New York Small Business Cooperative License

November 4, 2021 Uncategorized

New York has legalized marijuana with Governor Cuomo making good on his promise to legalize in 2021. Looking at the potential influx of money this industry will bring into the state’s economy, it’s easy to see that New York has much to gain from legalizing cannabis.

New Jersey, New York’s neighbor, has also legalized cannabis. With this being the case, the marketplace in these states is ripe for entrance with various licenses available (New York Adult Use Processor License, New York Adult Use Distributor License, etc. etc.). However, just as in every other state with legal marijuana, entrepreneurs must prepare if they want to get the right license for their operations.

In this post, we cover some of the requirements that New York has established for the New York small business cooperative license. Keep in mind, these requirements are likely to evolve over time. However, it’s always wise to understand the state’s demands as you’re working on your business’s compliance.

New York Small Business Cooperative License

New York Cooperative Corporations Law

The holders of a New York small business cooperative license are allowed to acquire, possess, cultivate, process, and sell marijuana from the licensed premises of the adult-use cooperative by a licensee to duly licensed distributors, retail dispensaries, and on-site consumption sites. However, they cannot work directly with consumers.

With this being the case, obtaining a New York small business cooperative license involves the cooperative complying with these demands:

  • Cooperative must be made up of New York state residents as a limited liability company or limited liability partnership in accordance with the state’s laws, or another appropriate business structure as outlined and permitted by the board.
  • Cooperative must have subordinate capital that can both control the cooperative’s activities and for the purpose of the pecuniary benefits that come from the cooperative ownership.
  • Cooperative must be democratically controlled by the members themselves with each member maintaining power over one vote.
  • Cooperative must vest in and distribute with priority to and between the members of all increases that come about during their cooperative’s activities in accordance with the members’ active participation in the cooperative activity.
  • Cooperative must operate using the seven cooperative principles the International Cooperative Alliance published in 1995.

How to Become a Member of a Small Business Cooperative

For someone to become a cooperative member, they must comply with these requirements:

  • Must be a natural person
  • Cannot hold membership in more than one small business adult-use cooperative licensed in accordance with the Act.
  • Cannot have any direct or indirect financial or controlling interest in other adult-use cannabis licenses issued in accordance with the Act.

Small business adult-use cannabis cooperative licensees cannot have a direct or indirect interest in any premises licensed as adult-use cannabis retail dispensaries or in any operations licenses as an adult-use cannabis retail dispensary in accordance with the Act. This includes but is not limited to stock ownership, interlocking directors, personal or real property, and indirect interest.

It’s essential for the Board to promulgate regulations that govern cooperative licenses. This includes but isn’t limited to establishing canopy limits on the scope and size of cooperative licensees, along with other measures that incentivize the licensure and use of cooperatives.

New York Small Business Cooperative License

Thinking about getting your New York small business cooperative license? Think about how you’ll structure your cooperative to make the most out of it.

Cooperatives have the potential to become impressively successful with the right efforts. As you consider how to structure your cooperative and who you’d like to include in its activities, remain up to date on legislative changes in New York to ensure you have everything you need to get your small business cooperative license.

If you loved this article, make sure to check out our other post about how to open a dispensary in New York.