RETAIL CANNABIS POSSIBILITIES FOR NEW YORKUNDER THE COMPASSIONATE CARE ACT

Adam ScavoneScavone Law Firm

adam@scavonelaw.comph. (518) 312-0987

There has been a lot of misreporting on the Compassionate Care Act.

A rumor spread that there would be a maximum of twenty dispensaries in all of New York State.

“The law limits the number of [registered organizations] with dispensing sites in New York to five, with no more than four dispensing sites wholly owned and operated by each RO.”

- Francis J. Serbaroli, Esq.Partner, Greenberg Traurig LLPin the New York Law JournalA Primer on New York’s Medical Marijuana Law

published July 22, 2014

INCORRECT.

The text of the Compassionate Care Act does not put a ceiling on the number of dispensaries.

It only limits vertically integrated dispensaries –those that are wholly owned and operated by the holders of cultivation licenses.

CCA Section 3365(9)

The Commissioner shall register no more than five registered organizations that manufacture medical marihuana with no more than four dispensing sites wholly owned and operated by such registered organization.

- AND -

The Commission[er] may register additional registered organizations.

The first part creates five cultivation licenses, but (confusingly) refers to these as “registered organizations that manufacture medical marihuana.” We’ll call these “cultivation licenses.”

It then caps the number of “dispensing sites” that are wholly owned and operated by the holder of “cultivation licenses.”

That last part of Section 3365(9) –

The Commission[er] may register additional registered organizations.

requires us to ask, what other “registered organizations” are there?

CCA Section 3364

A registered organization shall be a for-profit business entity or not-for-profit corporation organized for the purpose of acquiring, possessing, manufacturing, selling, delivering, transporting, distributing ordispensing marihuana for certified medical use.

These are all categories of licenses that the Commissioner could issue, alone or in combination. A delivery-only license. A dispensing-only license. A manufacturing-and-dispensing license (max five). A selling-and-distributing license.

THE COMMISSIONER OF HEALTH HAS VIRTUALLY

UNLIMITED AUTHORITY TO CREATE RETAIL-ONLY

LICENSES.

THE QUESTIONS ARE

(1) WHETHER HE KNOWS HE HAS THE AUTHORITY, (2) WHETHER HE WILL EXERCISE THAT AUTHORITY.

If the Commissioner were persuaded to authorize a class of retail-only dispensaries, it would likely represent an opportunity to sell cannabis at wholesale to those dispensaries.

LOBBYING IMPLICATIONS

Patient access via retail locations depends entirely on the Commissioner.

The Commissioner needs to know that he has the authority to create a class of retail-only

dispensary licenses, and he needs to exercise that authority.

MANY SMART PEOPLE HAVE OVERLOOKED THE

POSSIBILITY THAT THIS IS POSSIBLE UNDER THE

LAW.

It’s possible that the Commissioner and his staff are among them.

QUESTIONS?

adam@scavonelaw.comph. (518) 312-0987