Ray Axberg (left) demonstrates Pharmacann’s extraction machinery in their facility in Montgomery, NY. Many hemp processors have similar equipment but have not used it for THC Delta-9 extraction yet. Credit: Mike Fourcher / Grown In

Last week, New York’s Office of Cannabis Management approved the application process for Adult Use Conditional Processor Licenses, an integral part of the state’s expanding market as farm-based cultivators plan to bring in outdoor harvests in late summer.

According to OCM’s new rules, cannabis processor license applicants must have applied for a Cannabinoid Hemp Processor License before January 1st, 2022. The license will authorize license holders to process and distribute their own cannabis products for a period of two years or until they transition to a non-conditional license. 

Grown In obtained a list from the state of 33 Cannabinoid Hemp Processors who currently have a license; though, there may be more operators who also meet the criteria for the adult-use application if they applied for their hemp processor license before January 1st, 2022 and have not yet been approved. 

[Read list of New York’s Hemp Processors]

“This could be a challenge for businesses, if they’re evaluating making the switch from hemp processing to adult use THC processing,” said Michelle Bodian, a cannabis attorney who works with applicants applying for adult-use and medical licensure. “If you don’t know how many others you’re competing with, it is kind of hard to make that informed decision of whether the juice is worth the squeeze.”

The attorney said that some processors may avoid making the switch due to federal illegality or banking issues, but for many, it will be a compelling business opportunity.

“It is a first-mover advantage, these conditional processors will be the only total-use processors in the marketplace,” Bodian said. “So, those who see first-to-market have a huge financial windfall.”

So far, there are 203 newly licensed conditional cultivators, with at least 250 more applicants still waiting for approval. 

“[The cultivators] can do minimal processing, meaning they pre-rolls, but they can’t make edibles or tinctures or any other product types,” Bodian said. “So, they are going to start harvesting this fall but they have nowhere to send the biomass to then get manufactured into finished goods. So, this is the necessary next step in the supply chain.” 

Jeff Luciano has a 12,000 square-foot hemp processing and manufacturing site in Spencer, New York which he plans to convert to adult-use if he is approved for a license. 

Luciano was one of the earlier hemp processors to get a license: his company, High End Multi Processing, has been up and running since 2019.

Luciano plans on submitting an application soon and says he will focus on mainstream products like gummies, tinctures, and concentrates, which he thinks will be in high demand with dispensaries. He is also looking into establishing a hydro-carbon extraction process at his facility. 

“The whole opportunity to pivot over to adult-use has been great, we will be operating a lot stronger and investing in infrastructure,” Luciano said.

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Shelby is the Mid-Atlantic reporter for Grown In. She has previously written for DIG Boston, Spectrum, and The Boston Globe.