New York Cannabis Delivery Rules Released

The New York Office of Cannabis Management recently published guidance for licensed recreational marijuana retailers that wish to make home deliveries of cannabis products. The New York cannabis delivery rules for adult-use were released only weeks before the anticipated launch of the state’s regulated market for marijuana, which was legalized by New York lawmakers with a groundbreaking bill passed last year.

The New York cannabis delivery rules apply to the state’s Conditional Adult-Use Retail Dispensary (CAURD) licensees, who will be awarded the first 175 permits to make retail sales of recreational marijuana in the state. The initial 36 CAURD licenses, which are reserved for individuals with past marijuana-related convictions and nonprofit groups serving those harmed by prohibition, were announced by the OCM last month.

“CAURD Licensees will be able to receive approval from the Office of Cannabis Management to begin delivery to customers, jumpstarting sales of New York cannabis products with a model that will help them compete while providing options to licensee-entrepreneurs as they build new adult-use cannabis businesses,” the OCM wrote in a statement about the new delivery guidelines.

Under the cannabis delivery guidance published online on December 9, adult-use cannabis retail license holders are allowed to secure a commercial warehouse from which to fill cannabis delivery orders for up to one year. The warehouse locations will give licensees a temporary site to launch their businesses while building permanent dispensary locations, the OCM noted.

The retailers are limited to making deliveries of cannabis products to adults 21 and older, who are required to provide valid identification at the time of sale and delivery. Customers are only permitted to place orders for delivery online or by phone. In-person sales or pickups at the retailer’s warehouse location are not allowed. Customers must also pay for their order online prior to delivery. The guidelines do not permit cash payments from the customer to the delivery employee.

Cannabis retailers are permitted to make deliveries of cannabis products to customers via motor vehicles, bicycles, scooters or other similar modes of transportation. Each cannabis retail business is allowed up to 25 delivery personnel, per requirements of the Marihuana Regulation and Taxation Act (MRTA), the law legalizing recreational cannabis in New York that was signed into law by former governor Andrew Cuomo on March 31, 2021.

The new delivery guidance also notes that cannabis delivery warehouse locations and delivery storefronts may not be located in cities and towns that voted to opt out of hosting recreational marijuana retail businesses within their jurisdictions. The rules clarified that deliveries of cannabis products may be made to customers in such communities, however.

Rules Governing Dispensary Locations Eased

The OCM also announced last week that dispensary owners would be given new leeway to choose a location for their businesses. Under the previous rules, CAURD licensees were required to accept a turnkey site from the Dormitory Authority of the State of New York (DASNY) for their retail operations. Damian Fagon, the OCM’s chief equity officer, said that the agency made the change after conferring with the first business owners awarded licenses, many of whom expressed a desire to choose the site for their shops. The decision also alleviates pressure on DASNY to expedite the leasing process.

“It’s just about adapting to changing circumstances, and making this thing work for New York,” Fagon said in a statement to The New York Times, adding: “People are ready to make some money, and we’re ready to make that as easy as possible for them.”

While the change allows cannabis retail business owners to choose their own dispensary storefront location, they’re not required to do so. DASNY noted that the agency will continue to secure suitable retail locations, which will be matched with waiting licensees as they become available.

DASNY also revealed that it has secured its first business location for a CAURD licensee. At a meeting of the DASNY board held last week, president and CEO Reuben R. McDaniel III announced the agency had signed its first lease for a retail cannabis dispensary site for a property in Harlem, only steps away from the famed Apollo Theater.

“I’m pleased to announce that last night we signed our first lease,” he told the DASNY board. “For those of you familiar with Harlem, you can stand at the Apollo and throw a baseball right across the street.”

McDaniel added that the design team has finished initial plans for the 2,800-square-foot site and noted that construction would begin once DASNY approves the final design He didn’t reveal which licensee would be awarded the business location but noted that the agency hopes to sign more leases by the end of the year.