New York’s new law allowing hemp growers to grow THC cannabis is actually leveraging a relatively small group of growers, and leaves a much larger group of CBD sellers behind, say advocates.

Enacted by Gov. Kathy Hochol last month, the new law impacts 104 CBD growing companies licensed in New York as of March 11, 2022, according to New York’s Department of Agriculture and Markets. But the law, focused on growing, left behind a huge number of hemp retailers across the state: 2,417 of them, according to state reports.

“My understanding is that the state believes that hemp growers in [New York] are already growing cannabis and can get up and running quickly, such that there will be [New York] product to sell by the end of the year,” said James Landau, a cannabis attorney at McCarthy Fingar LLP in New York.

But allowing these new licenses to cultivate cannabis likely does not do much for the state’s goal of promoting cultivators of color. The vast majority of these licenses are located in rural communities, and although Grown In has not confirmed this information, it is unlikely these licenses are operated by diverse owners.

Hemp growers aren’t rushing to apply for licenses yet. According to the Office of Cannabis Management, as of yesterday, not one hemp grower has applied for a cannabis grower license so far.

“The purpose of this law was to ensure that when the retail licenses are available, there will actually be [New York state] products available for those retailers to sell. The growers and processors need a head start in order to make that happen,” said Justin Flagg, the communications director for Senator Liz Krueger, who co-authored the bill. “The conditional adult use retail license draft regulations came out two weeks ago, and I believe OCM said the application process for those would begin by mid-April.”

The law precludes social equity applicants that were impacted by the justice system had a harder time getting credit for loans, jobs, housing, and other stigmatizing aspects of a cannabis arrest or convictions.

“While I think the spirit of the laws for provisional licenses were well intentioned, there are some fundamental concerns that are raised by them,” said David Holland, spokesperson for Empire NORML.

Holland suggested one major problem with the law is that it requires hemp farmers to have a license under the states’ pilot hemp program and have cultivated for two to four years.

“That precludes many farmers who came to the program after it was out of the pilot program. It also precludes many social equity farmers who got licensed later,” Holland said. Which is a big number, since the state reports 742 authorized hemp growers – only 104 of which were part of the pilot program. 

The qualifications will require licensees 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, effectively making it impossible to grow in winter months, say some cultivators. The law allows license-holders to process and distribute products that are in flower form. After June 1, 2023, a processor license will be required.

“In theory, they should be able to harvest by early Fall. That time period roughly corresponds to the same frame when the newly created class of justice impacted equity applicants may receive the first 100 provisional retail licenses for THC cannabis,” said Holland. 

By January 1, 2023, the Office of Cannabis Management is due to publish a report detailing the number of conditional licenses by geographic region, their revenue, the number of people that  change from a conditional license to other licenses, the number of social equity applicants that received  a  conditional cultivator or processor  license, and the success of the social equity mentoring program.