Grassroots adult-use cannabis supporters might be celebrating Thursday’s news out of Albany.
The state is now one step further in the process of creating a recreational market after the House and Senate quickly approved bill S8084A, which would provide temporary and conditional licenses to many of the state’s 742 authorized hemp growers to grow and process adult-use cannabis.
The legislation will directly affect hemp farmers in New York, allowing them to switch their operational focus to THC cannabis, including both indoor and outdoor grow operations, with a few minor qualifications.
“I think it’s great news,” said Osbert Orduña, owner of The Cannabis Place, an adult-use activist on Long Island and dispensary applicant in both New York and New Jersey. “Who are the cultivators right now? It’s the vertically integrated [multi-state operations] that are the current license holders under the medical program. They control the market because of their size and magnitude, so to have the ability to go to an independent hemp farmer that may be producing a craft product or have an indoor or outdoor grow facility is a win-win all around.”
The qualifications will require hemp farmers to have had a license prior to 2022, have grown hemp for at least two of the last four years, and to have a controlling interest (51 percent) in the hemp license.
Initial limitations will allow cultivation in an outdoor setting up to 43,560 square feet or 25,000 square feet in a greenhouse, although that greenhouse space is limited to twenty lights. The bill will allow license-holders to process and distribute products that are in flower form. After a June 1, 2023, a processor license will be required.
Kaelan Castetter, co-founder of the New York Cannabis Growers and Processors Association, has been a supporter of bill S8084A since it’s introduction.
“We have been working on this bill ever since [State Senator] Jeremy Cooney introduced it over the summer,” said Castetter. “We have been working with the legislature on this bill and a lot of our efforts were on this bill. This is a pretty significant addition to the cannabis law. It’s a huge step forward and I don’t think a lot of people were expecting it.”
Castetter also consults for license applicants, and while he does not own any production licenses, he believes the bill will have lasting effects throughout the industry.
“I’d say this is great for my clients,” continued Castetter. “It’s great for the members of the Growers Association. It’s giving hemp growers, mostly small and medium businesses, the opportunity to enter the market ahead of or at the same time as the big MSO’s.”
Representatives for the state’s Registered Operators, the state’s only vertically integrated operators, generally dominated by multi-state operators who were preparing to dominate adult-use sales prior to the bill’s passage, attempted to put a good face on the results.
“In general we are [feeling] positive about the bill,” said Jeremy Unruh, Senior Vice President of Public and Regulatory Affairs for PharmaCann, a Registered Operator. “We understand at a higher level, this is the first act of the state to move down the adult-use path, and we view that as a positive.”
Grassroots supporters of the legislation say they hope it will allow social equity dispensary licensees to have access to product upon opening and possibly aid in reaching the goal of half of all licenses being owned by social equity applicants. reaching the goal of half of all licenses being owned by social equity applicants.
“It provides opportunities for those folks,” said Oduña. “The requirements will create more opportunity and diversity on the growth side. I think it will end up creating a more robust market place for us, the dispensaries, and more opportunity for the consumer to see lower prices.”
Governor Kathy Hochul will have the opportunity to sign the bill in the coming weeks, something Castetter doesn’t see as an obstacle too big to overcome.
“I would think she would want to do this sooner rather than later,” he said. “There is a necessity for the office of cannabis management to roll out regulations on this and to start getting authorizations out the door so growers can get going by summer.
“I think she moves on this quickly and I wouldn’t be surprised if in a week or two that there is an announcement for the bill signing.”
One concern is that while the bill may quickly obtain Gov. Hochul’s signature, it still needs to be turned into regulations by the state’s Office of Cannabis Management, which is already busy creating new adult-use regulations expected in May or June. Hemp farmers need to get their seeds in the ground by May or June, so it’s possible this new law will not impact the 2022 growing season.
“So now they are in a situation where if they are waiting on regulation for growing then there would be no inventory,” said Nancy Udell, Director of the Empire State NORML chapter. “They will have to rely on corporate cannabis and they want to avoid that. So they want to give provisional licenses to start growing under the rules and there will be some inventory there.
“This is supposed to benefit small and midsize farmers. This is going to the Governor’s desk and she is fairly cannabis friendly. I don’t think she is going to sit on it.”
Initial estimates confirmed by multiple sources indicate that there is a pool of between 150 to 220 hemp farmers that could qualify under this regulation, though not all are expected to be able to convert. Those same estimates equate that one acre of outdoor grow would produce about 2,000 pounds of biomass, allowing plenty of room for larger corporations to continue to focus on smokable flower without an invasion of competition. Consumers should be the real winners under this law, giving them easier access to a more diverse and affordable product line across the board.
