employees;
Operated a “social enterprise” (a business serving customers) that had net assets or profit for at least two (2) years;
Control of the applying entity;
Significant presence in New York State.
Although CAURD applicants are getting preemption rights, other retail dispensary permits will be open in the near future. Similarly to the three-tier system for distributing alcoholic beverages, the new regulations established a two-tier cannabis market that prohibits retailers from having an interest in any cannabis cultivation or distribution business. Also, a CAURD license shall be tied to a specific retail location.
The documentation required in the application includes evidence regarding the marijuana offense, financial documents concerning the qualifying business, and a business plan outlining the future activities. Approved applications will be granted a dispensary license in one of the fourteen geographic regions of New York State. Although a preference regarding the geographic area can be indicated, applicants shall not be allowed to choose the specific location. Upon assignment of a location, an applicant shall not be allowed to change it during an initial four (4) year period. Local municipalities shall be allowed to opt out of allowing cannabis use. Therefore, applicants should keep in mind that their preferred municipality might not be available.
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