You should have a general understanding of the industry landscape before establishing any business: How much can you earn? What are the challenges? Who are you competing with?
Marijuana firms now have greater opportunities for profit as more states make the drug legal. Sales in New York’s legalized cannabis market have exceeded $8.1 million (between January 2023 and June 2023) since legalization in 2016. Additionally indicating the potential of a lucrative industry, sales are anticipated to reach $7 billion by 2025.
Here are some things to consider before launching a cannabis business in New York and what to do if you decide to engage in the cannabis industry.
Is New York Opening The License Application Process Soon?
Yes, New York cannabis authorities will be issuing 1,500 licenses across multiple categories on October 2023. Start preparing now to open a cannabis business of your choice.
How To Get A Cannabis License In New York
Here is how you can get a license in the Empire State of the United States:
Choose The Type of Cannabis Business to Start
The cannabis industry is actually very diverse. In an expanding market, there are plenty of ways to launch a business and make money. So, choose the type of business you want to start such as a dispensary, cultivation, or delivery, and start working towards it.
Understand Regulatory And Legal Requirements
A remarkable step forward in the commercialization of the legal cannabis sector has been the recent legalization of cannabis across many states. However, the legalization terms, notably the regulatory requirements for various cannabis businesses, vary depending on the jurisdiction.
The lack of governmental regulatory compliance emphasizes the importance of keeping in mind local regulations while starting a cannabis business. Therefore, if you want to start a cannabis business in New York you must understand and follow the cannabis regulations.
Register Your Business Name And Legal Entity
The next step is to formally register the business with the New York cannabis authorities.
This not only gives you liability protection as a business owner but also moves you closer to being in good standing with the state. An LLC or corporation may help prevent the loss of your personal assets in the event that your business faces litigation or goes bankrupt.
Start Your New York Cannabis Property Search
Finding a property is the most important step in the application process for almost all types of cannabis licenses in New York. To make sure you can obtain the required approvals, you must conduct extensive due diligence on your intended property and interact with local representatives from your desired municipality. Do not forget that:
- New York mandates a buffer zone of 500 feet from school grounds and 200 feet from places of worship for retail and on-site consumption licenses.
- For some license types, municipalities may impose additional or less stringent setback requirements.
- Building relationships inside the community can help you develop a good working relationship with the community you will be working with, which will boost your application.
New York Cannabis Business Funding
After choosing your entity and location, you may be able to focus on raising the funds required to have your business licensed and operational. Entrepreneurs typically have the choice of raising funds by issuing debt or equity. Lenders aren’t likely to care what kind of business you are if you plan to raise money through debt. Equity investors historically have generally been more at ease dealing with corporations in the startup and venture capital space.
New York Equity Considerations
Entrepreneurs should also be aware of any social equity status requirements and any future limitations New York may impose on certain license categories. These license types may have some benefits for the licensing procedure, but because they limit the amount of equity that can be granted to investors, they may make it difficult to raise money. This might be especially difficult for candidates with few assets and no income to base their valuations on.
Apply For Cannabis Business Permits and Licenses
Now comes the difficult part.
Proper licensing and business permits are essential for every cannabis business in New York. So, you must be aware of the license application deadlines and have proper documentation at hand to easily apply for whichever license you want.
How Much Is A Cannabis License In New York
If you want to open a cannabis business in New York, you may have to pay $2,000 for a CAURD license. For a general license, the range might vary between $3000 to $300,000.
If you want to open a cannabis business in New York, it’s important to understand the costs involved. The actual cost of setting up and running a business, however, can vary from $400,000 to $1,000,000, depending on a number of factors like the facility’s size and location, furnishings, and inventory.
Types Of Licenses In New York
The following adult-use license categories are available in New York:
- Cultivator license
- Nursery license
- Processor license
- Distributor license
- Cooperative license
- Micro business license
- Retail dispensary license
- On-site consumption license
- Delivery license
Medical cannabis license types in New York
- Cultivator – A Cultivator may own a Processor and Distributor license, but solely to process and market its own goods. A Dispensary cannot be owned by a Cultivator.
- Processor – A Processor may also possess a Distributor license, but exclusively for the purpose of dispersing its own products.
- Cooperative- A dispensary, a microbusiness, or an on-site consumption location is not permitted for cooperatives to own (directly or indirectly). In addition, no Cooperative member may have a direct or indirect interest in any adult-use cannabis license.
- Distributor – A Distributor may also possess a Cultivator or Processor license, but only in order to distribute cannabis and cannabis-related goods that have been grown or processed with that license. A distributor cannot be the owner of a dispensary, a small business, or an on-site consumption location.
- Retail Dispensary – Retail dispensaries are not permitted to directly or indirectly hold a processor, cooperative, processor, grower, or distributor license. Having more than three retail dispensary licenses is prohibited.
- Micro business – Micro businesses may not own (directly or indirectly) more than one micro business or any other type of adult-use license.
- Delivery – No one who holds a Delivery license or another adult-use license may possess more than one of either.
- Nursery – A cultivator who wants to sell to other cultivators, cooperatives, or small businesses might apply for and obtain a nursery license.
- On-site Consumption – No one who holds an On-Site Consumption license or another adult-use authorization may possess more than one of either.
It can be challenging to start a legal cannabis business in New York. However, the potential for growth and success is huge with the right assets and efforts. Before moving forward in this developing industry, you simply need to exercise caution and bear in mind the legal complexities of operations in the cannabis industry.