New York hemp farmers given priority to grow recreational marijuana

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(This story first appeared at Hemp Industry Daily.)

New York is giving licensed hemp cultivators an early opportunity to grow adult-use marijuana this spring in order to supply the state’s adult-use market next year.

A new law signed Tuesday by Gov. Kathy Hochul sets up a first-of-its-kind “conditional adult-use cultivator” license aimed at speeding marijuana to market when recreational sales launch, likely next year.

The idea came about as a way to prevent a lengthy delay and alleviating a potential supply crunch in the rollout of the adult-use marijuana market as well as to increase diversity.

To be eligible to grow marijuana under a conditional license, New Yorkers must:

  • Have a hemp license from New York’s Department of Agriculture and Markets as of Dec. 31, 2021.
  • Have grown and harvested hemp for at least two of the past four years.
  • Have at least 51% ownership stake in a business licensed to grow hemp.
  • Participate in an environmental sustainability program and a social equity mentorship program.

Hochul said after signing the measure that giving hemp operators a first crack “positions New York’s farmers to be the first to grow cannabis and jump-start the safe, equitable and inclusive new industry we are building.”

New York legalized adult-use marijuana last year and authorized hemp production in 2017.

Last year, New York licensed 748 hemp growers on roughly 33,000 acres and 1.1 million square feet of indoor and greenhouse cultivation.

The conditional marijuana growing licenses allow farmers to “minimally process and distribute cannabis products, provided that such final products shall be in the form of cannabis flower.”

For New York hemp operators who want to further process or extract cannabinoids from hemp, a separate conditional processor license will be required.

Those licenses will be reserved for people who have already applied for the state’s new “cannabinoid hemp processsor” license set up last year.

It wasn’t immediately clear how many people have applied for those licenses, which cost $400 and are good for two years.

Hemp activists cheered the conditional license law but cautioned that marijuana and hemp are different varieties of cannabis with very different regulatory hurdles.

“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,” Jonathan Miller, lawyer for the U.S. Hemp Roundtable, told New York TV station WNBC.

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The law does not set fees for either kind of conditional license.

The conditional licenses will expire by 2024, after which time growers and processors will need regular licenses from the state’s new Cannabis Control Board, which oversees both the marijuana and hemp industries.