N.Y. Comp. Codes R. & Regs. tit. 9 § 113.6

Current through Register Vol. 46, No. 36, September 4, 2024

Section 113.6 - Application for Initial Registration as a Registered Organization

(a) No person shall produce, grow, or sell medical cannabis or hold itself out as a New York State registered organization unless it has complied with Article 3 of the Cannabis Law, this Part, and is registered by the Board.

(1) An application for initial registration as a registered organization shall include no more than four dispensing sites that will be wholly owned and operated by such registered organization in accordance with Subdivision 8 of Section 35 of the Cannabis Law.

(2) Additional dispensing sites beyond the initial four shall be subject to the requirements set forth in subdivision (h) of section 113.7 of this Part.

(b) In order to operate as a registered organization, an entity shall file an application on forms or in a manner prescribed by the Board. The application shall be signed by the chief executive officer duly authorized by the board of a corporate registered organization applicant, or a general partner or owner of a proprietary registered organization applicant. The application shall set forth or be accompanied by the following:

(1) the name, address, phone and email address of the registered organization applicant;

(2) identification of all real property, buildings and facilities that will be used in manufacturing, as defined in section 113.1 of this Part, or dispensing of the medical cannabis products, including confirmation that the real property, buildings and facilities used for dispensing are not within five hundred feet of school grounds as such term is defined in the Education Law or two hundred feet from a house of worship;

(3) identification of equipment, as determined by the Board in the application, that will be used to carry out any manufacturing, processing, transportation, distributing, sale and dispensing activities;

(4) a business plan that includes a description of the activities, authorized by Article 3 of the Cannabis Law, to be conducted by the registered organization applicant. In addition, the plan shall include a description detailing how the registered organization applicant proposes to provide services to areas of the state, unserved or underserved as, in accordance with section 35 of the Cannabis Law; a description containing details of how the registered organization applicant proposes: to be reflective of the demographics of the state, to be representative of communities disproportionally impacted by cannabis prohibition, as set forth in guidance by the Office. Unless waived by the Board, the plan shall include, to the satisfaction of the Office, the following information;

(i) executive summary;

(ii) entity description;

(iii) description of the medical cannabis products and devices to be offered or sold;

(iv) services to be offered by the registered organization applicant;

(v) market analysis;

(vi) implementation strategy; and

(vii) any other information requested by the Office:

(5) a standard operating procedure manual for all proposed manufacturing activities. Manufacturing procedures shall include use of good agricultural practices (GAPs) for cultivation, as well as good manufacturing practices (GMPs) in accordance with Parts 111 or 117 of Title 21 of the Code of Federal Regulations, as appropriate for the type of medical cannabis product being manufactured and as otherwise determined appropriate by the Office. All procedures must conform to all applicable state rules, regulations, and laws as amended. In addition to all proposed manufacturing activities, standard operating procedures must address:

(i) medical cannabis product returns;

(ii) complaints;

(iii) adverse events, with notification to the Office within 24 hours of any serious adverse events;

(iv) recalls;

(v) storage and disposal of cannabis and any medical cannabis product not meeting testing requirements set forth in section 113.15 of this Part;

(vi) any other procedures as determined by the Office.

(6) quality assurance program with quality assurance officer oversight, including but not limited to plans to detect, identify and prevent manufacturing and dispensing incidents, to track contamination incidents and document the source of such incidents, and to conduct corrective action for these incidents;

(7) description of systems to be used for tracking, record keeping, record retention and reporting surveillance relating to all activities involving medical cannabis;

(8) an attestation that the registered organization applicant will submit seed to sale data from their system of record to the Office in a format as determined by the Office;

(9) copies of the organizational and operational documents of the registered organization applicant, including but not limited to, as applicable: organizational charts, capitalization tables, certificate of incorporation, partnership agreement, and any other documents and/or agreements requested by the Office;

(10) the name, residence address and title of each of the board members, officers, managers, owners, partners, principal stakeholders, directors and any person or entity that is a member of the registered organization applicant. Each such person (if an individual, or lawful representative, if a legal entity) shall submit an affidavit with the application setting forth:

(i) any position of management, interest or ownership during the preceding ten (10) years of a ten (10) percent or greater interest in any other cannabis business, or registered organization applicant, located in or outside New York State, manufacturing or distributing drugs including indirect management, interest, or ownership of parent companies, subsidiaries, or affiliates; and

(ii) whether such person or any such business has been convicted of a felony or had a registration or license suspended or revoked in any administrative or judicial proceeding, and if applicable, the history of violations or administrative penalties with respect to any license to cultivate, manufacture, distribute or sell adult-use cannabis or medical cannabis. In addition, any managers who are a member of the registered organization applicant or entity that is a member of the registered organization applicant who may come in contact with or handle medical cannabis, including medical cannabis products, shall be subject to a fingerprinting process as part of a criminal history background check in compliance with the procedures established by Division of Criminal Justice Services and submission of the applicable fee;

(11) documentation that the registered organization applicant has entered into a labor peace agreement, as required by section 35 of Article 3 of the Cannabis Law, with a bona-fide labor organization that is actively engaged in representing or attempting to represent the registered organization applicant's employees prior to the issuance of the registration. The maintenance of such a labor peace agreement shall be an ongoing material condition of registration;

(12) a statement that the registered organization applicant shall comply with all applicable state and local laws and regulations relating to the activities in which it intends to engage under the registration;

(13) copies of all applicable executed and proposed deeds, leases, and rental agreements or executed option contracts related to the organization's real property interests, that shows that the registered organization applicant possesses or has the right to use sufficient land, buildings, and other premises as specified in the application and equipment to properly carry on the activities for which registration is sought. In the alternative, the registered organization applicant shall post a bond of not less than two (2) million dollars; provided, however, that if the registered organization applicant posts a bond in lieu of providing the documentation requested herein, the registered organization applicant's submission of the applicable executed deeds, leases and rental agreements shall be required prior to the issuance of a registration to the registered organization applicant, if selected; In accordance with the social-equity plan established pursuant to section 87 of the Cannabis Law, the Board may waive such requirements when the registered organization applicant is a social and economic equity applicant, provided, however, that prior to issuance of the registration, the registered organization applicant must submit to the Office, copies of all applicable executed and proposed deeds, leases, and rental agreements or executed option contracts related to the organization's real property interests, and, provided further that whenever any registered organization applicant proposes to lease a premises for the activities described in its operating plan, the lease agreement shall clearly set forth as a purpose the manufacturing and/or dispensing of medical cannabis, as applicable, and include the following language: "The landlord acknowledges that its rights of reentry into the premises set forth in this lease do not confer on it the authority to manufacture or dispense on the premises medical cannabis in accordance with Article 3 of the Cannabis Law and agrees to provide the New York State Office of Cannabis Management with notification by certified mail, to its principal office, of its intent to reenter the premises or to initiate dispossess proceedings or that the lease is due to expire, at least thirty (30) days prior to the date on which the landlord intends to exercise a right of reentry or to initiate such proceedings or at least sixty (60) days before expiration of the lease.";

(14) a financial statement setting forth all elements and details of any business transactions connected with the application, including but not limited to all agreements and contracts for consultation or arranging for the assistance in preparing the application;

(15) a proposed construction timetable;

(16) a statement as to whether the registered organization applicant, any controlling person of the registered organization applicant, any manager, any sole proprietor registered organization applicant, any general partner of a partnership applicant, any officer and member of the board of directors of a corporate applicant, and corporate general partner had a prior discharge in bankruptcy or was found insolvent in any court action;

(17) if any controlling person of the registered organization applicant maintains a ten (10) percent interest or greater in any firm, association, foundation, trust, partnership, corporation, or other entity or if such entity maintains a ten (10) percent interest or greater in the registered organization applicant, and such entity will or may provide goods, leases, or services to the registered organization, the value of which is or would be five hundred dollars or more within any one (1) year, the name and address of the entity shall be disclosed together with a description of the goods, leases or services and the probable or anticipated cost to the registered organization;

(18) if the registered organization applicant is a corporate subsidiary or affiliate of another corporation, disclosure of the parent or affiliate corporation including the name and address of the parent or affiliate, the primary activities of the parent or affiliate, the interest in the registered organization applicant held by the parent or affiliate and the extent to which the parent will be responsible for the financial and contractual obligations of the subsidiary;

(19) the most recent certified financial statement of the registered organization applicant, audited by an independent certified public accountant and prepared in accordance with generally accepted accounting principles (GAAP) applied on a consistent basis, including a balance sheet as of the end of the registered organization applicant's last fiscal year and income statements for the past two (2) fiscal years, or such shorter period of time as the registered organization applicant has been in operation;

(20) if construction, lease, rental or purchase of the manufacturing or dispensing site has not been completed, a statement indicating the anticipated source and application of the funds to be used in such purchase, lease, rental or construction;

(21) a staffing plan for staff involved in activities related to the cultivation of cannabis, the manufacturing or dispensing of medical cannabis products or staff with oversight responsibilities for such activities, which shall include:

(i) a senior staff member with a minimum of one (1) year experience in good agricultural practices (GAP);

(ii) a quality assurance officer who shall exercise oversight of the organization's practices and procedures and who has documented training and experience in quality assurance and quality control procedures;

(iii) a requirement that all staff be eighteen (18) years of age or older. Any employee eighteen (18) years of age or older and under twenty-one (21) years of age may not have direct interaction with customers inside a registered organization's dispensing site;

(iv) a requirement that all staff involved in the manufacturing of medical cannabis be trained in and conform to general sanitary practices; and

(v) policies and procedures to ensure that the registered organization shall not be managed by or employ anyone who has been convicted within three (3) years of the date of hire, of any felony related to the functions or duties of operating a business, unless the Office determines that the manager or employee is otherwise suitable to be hired as set forth in section 34 subdivision 7 of Article 3, or section 137 of the Cannabis Law;

(22) an environmental sustainability program plan for medical cannabis product packaging, which may include, but is not limited to, strategies to collect reusable medical cannabis packaging components, sustainable packaging strategies that use non-plastic, compostable or recyclable materials, or packaging materials exceeding 25% post-consumer recycled content; and

(23) any other information as may be required by the Office.

(c) An application under this section may be amended while the application is pending before the Board, if approved by the Board upon good cause shown.

(d) The registered organization applicant shall verify the truth and accuracy of the information contained in the application. The Board, in its discretion, may reject an application if it determines that information contained therein is not true and accurate.

(e) A registered organization applicant and registered organization shall have an obligation to ensure that the information, documentation, attestations, and assurances submitted to the Office are not fraudulent, false, or misleading.

(f) The information furnished in an application and in any supplemental statement related thereto shall be presumed correct and shall be binding upon a registered organization as if correct. All information furnished in an application or supplemental statement shall be deemed material in:

(1) any prosecution for perjury;

(2) any proceeding to suspend, cancel or revoke a registration or impose a fee or other penalty; and

(3) the approval or denial of a registration.

(g) A registered organization applicant shall identify any conflict of interest, including, without limitation, any relationship or affiliation of the registered organization applicant that currently exists with any member, employee, consultant or agent of the Office or the Board. The conflict of interest may be actual or perceived. If any conflict of interest should arise during the term of the application process, the registered organization applicant shall notify the Office in writing of such conflict.

(h) Only complete applications may be processed. The processing of an application shall not constitute an acknowledgment that the requirements of the Cannabis Law and this subchapter have been satisfied.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 113.6

Adopted New York State Register February 22, 2023/Volume XLV, Issue 08, eff. 2/22/2023