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Jeffrey Hoffman is a New York City-based attorney who hosts “Ask Me Anything about Cannabis Legalization in New York” each week on LinkedIn. Hoffman and NY Cannabis Insider have partnered to bring those sessions into print in a Q&A format.

Hoffman’s practice focuses on cannabis industry clients, including licensees in the adult-use market, practitioners in the medical cannabis space, and cannabis adjacent product and service providers. He has a particular interest in social and economic equity cannabis license applicants, and he also informs and assists those convicted of cannabis offenses in getting such convictions expunged from their record. He can be reached at info@420jurist.com

The following AMA from July 27 has been edited for length and clarity. Hoffman’s next AMA is on Aug. 3 at 4:20 p.m.

For those of you familiar with how the alcohol rules work in New York State, as far as sitings go with schools and places of worship, they are very similar to what has been enacted in the MRTA – the law that legalized cannabis in New York. In that law, the legislature has determined that the retail cannabis stores, like dispensaries and onsite consumption lounges, must locate themselves at least 500 feet from a school, and 200 feet from a house of worship.

When it comes to how it will be measured, those of you familiar with the alcohol rules may know that it has to do with the establishments being on the same street. That is particular to the alcohol rule and that language did not appear in the MRTA. So you would basically come to the entrance of one [establishment], go along the street to the entrance of the other [establishment], and that’s how it will be measured. That is for alcohol.

Now as we mentioned, it is 500 feet for schools and 200 feet for houses of worship. Unfortunately, even though the application will probably be opened for the conditional adult-use retail dispensary (CAURD) licenses at some point in August, the licensees will have to follow the same rules. The Cannabis Control Board, more specifically the OCM, has to put a two-week notice before the date of the application opening.

These rules have not been fully fleshed out by the Cannabis Control Board yet. We are still waiting for the initial proposed regulations for the nine standard licenses, which will be issued here in New York, and any of the CAURD licensees will have to follow any of the rules in the regulations for the normal dispensaries. The fact that they’re going to be DASNY spaces, we do not have any more specificity with exactly how the measurement is going to occur. Will it be a walk along the sidewalk measurement, or simply a straight line between the facilities? Will it be from the property border or from the entrance? Again, none of this information appeared in the MRTA, so therefore we don’t know.

I do anticipate that we will see information specific to that in the regulations that will be forthcoming, but until we see those regulations, we don’t know. I know a lot of applicants are waiting to see those measurement requirements, but until we see those initial regulations from the Cannabis Control Board, we simply don’t know. So keep waiting and watching the OCM website, and at some point, they will release that regulation.

It appears we’re getting various responses to that from the OCM and the CCB. It is very clear, despite what has been said elsewhere, that the regulation that is now official and has been promulgated, that if DASNY or the fund wants you in a space, you must go there. It says very specifically in the regulation that the licensee must sign an agreement and meet the requirements of that agreement from any fund. The fund is basically what DASNY is going to use to build the spaces, so that is applicable. And it says that a licensee must sign any agreement including but not limited to a lease for one of the DASNY spaces. And again, in one of the facts listed on the OCM website, if you’re interested in having your own location, a DASNY space is probably not right for you, which means that all of the DASNY licensees will have to go in the DASNY locations.

However, and there’s been a great discussion between myself and a few other lawyers, in the documentation that you can see on the OCM website, there is a place where they can review all of the comments they got for the CAURD license, as well as any responses. One of the comments said, “You guys should not require folks to go into the DASNY spaces.” And the agency said that it is not required to go into one of these spaces, and you may be able to use a private space.

So, very different guidance. I had a person weigh in in the comments, that they went to one of the outreach events that the OCM was doing, and they were told at the event that if you apply for a CAURD license and you get it, you should plan to be in the DASNY space. In my book, we have three pieces of evidence that say one must use a DASNY space, but then there’s the outlier saying that it is not required. So, this is a mess.

We definitely have different authoritative things saying this. In going back and forth with a fellow attorney, it’s in his opinion that you can go into other spaces that aren’t the DASNY spaces. I know that Brad Racino from NY Cannabis Insider has reached out to the OCM on the record about this issue, so I think let’s wait and see what NY Cannabis Insider publishes after reaching out.

Again, it is very clear to me and other attorneys that the regulation that was approved and is now in effect does make it fairly clear that if the fund wants you in a DASNY space, you have to be in it.

Even if you’re self funded, the regulation makes it very clear in the black letter of the regulation; If the fund wants you in a DASNY space, you have to be in there. But again, this response to the comment that they posted on the OCM website seems to say something else. So there’s clearly confusion here. And hopefully, we will get some really clear guidance from the OCM here because there’s definitely confusion. And if they’re going to open up the license here soon, we definitely need extreme clarity on this item.

You need to review what the application is going to look like for the CAURD license. We do know exactly what the application is going to look like. So, you need to make sure you have your ducks in a row to answer the application. You need to make sure that you have your ducks in a row as far as the other service providers you’ll need, such as an attorney and accountant, maybe a real estate person if you’re going to get an on-site dispensary, or on-site consumption lounge. You need to be thinking about your product mix, you need to be creating your business plan. It is not an initial part, it doesn’t look like the CAURD license, but for the following licenses, you’ll need to come up with your sustainability plan, your plan about how you’re going to assist communities disproportionately impacted by cannabis, and just all of the other types of things that you may need to have to apply for a license in New York.

Related: Tips from NY cannabis industry experts on setting up your legal weed business

We will know much more about that when the CCB releases the draft regulations for each of these licenses. I think within that you will also see their draft proposed application. So that’s what you need to do to proceed through the process to apply for a license and attempt to get one. Something that you also want to make sure is true for you and anyone you’re going to list on the application, you want to do a background check. You want to make sure nobody’s got any unpaid taxes, or no filings for taxes; you want to make sure that there are no outstanding warrants that you don’t have, any child support, or any other types of things that ding you. So just really make sure that your record and anyone that you’re going to list on the application is clean, and that you’ve got no outstanding fines or payments. You just want to be as clean as possible when you apply for that application.

First of all, if you are growing full-THC adult-use cannabis in the Carolinas, I think you’re going to get arrested because the Carolinas have not legalized cannabis yet. They’ve only legalized hemp. There is a bill in the legislature for North Carolina, and I’m talking with several folks about that in North Carolina, which happens to be one of the other states I’m licensed in. So to grow adult-use cannabis, adult-use cannabis would have to be legal in the Carolinas, which it is not. So the premise of the question is just a little off, so let’s substitute Massachusetts for the Carolinas. And no, you would not be able to grow cannabis in Massachusetts and then supply to New York.

Currently, the MRTA here in New York says that all of the cannabis that is going to end up in retail dispensaries or in on-site consumption lounges, or getting delivered by the delivery licensees, must be grown and processed here in the state of New York. That is a state law. We can argue about interstate commerce clause all you want. But we don’t even have to do that. Because state law here in New York says all of the cannabis in the adult-use cannabis industry must have been grown and processed and distributed here in the state of New York. So you can’t grow it in the Carolinas. Although like I said, I think your bigger problem is going to be getting arrested in the Carolinas for doing that.

They do fall under the 500 foot rule and the 200 foot rule that we discussed earlier, where the lounge can’t be within 500 feet of a school or 200 feet of a house of worship. The on-site consumption lounges are going to have to notify an entity that is in the locality where you wish to open the on-site consumption lounge here in New York City. That entity is going to be the community board in each region in New York City.

I live on the Upper West Side of Manhattan and for us, the community board is community board seven, and clients of mine that are going to look to apply for any of those licenses will have to appear before the community board and present their plan and what they’re looking to do. This is exactly similar to what you would have to do to apply for a liquor license here in New York: you have to go in front of the community board where you are going to locate the business and present to them your business plan. Now, that community board does not have an up and down vote about your license. What they do – much like with the liquor license – is they will put in a letter to the Cannabis Control Board with your application letting the Cannabis Control Board know what they think about your application, and whether or not they approve of you getting it. Again, that is not dispositive.

Related: New York’s cannabusiness: The onsite fright

Related: New conditional permit proposed for cannabis dispensaries to add consumption

It is completely up to Tremaine Wright and the Cannabis Control Board to decide whether or not you get your license. Now, I’ve seen Ms. Wright speak about this matter a number of times. And she has made it very clear that in order for the CCB to not approve your license application, as per whatever they get from the community board or whatever the entity will be, it’s not good enough for you to simply say we don’t want a cannabis dispensary or a cannabis on-site consumption lounge in our community board. If that is the only reason that the community board gives for being opposed to your application, then Wright is going to get out her big stamp and stamp your application approved, at least as far as what the community board has to say.

Legitimate reasons for the community board to be opposed to your application are things such as the applicant also owns a bar in the neighborhood and they never close their garden at the right time and have people in the garden way past the curfew. For people being in outdoor spaces for bars in New York City, they always get noise complaints at the bar. They’ve got many, many outstanding violations with the State Liquor Authority, they’ve got violations with the tax authority related to the filing of their taxes. So those are legitimate reasons for the community board being opposed to a dispensary or on-site consumption lounge application.

And those would be reasons that the Cannabis Control Board would definitely take into consideration as to whether or not they should not approve your license. Several other things: you won’t be able to have alcohol served at these locations and you won’t be able to have simulation at these locations. And what simulation is in New York, it’s effectively what happens at strip clubs. So those types of activities will not be able to happen. There’s a few other things in MRTA related to what the onsite consumption lounges will or won’t be able to do, I’m not going to go into all of them, but I would encourage you to look at MRTA because it’s very specific.

For those of you who may not know, the General Counsel of the Office of Cannabis Management resigned without very much notice, very recently, and it’s really just very interesting that that is happening now as we’re starting to get knee-deep in the licensing. It’s not ever good.

Related: The Office of Cannabis Management’s chief counsel just left the agency

So they do need to get some other general counsel in there quickly. But as far as whether or not I’m applying for that now vacant position, if nominated, I will not run. And if elected, I will not serve. I do think that it’s a fairly thankless job, being the general counsel of the OCM. Nothing you’re going to do in that position is going to be right. Everybody is going to be yelling and screaming at you about the way you interpret the law and the things you want to do and just nobody’s going to be happy. They need someone very good who understands cannabis issues.

I get that. And I appreciate the fact that a lot of folks think that I might be qualified for that. I’m having a lot of fun doing what I’m doing, having clients work in the cannabis industry. I’m working on a lot of cannabis justice and employment issues for communities that were disproportionately impacted by cannabis enforcement. I probably couldn’t do a lot of those things if I was the GC over at the OCM. I think that’s probably a 28-hour-a-day job.

The open question I think we have about the nine standard licenses here in New York is: are they going to release the regulations all at one time? Or are they going to release them piecemeal like we’ve seen for the conditional regulations? I think, as you’ve seen, conditional came out first. Well, let’s be clear – we didn’t really need a regulation for the conditional. It was a law passed by the legislature, and the OCM just made some things clear about it and got that application up. Something very similar happened with the conditional processing license, where no regulatory review period was necessary. So the OCM was just able to say a few things about it and get that application up, and they’re currently taking applications for that license.

And then for the CAURD license, we did have to go through a regulatory review process. They chose not to go through the second half of the process, they ignored all of the comments, although they did give us a lot of responses, which you can now go and look at on their website. But for these other nine licenses that we’re waiting on, we’re going to have to go through the same regulatory review process. So the sooner they release it, the better. But it is entirely possible that they will release those nine standard licenses in a staggered fashion. So we may see the cultivation license first, and they do some things with that, and then we see the processing after that, and then they work their way through.

I’ve seen a lot of people speculating that the micro-license will be the very last one to be released. I think that’s an interesting speculation, as we like to say, they’re speculating on a hypothesis. I don’t know that I think that’ll necessarily be the last one to be released. I do think it’s entirely possible that they will stagger the release of the regulations. But I’ve not seen anything that makes me think 100% that for some reason the micro-license one is going to be last in line. So we hope that these regulations are released very soon, we really need them, it would be great to start that application process before the end of the year. But we absolutely do not have a definite date yet as to when the micro license one will be opened. And we’ll just have to keep our eyes on the OCM website and their press releases as to when they’re going to release that initial regulation.

I think it’ll be relatively as difficult as any of the other licenses. I don’t think a lot of people are gonna apply for that license, I think you’ll see a lot of cultivators apply for that license. It’s one of the places in MRTA that is an exception to the rule about being able to only have one license, where a cultivator definitely can have their normal cultivation license and one nursery license.

I’ve talked to various folks that are interested in just getting the nursery license, which is to be specifically promoted to social and economic equity applicants. So if you are a social and economic equity applicant, if you have a green thumb or have operated in a nursery or perhaps worked at Lowe’s, or any of the stores that have garden departments, I think you would be an excellent candidate to open a nursery. There’s a lot here in New York City, where there are many stores that are plant and flower stores, and they help individuals that want plants in their homes, to kind of curate their plants that they’re going to have in their homes. I think those people who run those stores would be outstanding applicants for the nursery license. So we’ll just have to see what happens here in New York.

As far as who’s going to come out of the woodwork to apply for that license, again, I do think you will see fewer people apply for that license, so perhaps that will give you a better shot at getting the license. Much like all of the other licenses, if you show you have a coherent business plan to do the thing you’re looking to do in, if you have proof of having done that thing in the past, I think that’s super beneficial. And if you show you have the capital to be able to open a facility that does these things, I think most anyone is going to be a great applicant for that license. And again, since it is one of the licenses that is to be specifically promoted to social and economic equity applicants, I would encourage a lot of social and economic equity applicants that have gardening experience to apply for this because you are who the license is to be targeted to.

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