NEW BUSINESS OPPORTUNITIES IN THE NEW YORK CANNABUSINESS SPACE PART 3 – PREFERENCES FOR LICENSES

The “Cannabis Regulation and Taxation Act” should take effect on the first of April,
2020. There are plenty of new business opportunities in the New York cannabusiness
space and our legal team is gearing up for these exciting new ventures. These
businesses will need to be regulated by the Division of Alcoholic Beverage Control’s
new State Office of Cannabis Management. Our legal team is experienced representing
businesses in front of the State Alcoholic Beverage Control’s State Liquor Authority and
is well-positioned to hit the ground running for licensing and other regulatory issues. The
law anticipates that the same qualifications for on-premises consumption of alcoholic
beverages (restaurants and bars) will apply to retail establishments for on-premises
cannabis consumption.

MBE, WBE, Disadvantaged Farmers and Incubators all are given special consideration.
The law is drafted to favor small business and give special consideration to license
applications.

MINORITY-OWNED BUSINESSES

Under Article 15-A of the Executive Law, an MBE is a business enterprise in which at
least fifty-one percent (51%) is owned, operated and controlled by citizens or permanent
resident aliens who are meeting the ethnic definitions listed below:

 Black: Persons having origins from any of the Black African racial groups.
  Hispanic: Persons of Mexican, Puerto Rican, Dominican, Cuban, Central or
South American descent of either Native American or Latin American origin,
regardless of race.
 Asian-Pacific: Persons having origins from the Far East, Southeast Asia or the
Pacific Islands.
 Asian-Indian Subcontinent: Persons having origins from the Indian subcontinent.

 Native American or Alaskan Native: Persons having origins in any of the original
peoples of North America.

WOMEN-OWNED BUSINESSES

Woman-Owned Business Enterprise (WBE) and MWBE Under New York Executive
Law Article 15-A is a business enterprise in which at least fifty-one percent (51%)
is owned, operated and controlled by citizens or permanent resident aliens who
are women. The ownership must be real, substantial and continuing, and the minority
members and/or women must exercise the authority to independently control the day-to-
day business decisions. Each minority or woman owner upon whom certification is
based cannot have a personal net worth exceeding $3.5 Million after allowable
deductions. These are allowable deductions under the law: Primary residence or the
mortgage for that residence, Ownership interest in the applicant firm and Up to $500
thousand of any qualified retirement savings plan. Firms must not employ more than
300 individuals.  The firm must operate independently of other firms, must demonstrate
it is an active business and generally, the business must be in operation for at least one
year. Out of state applicants should be certified as a MWBE in their home state, if a
similar process exists, before applying for MWBE certification in New York State.

DISADVANTAGED FARMERS

Under USDA regulations, a socially disadvantaged farmer comes from (or entity who is
owned at least 50% by) one of the following identified groups:

 American Indians or Alaskan Natives
 Asians
 Blacks or African Americans
 Native Hawaiians or other Pacific Islanders
 Hispanics

APPLICANTS THROUGH THE INCUBATOR PROGRAM

Incubators work with companies to not only develop their ideas and concepts to
production to distribution cycle. They essentially help cannapreneurs commercialize
their business plan.

Please feel free to contact our team if you are a cannapreneur and want to discuss a
new business opportunity in the cannabusiness space.

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