S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8084--A
 
                             I N  S E N A T E
 
                             January 25, 2022
                                ___________
 
 Introduced  by  Sens.  HINCHEY, KRUEGER, RAMOS -- read twice and ordered
   printed, and when printed to be committed to the Committee on Agricul-
   ture -- reported favorably from said committee and  committed  to  the
   Committee  on  Rules  --  committee  discharged, bill amended, ordered
   reprinted as amended and recommitted to said committee

 AN ACT to amend the agriculture and markets law and the cannabis law, in
   relation to providing a conditional adult-use cultivator license and a
   conditional adult-use processor license
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 520 of the agriculture and markets law is amended
 by adding a new subdivision 3 to read as follows:
   3. THE DEPARTMENT SHALL, TO THE EXTENT  PRACTICABLE,  SHARE  DATA  AND
 DOCUMENTATION RELATED TO AN AGRICULTURAL RESEARCH PILOT PROGRAM WITH THE
 OFFICE OF CANNABIS MANAGEMENT.
   §  2. The cannabis law is amended by adding a new section 68-c to read
 as follows:
   § 68-C. CONDITIONAL ADULT-USE CULTIVATOR  LICENSE.  1.  A  CONDITIONAL
 ADULT-USE  CULTIVATOR  LICENSE  SHALL  BE  SUBJECT  TO THE SAME AUTHORI-
 ZATIONS, RESTRICTIONS AND REQUIREMENTS APPLIED TO ANY ADULT-USE CULTIVA-
 TOR PURSUANT TO SECTION SIXTY-EIGHT OF THIS ARTICLE FOR THE DURATION  OF
 THE  CONDITIONAL  PERIOD OF THE LICENSE, AS WELL AS TO ANY NEW TERMS AND
 CONDITIONS IMPOSED BY THE BOARD AND OFFICE.
   2. TO BE ELIGIBLE TO APPLY  FOR  A  CONDITIONAL  ADULT-USE  CULTIVATOR
 LICENSE, A CULTIVATOR MUST:
   (A)  HAVE  HELD  A VALID INDUSTRIAL HEMP GROWER AUTHORIZATION FROM THE
 DEPARTMENT OF AGRICULTURE AND MARKETS, AS OF DECEMBER THIRTY-FIRST,  TWO
 THOUSAND  TWENTY-ONE,  WHICH AUTHORIZED THE GROWING OF CANNABINOID HEMP,
 AND IS IN GOOD STANDING WITH THE DEPARTMENT OF AGRICULTURE AND MARKETS;
   (B) HAVE GROWN AND HARVESTED HEMP FOR AT LEAST TWO OF  THE  PAST  FOUR
 YEARS  PURSUANT TO THAT LICENSE AND BE ABLE TO PROVIDE PROOF, AS DEFINED
 BY THE OFFICE, OF THE AMOUNT OF HEMP PLANTED  BY  THE  APPLICANT  DURING
 EACH OF THE TWO YEARS THAT HEMP WAS GROWN; AND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD14348-09-2
              

 S. 8084--A                          2
 
   (C) AS AN INDIVIDUAL APPLICANT HAVE AN OWNERSHIP INTEREST OF FIFTY-ONE
 PERCENT OR MORE, OR AS ANY OTHER APPLICANT HAVE AN OWNERSHIP INTEREST OF
 FIFTY-ONE PERCENT OR MORE OF THE ENTITY THAT IS THE LICENSEE.
   3.  A  CONDITIONAL  ADULT-USE  CULTIVATOR  LICENSE SHALL AUTHORIZE THE
 CULTIVATION OF CANNABIS OUTDOORS OR IN A GREENHOUSE WITH  NO  MORE  THAN
 TWENTY  ARTIFICIAL  LIGHTS  UNLESS OTHERWISE AUTHORIZED BY THE OFFICE. A
 CONDITIONAL ADULT-USE CULTIVATOR LICENSEE MAY  CULTIVATE  UP  TO  FORTY-
 THREE  THOUSAND  FIVE  HUNDRED  SIXTY  SQUARE  FEET  OF FLOWERING CANOPY
 OUTDOORS OR TWENTY-FIVE THOUSAND SQUARE FEET OF FLOWERING  CANOPY  IN  A
 GREENHOUSE.    A  CULTIVATOR MAY CULTIVATE BOTH OUTDOORS AND IN A GREEN-
 HOUSE PROVIDED THE FLOWERING CANOPY IN A GREENHOUSE IS LESS  THAN  TWEN-
 TY-THOUSAND  SQUARE  FEET  AND THE TOTAL FLOWERING CANOPY IS EQUAL TO OR
 LESS THAN THIRTY-THOUSAND SQUARE FEET.
   4. A CONDITIONAL ADULT-USE CULTIVATOR LICENSEE MUST  COMPLY  WITH  ANY
 ENVIRONMENTAL STANDARDS AND REQUIREMENTS MANDATED BY THE OFFICE.
   5. THE CULTIVATION OF CANNABIS SHALL ONLY BE PERMITTED WITHIN THE SAME
 OR  AN  ADJACENT  COUNTY  IN  WHICH THE CONDITIONAL ADULT-USE CULTIVATOR
 LICENSEE HAD PREVIOUSLY BEEN AUTHORIZED BY THE DEPARTMENT OF AGRICULTURE
 AND MARKETS TO GROW HEMP.
   6. A CONDITIONAL ADULT-USE CULTIVATOR LICENSEE SHALL HAVE  THE  TEMPO-
 RARY  AUTHORITY  TO  MINIMALLY PROCESS AND DISTRIBUTE CANNABIS PRODUCTS,
 PROVIDED THAT SUCH FINAL PRODUCTS SHALL BE IN THE FORM OF CANNABIS FLOW-
 ER, WITHOUT HOLDING AN ADULT-USE PROCESSOR OR DISTRIBUTOR LICENSE ESTAB-
 LISHED PURSUANT TO SECTIONS SIXTY-NINE AND SEVENTY-ONE OF THIS  ARTICLE;
 PROVIDED  THAT THE LICENSEE COMPLIES WITH ALL REQUIREMENTS FOR THE PROC-
 ESSING AND DISTRIBUTION OF CANNABIS PRODUCTS AS SET OUT BY THE BOARD  IN
 REGULATIONS  OR  IN THE TERMS AND CONDITIONS OF THE CONDITIONAL LICENSE.
 SUCH AUTHORITY TO MINIMALLY PROCESS  AND  DISTRIBUTE  CANNABIS  PRODUCTS
 EXPIRES ON JUNE FIRST, TWO THOUSAND TWENTY-THREE.  AFTER JUNE FIRST, TWO
 THOUSAND  TWENTY-THREE,  ANY CONDITIONAL ADULT-USE CULTIVATOR SEEKING TO
 PROCESS AND DISTRIBUTE CANNABIS PRODUCTS SHALL BE REQUIRED TO APPLY  FOR
 AND  RECEIVE  A PROCESSOR AND DISTRIBUTOR LICENSE TO CONDUCT THIS ACTIV-
 ITY.
   7. FOR THE DURATION OF  THE  CONDITIONAL  PERIOD  OF  THE  CONDITIONAL
 ADULT-USE  CULTIVATOR LICENSE, THE OWNERSHIP OR ORGANIZATIONAL STRUCTURE
 OF THE ENTITY THAT IS THE LICENSEE SHALL NOT BE AMENDED, EXCEPT PURSUANT
 TO THE PROVISIONS OF SUBDIVISIONS TWO, THREE AND FOUR OF SECTION  SIXTY-
 SEVEN OF THIS ARTICLE.
   8.  THE OFFICE SHALL SET OUT SPECIFIC TERMS AND CONDITIONS SETTING OUT
 REQUIREMENTS NECESSARY TO BE AWARDED AND MAINTAIN A  CONDITIONAL  ADULT-
 USE  CULTIVATOR  LICENSE,  INCLUDING  BUT NOT LIMITED TO THE REQUIREMENT
 THAT A LICENSEE AGREES TO PARTICIPATE IN AN ENVIRONMENTAL SUSTAINABILITY
 PROGRAM AND A SOCIAL EQUITY MENTORSHIP PROGRAM. SUCH MENTORSHIP  PROGRAM
 SHALL  BE  DIRECTED TO TRAIN INDIVIDUALS INTERESTED IN BECOMING LICENSED
 CULTIVATORS AND SHALL LEVERAGE REMOTE AND IN-PERSON MENTEES WITH EXPERI-
 ENCE IN AGRICULTURE BUSINESS  MANAGEMENT,  SUSTAINABLE  CANNABIS  CULTI-
 VATION,  AND  BEST PRACTICES. CANDIDATES FOR THE MENTORSHIP PROGRAM MUST
 BE AT LEAST EIGHTEEN YEARS OF AGE, MUST BE A NEW  YORK  STATE  RESIDENT,
 AND  MUST  BE  INDIVIDUALS THAT WOULD BE CONSIDERED SOCIAL EQUITY APPLI-
 CANTS AS DEFINED BY SECTION EIGHTY-SEVEN OF THIS ARTICLE.   THE  LICENSE
 TERMS  AND  CONDITIONS  SET OUT BY THE OFFICE SHALL INCLUDE REQUIREMENTS
 THAT A LICENSEE ENTER INTO A LABOR  PEACE  AGREEMENT  WITH  A  BONA-FIDE
 LABOR  ORGANIZATION THAT IS ACTIVELY ENGAGED IN REPRESENTING OR ATTEMPT-
 ING TO REPRESENT THE APPLICANT'S EMPLOYEES WITHIN SIX MONTHS  OF  LICEN-
 SURE,  THAT  THE  MAINTENANCE  OF SUCH LABOR PEACE AGREEMENT SHALL BE AN
 S. 8084--A                          3

 ONGOING MATERIAL CONDITION OF LICENSURE, AND THAT LICENSEES  SHALL  MEET
 ANY OTHER ELIGIBILITY REQUIREMENTS ESTABLISHED BY THE OFFICE.
   9.  THE BOARD SHALL ESTABLISH A NON-REFUNDABLE APPLICATION AND LICENSE
 FEE, IN A MANNER CONSISTENT WITH SECTION SIXTY-THREE  OF  THIS  ARTICLE,
 FOR  THE CONDITIONAL ADULT-USE CULTIVATOR LICENSE. NO SUCH LICENSE SHALL
 BE ISSUED AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND TWENTY-TWO AND  SUCH
 LICENSE  SHALL  ONLY BE VALID THROUGH JUNE THIRTIETH, TWO THOUSAND TWEN-
 TY-FOUR.
   10. A CONDITIONAL ADULT-USE CULTIVATOR LICENSE SHALL BE DEEMED TO HAVE
 BEEN SURRENDERED TO THE BOARD AND  A  CONDITIONAL  ADULT-USE  CULTIVATOR
 LICENSEE  SHALL  BE  DEEMED NOT TO BE IN GOOD STANDING, AS DETERMINED IN
 THE DISCRETION OF THE EXECUTIVE DIRECTOR IN A WRITTEN NOTICE,  EFFECTIVE
 UPON  DELIVERY  TO  THE LICENSEE AT THE LICENSEE'S LAST KNOWN ADDRESS ON
 FILE WITH THE OFFICE, FOR REASONS INCLUDING BUT NOT LIMITED TO:
   (A) FAILURE TO ABIDE BY ALL THE TERMS AND  CONDITIONS  OF  THE  CONDI-
 TIONAL ADULT-USE CULTIVATOR LICENSE;
   (B)  FAILURE  TO ADHERE TO ALL REQUIREMENTS SET OUT IN REGULATIONS AND
 GUIDANCE, INCLUDING THOSE PROMULGATED AFTER  RECEIVING  THE  CONDITIONAL
 ADULT-USE CULTIVATOR LICENSE;
   (C) FAILURE TO SUBMIT INFORMATION, RECORDS, OR REPORTS;
   (D)  FAILURE  TO  CORRECT  DEFICIENCIES IN ACCORDANCE WITH AN APPROVED
 CORRECTIVE ACTION PLAN;
   (E) DEVIATION FROM REGULATIONS, LICENSING TERMS, OR STANDARD OPERATING
 PROCEDURES IN A MANNER THAT THE OFFICE DETERMINES MAY JEOPARDIZE  HEALTH
 OR SAFETY OF THE PUBLIC, OR THE QUALITY OF PRODUCTS GROWN OR PRODUCED;
   (F)  FAILURE  TO PROVIDE OFFICE EMPLOYEES WITH ACCESS TO THE PREMISES;
 AND
   (G) FAILURE TO BEGIN OPERATIONS WITHIN SIX MONTHS OF THE DATE  OF  THE
 ISSUANCE OF THE LICENSE.
   11. A LICENSEE WHOSE CONDITIONAL ADULT-USE CULTIVATOR LICENSE HAS BEEN
 DEEMED  SURRENDERED  MAY  WITHIN  TEN  DAYS OF THE DELIVERY DATE OF SUCH
 NOTICE APPEAL THE DETERMINATION OF THE EXECUTIVE DIRECTOR TO  THE  BOARD
 PURSUANT  TO  SUBDIVISION  EIGHTEEN  OF SECTION TEN OF THIS CHAPTER. THE
 BOARD SHALL HAVE SOLE DISCRETION TO DETERMINE THE CONDUCT OF THE APPEAL,
 WHICH SHALL INCLUDE NOTICE AND AN OPPORTUNITY TO BE HEARD.  UPON  REVIEW
 BY  THE BOARD, THE BOARD SHALL ISSUE A FINAL WRITTEN DETERMINATION WHICH
 MAY THEN BE REVIEWED PURSUANT TO SECTION ONE HUNDRED THIRTY-FIVE OF THIS
 CHAPTER AND ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
   12. IN THE EVENT THAT  A  CONDITIONAL  ADULT-USE  CULTIVATOR  LICENSEE
 ELECTS  TO  CEASE  OPERATION OF ALL PERMITTED ACTIVITIES OR TO SURRENDER
 ITS LICENSE, THE FOLLOWING PROVISIONS SHALL APPLY:
   (A) THE CONDITIONAL ADULT-USE CULTIVATOR  LICENSEE  SHALL  NOTIFY  THE
 OFFICE  IN WRITING AT LEAST THIRTY DAYS PRIOR TO THE ANTICIPATED DATE OF
 CLOSURE;
   (B) SUCH WRITTEN NOTICE SHALL INCLUDE A PROPOSED PLAN FOR CLOSURE. THE
 PLAN SHALL BE SUBJECT TO OFFICE APPROVAL AND  SHALL  INCLUDE  TIMETABLES
 AND DESCRIBE THE PROCEDURES AND ACTIONS THE LICENSEE SHALL TAKE TO PROP-
 ERLY DESTROY OR OTHERWISE DISPOSE OF ALL THE LICENSEE'S SUPPLY OF CANNA-
 BIS AND/OR CANNABIS PRODUCTS; AND
   (C)  THE  LICENSEE OR FORMER LICENSEE MUST MAINTAIN AND MAKE AVAILABLE
 TO THE OFFICE ALL RECORDS RELATED TO THE CULTIVATION OF CANNABIS  FOR  A
 PERIOD OF THREE YEARS.
   13.  NO  LATER THAN NINETY DAYS BEFORE THE EXPIRATION OF A CONDITIONAL
 ADULT-USE CULTIVATOR LICENSE, THE OFFICE SHALL, PURSUANT TO A REQUEST BY
 THE LICENSEE, REVIEW THE CONDITIONAL ADULT-USE  CULTIVATOR  LICENSEE  TO
 DETERMINE WHETHER THEY ARE IN GOOD STANDING WITH THE OFFICE. GOOD STAND-
 S. 8084--A                          4
 
 ING  SHALL  INCLUDE,  BUT NOT BE LIMITED TO, COMPLIANCE WITH SUBDIVISION
 SEVEN OF THIS SECTION. ANY LICENSEE FOUND TO BE IN GOOD  STANDING  SHALL
 BE  ELIGIBLE  TO APPLY FOR AND RECEIVE AN ADULT-USE CULTIVATION LICENSE,
 PROVIDED THE LICENSEE CAN MEET ALL REQUIREMENTS OF THE NEW LICENSE. SUCH
 A LICENSEE WILL RECEIVE, AT MINIMUM, AN ADULT-USE CULTIVATOR LICENSE FOR
 THE SIZE OF FLOWERING CANOPY THAT THEY WERE LICENSED TO GROW PURSUANT TO
 THEIR  CONDITIONAL ADULT-USE CULTIVATOR LICENSE OR A LARGER SIZE FLOWER-
 ING CANOPY AND AUTHORIZATION TO USE ARTIFICIAL LIGHT AS MAY BE  SET  OUT
 BY  THE BOARD IN REGULATION. A LICENSEE MAY NOT SEPARATELY APPLY FOR ANY
 LICENSE TYPE UNDER THIS ARTICLE PERMITTING THE CULTIVATION OF  ADULT-USE
 CANNABIS WHILE HOLDING A CONDITIONAL ADULT-USE CULTIVATOR LICENSE.
   14.  FOR THE PURPOSES OF THIS SECTION, THE OFFICE HAS THE AUTHORITY TO
 DEFINE TERMS  INCLUDING  BUT  NOT  LIMITED  TO  "GREENHOUSE",  "IMMATURE
 PLANT",  "FLOWERING  CANOPY"  AS PART OF THE TERMS AND CONDITIONS OF THE
 CONDITIONAL ADULT-USE CULTIVATOR LICENSE.
   15. NOTHING HEREIN SHALL LIMIT THE AUTHORITY, POWER, OR  OTHER  RIGHTS
 OR REMEDIES OF THE BOARD OR OFFICE.
   § 3. Section 69 of the cannabis law is amended to read as follows:
   §  69.  Adult-use  processor  license.  1. A processor's license shall
 authorize the acquisition, possession, processing and sale  of  cannabis
 from  the licensed premises of the adult-use cultivator by such licensee
 to duly licensed processors or distributors. A person holding an  adult-
 use  processor's  license  may  apply for, and obtain, one distributor's
 license solely for the distribution of their own products.
   2. For purposes of this section, processing shall include, but not  be
 limited  to, blending, extracting, infusing, packaging, labeling, brand-
 ing and otherwise making  or  preparing  cannabis  products.  Processing
 shall not include the cultivation of cannabis.
   3. No processor shall be engaged in any other business on the premises
 to be licensed; except that a person issued an adult-use cannabis culti-
 vator, processor, and/or distributor license OR A PROCESSOR WHO HAS ALSO
 BEEN  ISSUED  A HEMP GROWER LICENSE BY THE DEPARTMENT OF AGRICULTURE AND
 MARKETS OR A CANNABINOID HEMP PROCESSOR LICENSE UNDER THIS  CHAPTER  may
 hold and operate all issued licenses on the same premises.
   4.  No  cannabis  processor  licensee  may hold more than one cannabis
 processor license provided a  single  license  may  authorize  processor
 activities  at  multiple  locations,  as  set  out in regulations by the
 board.
   5.  No adult-use cannabis processor shall have a  direct  or  indirect
 interest, including by stock ownership, interlocking directors, mortgage
 or  lien,  personal or real property, management agreement, share parent
 companies or affiliated organizations or any other means, in  any  prem-
 ises licensed as an adult-use cannabis retail dispensary or in any busi-
 ness  licensed  as  an  adult-use  cannabis  retail dispensary or in any
 registered organization registered pursuant to  article  three  of  this
 chapter.
   6.    Adult-use  processor  licensees are subject to minimum operating
 requirements as determined by the board in regulation.
   § 4. The cannabis law is amended by adding a new section 69-a to  read
 as follows:
   §  69-A.  CONDITIONAL  ADULT-USE  PROCESSOR  LICENSE. 1. A CONDITIONAL
 ADULT-USE PROCESSOR LICENSE SHALL BE SUBJECT TO THE SAME AUTHORIZATIONS,
 RESTRICTIONS AND REQUIREMENTS APPLIED TO ANY ADULT-USE PROCESSOR  PURSU-
 ANT TO SECTION SIXTY-NINE OF THIS ARTICLE FOR THE DURATION OF THE CONDI-
 TIONAL PERIOD OF THE LICENSE, AS WELL AS TO ANY NEW TERMS AND CONDITIONS
 IMPOSED BY THE BOARD AND OFFICE.
 S. 8084--A                          5
 
   2.  TO  BE  ELIGIBLE  TO  APPLY  FOR A CONDITIONAL ADULT-USE PROCESSOR
 LICENSE, A PROCESSOR MUST:
   (A)  HAVE APPLIED FOR A CANNABINOID HEMP PROCESSOR LICENSE PURSUANT TO
 SECTION NINETY-TWO OF THIS CHAPTER BEFORE JANUARY  FIRST,  TWO  THOUSAND
 TWENTY-TWO;
   (B)  HOLD  AN  ACTIVE CANNABINOID HEMP PROCESSOR LICENSE ISSUED BY THE
 OFFICE; AND
   (C) AS AN INDIVIDUAL APPLICANT HAVE AN OWNERSHIP INTEREST OF FIFTY-ONE
 PERCENT OR MORE, OR AS ANY OTHER APPLICANT HAVE AN OWNERSHIP INTEREST OF
 FIFTY-ONE PERCENT OR MORE OF THE ENTITY THAT IS THE LICENSEE.
   3. A CONDITIONAL ADULT-USE PROCESSOR LICENSE SHALL AUTHORIZE THE PROC-
 ESSING AND MANUFACTURING OF  CANNABIS  PRODUCTS  PROVIDED  THE  LICENSEE
 COMPLIES  WITH  ALL  REQUIREMENTS  FOR THE PROCESSING AND MANUFACTURE OF
 CANNABIS PRODUCTS AS SET OUT  BY  THE  BOARD.  A  CONDITIONAL  ADULT-USE
 PROCESSOR  LICENSEE  SHALL ONLY PERFORM EXTRACTION ACTIVITIES IF AUTHOR-
 IZED TO UNDER THE LICENSEE'S CANNABINOID HEMP PROCESSOR LICENSE AND  ALL
 EXTRACTION METHODS ARE SUBJECT TO OFFICE APPROVAL.
   4.  A  CONDITIONAL  ADULT-USE  PROCESSOR LICENSEE MUST COMPLY WITH ANY
 ENVIRONMENTAL STANDARDS AND REQUIREMENTS AS MANDATED BY THE OFFICE.
   5. THE PROCESSING OF CANNABIS SHALL ONLY  BE  PERMITTED  AT  THE  SAME
 LOCATION  IN  WHICH  THE  CONDITIONAL  ADULT-USE  PROCESSOR  LICENSEE IS
 AUTHORIZED TO PROCESS HEMP, UNLESS EXPRESSLY AUTHORIZED BY THE OFFICE.
   6. A CONDITIONAL ADULT-USE PROCESSOR LICENSEE SHALL HAVE THE AUTHORITY
 TO DISTRIBUTE CANNABIS PRODUCTS WITHOUT HOLDING AN ADULT-USE DISTRIBUTOR
 LICENSE ESTABLISHED PURSUANT TO  SECTION  SEVENTY-ONE  OF  THIS  ARTICLE
 UNTIL  JUNE FIRST, TWO THOUSAND TWENTY-THREE, PROVIDED THAT THE LICENSEE
 COMPLIES WITH ALL REQUIREMENTS FOR THE DISTRIBUTION OF CANNABIS PRODUCTS
 AS SET OUT BY THE OFFICE. AFTER JUNE FIRST, TWO  THOUSAND  TWENTY-THREE,
 ANY  CONDITIONAL PROCESSOR SEEKING TO DISTRIBUTE CANNABIS PRODUCTS SHALL
 BE REQUIRED TO APPLY FOR AND RECEIVE A DISTRIBUTOR  LICENSE  TO  CONDUCT
 THIS ACTIVITY.
   7.  FOR  THE  DURATION  OF  THE  CONDITIONAL PERIOD OF THE CONDITIONAL
 ADULT-USE PROCESSOR LICENSE, THE OWNERSHIP OR  ORGANIZATIONAL  STRUCTURE
 OF THE ENTITY THAT IS THE LICENSEE SHALL NOT BE AMENDED, EXCEPT PURSUANT
 TO  THE PROVISIONS OF SUBDIVISIONS TWO, THREE AND FOUR OF SECTION SIXTY-
 SEVEN OF THIS ARTICLE.
   8. THE OFFICE SHALL SET OUT SPECIFIC TERMS AND CONDITIONS SETTING  OUT
 REQUIREMENTS  NECESSARY  TO BE AWARDED AND MAINTAIN A CONDITIONAL ADULT-
 USE PROCESSOR LICENSE, INCLUDING BUT NOT LIMITED TO THE REQUIREMENT THAT
 A LICENSEE AGREES TO  PARTICIPATE  IN  AN  ENVIRONMENTAL  SUSTAINABILITY
 PROGRAM  AND  A  SOCIAL EQUITY MENTORSHIP PROGRAM. SUCH PROGRAM SHALL BE
 DIRECTED TO TRAIN INDIVIDUALS INTERESTED IN BECOMING LICENSED PROCESSORS
 AND SHALL LEVERAGE REMOTE AND IN-PERSON ENGAGEMENT  TO  PROVIDE  MENTEES
 WITH  EXPERIENCE  IN  PROCESSING TECHNIQUES AND GOOD MANUFACTURING PRAC-
 TICES.  CANDIDATES FOR THE MENTORSHIP PROGRAM MUST BE AT LEAST  EIGHTEEN
 YEARS OF AGE, MUST BE A NEW YORK STATE RESIDENT, AND MUST BE INDIVIDUALS
 THAT  WOULD BE CONSIDERED SOCIAL EQUITY APPLICANTS AS DEFINED BY SECTION
 EIGHTY-SEVEN OF THIS ARTICLE.  THE LICENSE TERMS AND CONDITIONS SET  OUT
 BY  THE  OFFICE  SHALL INCLUDE REQUIREMENTS THAT A LICENSEE ENTER INTO A
 LABOR PEACE AGREEMENT  WITH  A  BONA-FIDE  LABOR  ORGANIZATION  THAT  IS
 ACTIVELY  ENGAGED  IN REPRESENTING OR ATTEMPTING TO REPRESENT THE APPLI-
 CANT'S EMPLOYEES WITHIN SIX MONTHS OF LICENSURE, THAT THE MAINTENANCE OF
 SUCH LABOR PEACE AGREEMENT SHALL BE AN  ONGOING  MATERIAL  CONDITION  OF
 LICENSURE,  AND THAT LICENSEES SHALL MEET ANY OTHER ELIGIBILITY REQUIRE-
 MENTS ESTABLISHED BY THE OFFICE.
 S. 8084--A                          6

   9. THE BOARD SHALL ESTABLISH A NON-REFUNDABLE APPLICATION AND  LICENSE
 FEE,  IN  A  MANNER CONSISTENT WITH SECTION SIXTY-THREE OF THIS ARTICLE,
 FOR THE CONDITIONAL ADULT-USE PROCESSOR LICENSE. NO SUCH  LICENSE  SHALL
 BE  ISSUED AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND TWENTY-TWO AND SUCH
 LICENSE  SHALL  ONLY BE VALID THROUGH JUNE THIRTIETH, TWO THOUSAND TWEN-
 TY-FOUR.
   10. A CONDITIONAL ADULT-USE PROCESSOR LICENSE SHALL BE DEEMED TO  HAVE
 BEEN  SURRENDERED  TO  THE  BOARD  AND A CONDITIONAL ADULT-USE PROCESSOR
 LICENSEE SHALL BE DEEMED NOT TO BE IN GOOD STANDING,  AS  DETERMINED  IN
 THE  DISCRETION OF THE EXECUTIVE DIRECTOR IN A WRITTEN NOTICE, EFFECTIVE
 UPON DELIVERY TO THE LICENSEE AT THE LICENSEE'S LAST  KNOWN  ADDRESS  ON
 FILE WITH THE OFFICE, FOR REASONS INCLUDING BUT NOT LIMITED TO:
   (A)  FAILURE  TO  ABIDE  BY ALL THE TERMS AND CONDITIONS OF THE CONDI-
 TIONAL ADULT-USE PROCESSOR LICENSE;
   (B) FAILURE TO ADHERE TO ALL REQUIREMENTS SET OUT IN  REGULATIONS  AND
 GUIDANCE,  INCLUDING  THOSE  PROMULGATED AFTER RECEIVING THE CONDITIONAL
 ADULT-USE PROCESSOR LICENSE;
   (C) FAILURE TO SUBMIT INFORMATION, RECORDS, OR REPORTS;
   (D) FAILURE TO CORRECT DEFICIENCIES IN  ACCORDANCE  WITH  AN  APPROVED
 CORRECTIVE ACTION PLAN;
   (E) DEVIATION FROM REGULATIONS, LICENSING TERMS, OR STANDARD OPERATING
 PROCEDURES  IN  A  MANNER THE OFFICE DETERMINES MAY JEOPARDIZE HEALTH OR
 SAFETY OF THE PUBLIC, OR THE QUALITY OF PRODUCTS PRODUCED;
   (F) FAILURE TO PROVIDE OFFICE EMPLOYEES WITH ACCESS TO  THE  PREMISES;
 AND
   (G)  FAILURE  TO BEGIN OPERATIONS WITHIN SIX MONTHS OF THE DATE OF THE
 ISSUANCE OF THE LICENSE.
   11. A LICENSEE WHOSE CONDITIONAL ADULT-USE PROCESSOR LICENSE HAS  BEEN
 DEEMED  SURRENDERED  MAY  WITHIN  TEN  DAYS OF THE DELIVERY DATE OF SUCH
 NOTICE APPEAL THE DETERMINATION OF THE EXECUTIVE DIRECTOR TO  THE  BOARD
 PURSUANT  TO  SUBDIVISION  EIGHTEEN  OF SECTION TEN OF THIS CHAPTER. THE
 BOARD SHALL HAVE SOLE DISCRETION TO DETERMINE THE CONDUCT OF THE APPEAL,
 WHICH SHALL INCLUDE NOTICE AND AN OPPORTUNITY TO BE HEARD.  UPON  REVIEW
 BY  THE BOARD, THE BOARD SHALL ISSUE A FINAL WRITTEN DETERMINATION WHICH
 MAY THEN BE REVIEWED PURSUANT TO SECTION ONE HUNDRED THIRTY-FIVE OF THIS
 CHAPTER AND ARTICLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
   12. IN THE EVENT  THAT  A  CONDITIONAL  ADULT-USE  PROCESSOR  LICENSEE
 ELECTS  TO  CEASE  OPERATION OF ALL PERMITTED ACTIVITIES OR TO SURRENDER
 ITS LICENSE, THE FOLLOWING PROVISIONS SHALL APPLY:
   (A) THE CONDITIONAL ADULT-USE  PROCESSOR  LICENSEE  SHALL  NOTIFY  THE
 OFFICE  IN WRITING AT LEAST THIRTY DAYS PRIOR TO THE ANTICIPATED DATE OF
 CLOSURE;
   (B) SUCH WRITTEN NOTICE SHALL INCLUDE A PROPOSED PLAN FOR CLOSURE. THE
 PLAN SHALL BE SUBJECT TO OFFICE APPROVAL AND  SHALL  INCLUDE  TIMETABLES
 AND DESCRIBE THE PROCEDURES AND ACTIONS THE LICENSEE SHALL TAKE TO PROP-
 ERLY DESTROY OR OTHERWISE DISPOSE OF ALL THE LICENSEE'S SUPPLY OF CANNA-
 BIS AND/OR CANNABIS PRODUCTS; AND
   (C)  THE  LICENSEE OR FORMER LICENSEE MUST MAINTAIN AND MAKE AVAILABLE
 TO THE OFFICE ALL RECORDS RELATED TO THE CULTIVATION OF CANNABIS  FOR  A
 PERIOD OF THREE YEARS.
   13.  NO  LATER THAN NINETY DAYS BEFORE THE EXPIRATION OF A CONDITIONAL
 ADULT-USE PROCESSOR LICENSE, THE OFFICE SHALL, PURSUANT TO A REQUEST  BY
 THE  LICENSEE,  REVIEW  THE  CONDITIONAL ADULT-USE PROCESSOR LICENSEE TO
 DETERMINE WHETHER THEY ARE IN GOOD STANDING WITH THE OFFICE. GOOD STAND-
 ING SHALL INCLUDE, BUT NOT BE LIMITED TO,  COMPLIANCE  WITH  SUBDIVISION
 SEVEN  OF  THIS SECTION. ANY LICENSEE FOUND TO BE IN GOOD STANDING SHALL
 S. 8084--A                          7
 
 BE ELIGIBLE TO APPLY FOR AND RECEIVE  AN  ADULT-USE  PROCESSOR  LICENSE,
 PROVIDED THE LICENSEE CAN MEET ALL REQUIREMENTS OF THE NEW LICENSE.
   14.  FOR THE PURPOSES OF THIS SECTION, THE OFFICE HAS THE AUTHORITY TO
 DEFINE TERMS INCLUDING BUT NOT LIMITED TO "EXTRACTION" AS  PART  OF  THE
 TERMS AND CONDITIONS OF THE CONDITIONAL ADULT-USE PROCESSOR LICENSE.
   15. NOTHING IN THIS SECTION SHALL LIMIT THE AUTHORITY, POWER, OR OTHER
 RIGHTS OR REMEDIES OF THE BOARD OR OFFICE.
   §  5.  The cannabis control board shall provide a report on the condi-
 tional cultivator and processor licenses as provided for  by  this  act.
 Such  report  shall include, but not be limited to: the number of condi-
 tional licenses applied for by geographic region  and  approved  by  the
 board; the revenue received from such conditional licenses from fees and
 taxation  related  to  cultivation,  distribution,  and eventual sale of
 adult-use cannabis; the number of individuals, if any,  that  transition
 from a conditional license to other licenses issued by the board and the
 types  of  licenses  awarded;  the number of applicants determined to be
 social equity applicants that applied for  and  received  a  conditional
 cultivator  and processor  license; the effectiveness  and participation
 data related to the social equity mentoring program; and other such data
 and information that the board deems  necessary  and  appropriate.  Such
 report  shall  be published on the office's website and presented to the
 governor, the majority leader of the  senate  and  the  speaker  of  the
 assembly,  no  later  than January 1, 2023 and again on January 1, 2024.
 Nothing shall preclude the office from providing such reporting as  part
 of  the  annual  report required by the board pursuant to section ten of
 the cannabis law, provided, however, that the  information  required  by
 this act shall be clearly separate from other reporting.
   §  6.  This  act shall take effect immediately, provided however, that
 the provisions of sections two and four of this act shall expire on June
 30, 2024 when upon such date the provisions of such  sections  shall  be
 deemed repealed.