Senate Bill S8189

                                 
BILL NUMBER: S8189

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the cannabis law, in relation to microbusiness licenses

 
PURPOSE:

To allow microbusiness licensees to convert to an adult use cannabis
cultivation license.

 
SUMMARY OF PROVISIONS:

Section one adds two new paragraphs to section 73 of the cannabis law,
which grant OCM the authority to allow microbusiness licensees to
convert their license into an adult use cultivation license. If a micro-
business licensee wishes to convert, they have to relinquish control
over any property they obtained for the purpose of adult use retail
sales. In addition, this bill authorizes OCM to allow for a cultivation
only microbusiness for those licensees that do not plan on opening a
retail storefront.
              

Section two state the effective date.

 
JUSTIFICATION:

This bill would authorize current microbusinesses to relinquish poten-
tial retail locations in order to convert to a cultivation license. The
Office of Cannabis Management authorized cultivators to change their
license type from cultivation to microbusiness during the 2023 applica-
tion period. Many cultivators sought to do so, due to the lower cost of
business, the reduced applidtioii fee and uncertainty surrounding the
market. The market dynamic has since changed: more supply is needed and
the opportunities to secure the retail storefronts necessary to operate
as microbusinesses are dwindling. Many cultivators that became micro-
businesses did so out of financial need, and with the market expanding,
wish to forego any retail business and focus on their expertise in
cultivation.  Currently, there is no mechanism by which a microbusiness
can become a cultivation license.

This bill would create this mechanism by granting the Office of Cannabis
Management the authority to recognize this type of license transition.
This change would also benefit microbusinesses that become successful in
developing their craft brand and allow them to seek additional canopy
through transitioning to a cultivation license. Finally, this bill would
authorize the Office of Cannabis Management to allow for a cultivation
only microbusiness for those licensees that do not plan on opening a
retail storefront.  Authorizing a cultivation only microbusiness license
would reduce barriers to entry for persons of color and clarify that
microbusinesses that operate only as cultivators are subject to culti-
vation and not retail regulations.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

Minimal.

 
EFFECTIVE DATE:
This act shall take effect immediately.