N.Y. Comp. Codes R. & Regs. tit. 9 § 121.1

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

Section 121.1 - Qualifications for a Social and Economic Equity Applicant

(a) General Qualifications

To qualify as a social and economic equity applicant, an applicant shall demonstrate, through the mandatory production of documents and other information described in this Part:

(1) that sole control of the applicant is held by:

(i) an individual from a community disproportionately impacted by the enforcement of cannabis prohibition;

(ii) a minority-owned business;

(iii) a women-owned business;

(iv) a distressed farmer; or

(v) a service-disabled veteran owned business.

(2) that any person seeking to contribute to sole control of the applicant must hold at least 1% equity share in the business.

(b) If sole control of the applicant is held by a woman who is also a minority-group member or women who are also all minority group members, the applicant may qualify as a minority-owned business, a women-owned business, or both.

(c) Request for information. An applicant must provide any information requested by the Office to determine eligibility as a social and economic equity applicant.

(d) Individuals from communities disproportionately impacted by the enforcement of cannabis prohibition. An applicant seeking to qualify as an individual from a community disproportionately impacted are required to meet the following requirements:

(1) ownership and sole control over the applicant by one (1) or more individuals from communities disproportionally impacted as set forth in subdivision (e) of this section; and

(2) one (1) or more individuals that have an ownership interest in the business have resided in a community disproportionately impacted for an aggregate of five (5) of the first eighteen (18) years of their life or an aggregate of seven (7) years of their life. The Office may take into consideration a break in residency in determining whether an applicant meets the residency requirement, due to the following factors, which include but are not limited to:

(i) incarceration,

(ii) education,

(iii) illness,

(iv) foster care,

(v) custodial matters, or

(vi) homelessness.

(e) For the purposes of determining whether an area is a community disproportionately impacted, the Office may review geographic areas, such as precincts, zip codes, neighborhoods, political subdivisions, and any other geographic area for:

(1) history of arrests;

(2) number of convictions;

(3) law enforcement procedures, protocols and practices;

(4) allocation of law enforcement resources; or

(5) children removed from the home by Child Protective Services, or equivalent child protective services for out-of-state jurisdictions, due to:

(i) a parent/caretaker's marihuana use or arrest;

(ii) school suspension records;

(iii) high school attainment;

(6) deportation records for marihuana offenses; or

(7) any other impacts as determined by the Office reflecting relative disparate enforcement of cannabis prohibition laws during a certain period of time in a certain geographic area.

(f) Minority-Owned Business. An applicant seeking to qualify as a minority-owned business shall meet the following requirements:

(1) ownership and sole control by one (1) or more minority group members who have an ownership interest in the business as set forth in section 121.2 of this Part; and

(2) at least one (1) of the following:

(i) a state MWBE certification, on the basis of being a minority-owned business; or

(ii) a sworn declaration that reports the applicant's qualifications to be true and accurate, made under penalties provided by law, that:

(a) one (1) or more members are of a minority group who are citizens or permanent resident aliens of the United States of America:

(1) have an ownership interest in the business; and

(2) qualify as minority group members as defined in the Cannabis Law; and

(b) that the applicant understands that providing false information shall be grounds for action against the applicant or licensee, including, but not limited to, the denial, suspension, cancellation or revocation of a license.

(g) Women-owned Business. An applicant seeking to qualify as a women-owned business shall meet the following requirements:

(1) ownership and sole control by one (1) or more women who have an ownership interest in the business as set forth in section 121.2 of this Part; and

(2) at least one (1) of the following:

(i) a state MWBE certification, on the basis of being a women-owned business; or

(ii) a sworn declaration that reports the applicant's qualifications to be true and accurate, made under penalties provided by law, that:

(a) one (1) or more members of are of a woman group who are citizens or permanent resident aliens of the United States of America:

(1) have an ownership interest in the business; and

(2) qualify as a women owned business as defined in the Cannabis Law; and

(h) Distressed Farmer. An applicant seeking to qualify as a distressed farmer shall meet the following requirements:

(1) ownership and sole control by one (1) or more members who have an ownership interest as set forth in section 121.2 of this Part; and

(2) the applicant fulfills at least one (1) of the following requirements:

(i) where the farm meets the small farm classification as defined in section 87 of the Cannabis Law and such small farm:

(a) filed a Schedule F tax return;

(b) filed other tax form(s) demonstrating revenues below the qualifying threshold as established therein; and

(c) documented operating losses during the last three (3) years.

(ii) where the farming operations of the operator seeking to qualify under this subdivision meets the small farm classification as defined in section 87 of the Cannabis Law and such small farm operator:

(a) is a producer, which means they are:

(1) an individual who is involved in making decisions for the farm operation involving planting, harvesting, livestock management, and marketing; or

(2) may be the owner, a member of the owner's household, a hired manager, a tenant, a renter, or a sharecropper.

(b) capable of presenting documentation showing they meet the requirements of being a producer, which includes but is not limited to, the following:

(1) local, state, and federal tax documents;

(2) paystubs or proof of payroll;

(3) an employment agreement;

(4) a contracting agreement;

(5) a rental or sharecropping agreement; and

(6) any other documentation demonstrating such relationship.

(iii) membership in a group historically underrepresented in farm ownership as such group or groups may be defined by the Board, as provided by a sworn declaration that:

(a) one or more of the members that qualify as member of a group or groups identified by the Board to be historically underrepresented in farm ownership; and

(b) that providing false information shall be grounds for action, including, but not limited to, the denial, suspension, cancelation or revocation of a license.

(i) Service-disabled veteran owned business. An applicant seeking to qualify as a service- disabled veteran owned business shall meet the following requirements:

(1) ownership and sole control by one (1) or more members who have an ownership interest as set forth in section 121.2 of this Part; and

(2) certification from the New York State Office of General Services Division of Service-Disabled Veterans' Business Development (DSDVBD). In the event that a business does not receive certification from the DSDVBD prior to the filing of any application, the Office may temporarily accept the following document as a conditional certification:

(i) DD214(s) and/or NG214(s) with Line of Duty Report U.S. Veterans Administration documentation of service-connected disability rating which shall be dated within one (1) year of the date DSDVBD receives the DSDVBD Certification Application and shall demonstrate a service-connected disability rating of at least 10%. Any such conditional certification shall be valid for sixty (60) days pending full certification from the DSDVBD and may be extended in the Office's sole discretion.

(j) Small Business Qualification. An applicant seeking to qualify as a minority-owned business or a women-owned business shall submit the following documents to demonstrate that it is a small business:

(1) if it has been in operation for a time greater than or equal to three (3) years:

(i) quarterly payroll reports from the last three (3) years; and

(ii) any other information that demonstrates that the entity is a small business as requested by the Office;

(2) if it has been in operation for a time less than three (3) years:

(i) a sworn declaration that reports the submitted information relating to its business enterprise to be true and accurate, and made under penalties provided by law, that:

(a) it is a small business as defined in this subdivision, and

(b) providing false information shall be grounds for action, including, but not limited to, the denial, suspension, cancelation or revocation of a license; and

(ii) documentation of small business operations, including, but not limited to:

(a) any and all gross quarterly receipts;

(b) by-laws; and

(c) information that the business has no more than and will not exceed 300 employees.

(k) Extra Priority.

(1) A person who demonstrates that they are an individual from a community disproportionately impacted by the enforcement of cannabis prohibition may receive extra priority if:

(i) they have an income lower than eighty percent (80%) of the median income of the county in which the applicant resides; and

(ii) was convicted of a marihuana-related offense prior to the effective date of the Marihuana Regulation and Taxation Act, or had a parent, guardian, child, spouse, or dependent, or was a dependent of an individual who, prior to the effective date of the Marihuana Regulation and Taxation Act, was convicted of a marihuana-related offense.

(2) For purposes of this subdivision, median income is defined as the median dollar amount per household in each county, as based on the overall income distribution for the county, from lowest to highest income.

(3) An applicant seeking to qualify for extra priority shall provide proof of residency, income, and conviction, as prescribed by the Board.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 121.1

Adopted New York State Register September 27, 2023/Volume XLV, Issue 39, eff. 9/27/2023