N.Y. Comp. Codes R. & Regs. tit. 9 § 116.1

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

Section 116.1 - Definitions

For the purposes of this Part, the following terms shall have the following meanings:

(a)Act means the Marihuana Regulation and Taxation Act, Chapter 92 of the Laws of 2021.

(b)Aggregate ownership interest means the total ownership interest held by:

(i) a legal entity and any legal entity in its multilevel ownership structure; or

(ii) an individual and the spouse, domestic partner, civil union partner, child, sibling, or parent of such individual.

(c)Applicant means a person applying for a license under this Part.

(d)Board means the New York State Cannabis Control Board established pursuant to the Act.

(e)Bona fide labor organization means a local labor union:

(1) that represents employees in this state with regard to wages, hours and working conditions;

(2) in which officers have been elected by secret ballot or otherwise in a manner consistent with federal law; and

(3) that is free of domination or interference by any employer and has received no improper assistance or support from any employer.

(f)Conditional period means four years from the date the license is granted.

(g)Control means the power to order or direct the management, managers, or policies of a person.

(h)Eligible applicant means an applicant that satisfies all the required elements in section 116.4 of this Part.

(i)Financial institution means any bank, mutual savings bank, consumer loan company, credit union, savings and loan association, trust company, or other lending institution under the jurisdiction of the Department of Financial Services.

(j)Financial interest means any actual or future right to ownership, investment or compensation arrangement with another person, either directly or indirectly, through business, investment, spouse, parent or child. Person with a financial interest does not include a passive investor.

(k)Financier means any person, other than financial institution or government or governmental subdivision or agency, that provides capital as a gift, provides a grant, or lends capital pursuant to a secured or unsecured financing agreement. A financier may not receive an ownership interest, control of the business, a share of revenue, gross profits or net profits, a profit sharing interest, or a percentage of the profits in exchange for a gift, grant or loan, unless the financier receives prior approval from the Office.

(l)First renewal date means two years from the date the license is granted.

(m)Fund means a social and economic equity fund in which the state, any state agency, public authority, public benefit corporation, or division thereof has invested and is formed for the limited purpose of funding costs, which include, but are not limited to construction, renovations and equipment purchasing associated with establishing or developing adult-use cannabis operators.

(n)Justice involved means a person that satisfies the required elements in section 116.4(a)(2)(i) of this Part.

(o)License means a license issued pursuant to this Part and is conditioned on all requirements and prohibitions being met.

(p)Licensee means a person who has been granted a license to engage in the retail sale of cannabis products under this Part.

(q)Marihuana-related offense means a marihuana or cannabis offense defined under article two hundred twenty-one of the penal law prior to its repeal, any offense under article two hundred twenty or section 240.36 of the penal law prior to the effective date of article two hundred twenty-one of the penal law, where the controlled substance involved was marihuana, any offense that is eligible to be sealed or expunged pursuant to Chapter 131 of the Laws of 2019 or the Act or any offense identified by the Office to be a marihuana-related offense.

(r)Passive investor means a person that has an aggregate ownership interest of no more than five percent of the outstanding shares of an applicant or licensee whose shares are publicly traded, and such person does not have control over the applicant or licensee.

(s)Person means an individual, institution, corporation, government or governmental subdivision or agency, business trust, estate, trust, partnership or association, or any other legal entity.

(t)Primary residence means a dwelling where a person usually stays or stays more often than other locations with an intention to remain. The Office shall be authorized to select one or more, without limitation, of the following to verify an individual's primary residence:

(1) state or federal tax filing or return with proof of filing, including e-filing acknowledgements;

(2) a signed lease agreement, a property deed, a mortgage payment, or property tax statement that includes the individual's name;

(3) a letter addressed to the applicant from:

(i) the public housing authority in New York State or New York City;

(ii) a homeless shelter indicating the applicant currently resides at the homeless shelter;

(iii) a nonprofit organization or religious institution that provides services to homeless individuals, indicating the applicant's lack of permanent housing;

(iv) a domestic violence residential care program or organization that serves domestic violence survivors; or

(v) a charitable organization registered with the New York State Attorney General that provided services to the applicant and for which eligibility was established prior to the nineteenth of April, two-thousand twenty-one, attesting to residence.

(4) a voter registration card;

(5) jury summons, court order, or other document from a court within New York State;

(6) a government issued identification;

(7) a paycheck stub;

(8) a utility bill;

(9) a health institution or insurance company statement, bill, or record;

(10) a bank or credit card statement;

(11) a document addressed to the applicant by a local government in New York State; or

(12) any other proof of residency as determined by the Office.

(u)Qualifying business means a business as defined in section 116.4(a)(2)(iii) of this Part.

(v)Regional geographic zones means the zones established by the Office which represent the geographic area where conditional adult-use retail dispensaries will be located.

(w)True party of interest

(1) includes, but is not limited to the following:

(i) applicant or licensee's sole proprietor, partner (whether limited or general), member, manager, president, vice president, secretary, treasurer, officer, board member, trustee, director, or a person with equivalent title to each of the foregoing;

(ii) stockholder of applicant or licensee, other than a passive investor;

(iii) each person that makes up the ownership structure of each level of ownership for an applicant or licensee that has a multilevel ownership structure;

(iv) person with a right to receive some or all of the revenue, gross profit, or net profit from the licensed business during any full or partial calendar or fiscal year;

(v) person with a financial interest in the applicant or licensee;

(vi) person that has authority to or exercises control over the applicant or licensee;

(vii) person that has membership rights in the applicant or licensee in accordance with the provisions of any articles of incorporation, bylaws, limited liability corporation agreements, partnership agreements, or operating agreement;

(viii) person that assumes responsibility for the debts of the applicant or licensee; or

(ix) spouse of any individual in sections 116.1(w)(1)(i) through 116.1(w)(1) (iii) of this part.

(2) does not include a person that, without limitation:

(i) receives payment for rent on a fixed basis under a lease or rental agreement relating to applicant or licensee. Notwithstanding, if there is a common ownership interest between applicant or licensee, and the entity that owns the real property, the Office may investigate all funds associated with the landlord to determine if the landlord is a financier. The Office may also investigate a landlord in situations where a rental payment has been waived or deferred;

(ii) receives a bonus or commission from the applicant or licensee based on the individual's sales, so long as the commission does not exceed ten percent of the sales of the applicant or licensee in any given bonus or commission period, unless otherwise determined by the Office. Commission-based compensation agreements must be in writing;

(iii) contracts with the applicant or licensee to receive a commission for the sale of the business or real property;

(iv) consults receiving a flat or hourly rate of compensation from the applicant or licensee under a contractual agreement;

(v) has an option to purchase the applicant or licensee, in the event the applicant or licensee is not an individual, or conditional adult-use retail dispensary, so long as no money has been paid under an option contract or agreement for such purchase or sale;

(vi) has a contract or agreement for services with an applicant or licensee, such as a branding or staffing company, as long as the applicant or licensee retains the right to and controls the business;

(vii) is a financial institution; or

(viii) is a passive investor.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 116.1

Adopted New York State Register August 3, 2022/Volume XLIV, Issue 31, eff. 8/3/2022