N.Y. Comp. Codes R. & Regs. tit. 9 § 124.2

Current through Register Vol. 46, No. 45, November 2, 2024

Section 124.2 - Terms of Sale

(a) Licensees engaged in distribution shall:

(1) execute written contracts between parties for all transactions related to the purchase of cannabis products, regardless of license type;

(2) sell cannabis and cannabis products, or cannabis merchandise or cannabis paraphernalia, at prices indicative of their true value when sold without any other products, terms, or services;

(3) not discriminate, directly or indirectly, in price, payment terms, or discounts for time of payment or in discounts on quantity of merchandise sold, except as permitted by this Part;

(4) be permitted to offer volume-based discounts on cannabis and cannabis products, provided that such discounts are offered to all licensed purchasers; and

(5) not require or offer exclusivity provisions in goods or services contracts, including, but not limited to, prohibiting a licensee from having their own e-commerce application or platform and

(6) not refuse to sell any brand of cannabis or cannabis product to any person authorized to purchase such brand of cannabis or cannabis product from such licensee at market value or based on price disclosures authorized by the Board if the purchaser pays cash therefor, and except as herein provided.

(b) Distributors, cooperatives, microbusinesses, ROND or ROD, shall sell cannabis products to any person authorized for retail adult-use cannabis sales willing to pay cash for such cannabis products, provided, however:

(1) checks shall not be from third parties;

(2) checks drawn on the account of a licensee authorized for retail sale shall not be postdated; and

(3) distributors, microbusinesses, cooperatives, ROD, or ROND shall not be required to accept checks drawn on a retail dispensary's account.

(c) Distributor, microbusiness, cooperatives, ROD, or ROND licensees may, but are not required to, accept payment on credit from licensees authorized for retail sales, provided:

(1) payment terms comply with this Part; and

(2) retail dispensaries and on-site consumption licenses purchasing cannabis products on credit pay their balance due within thirty (30) days, unless otherwise approved by the Board.

(d) Distributors, microbusinesses, cooperatives, RODs, or RONDs shall:

(1) report retailers who are delinquent in payment for cannabis products to the Office; and

(2) not sell cannabis products on credit to any retailer reported and found by the Office to have a delinquent payment due, as provided in this section.

(e) Delinquent List.

(1) Distributor, microbusiness, cooperative, ROD, or ROND licensees shall, on or before the respective notification dates, as determined by the Office, for each retail dispensary license, give written notice of default, by first class mail or by such other method as contemplated or permitted by or under the applicable agreement, to all such licensees therein who have failed to make payment to them on or before their final payment date for cannabis products sold or delivered to them during a credit period ending on their final payment date. No retail licensee shall be placed in default if the distributors, microbusinesses, cooperatives, ROD, or ROND has issued an account credit to the licensee, which after application to all debts owed by the retail dispensary licensee, is equal to or greater than the amount of the default. Any such retail dispensary licensee receiving a notice of default shall not thereafter purchase cannabis products, except for by paying with cash, until such time as the Office determines that their name shall not be published on the delinquent list as provided in subdivision (d) of this section, or until such time as the Office permits sales or deliveries to them as provided in subdivision (g) of this section. Each such distributor, microbusiness, cooperative, ROD, or ROND is hereby required to file with the Office, on or before each notification date, copies of the notices sent by them to all delinquent retail dispensary licensees as required in this subdivision, and in addition, if the Office shall so require, a written list setting forth the names and addresses of all such delinquent licensees. The Office, in its discretion, may extend for a period not exceeding three (3) days, the date for giving written notice of default to delinquent retail dispensary licensees and extend for three (3) days, the date for filing with the Office the copies of notices sent to such licensees and/or the written list of delinquent retail dispensary licensees as required in this subdivision. The Office, in its discretion, may limit the documents to be filed to those relating to licensees who are to be added or deleted from the default list and direct that distributors, microbusinesses, cooperatives, ROD, or ROND maintain copies of all other documents required under this section for future inspection by the Office.

(2) The Office shall, as soon as practicable after each notification date, compile and publish and furnish each distributor, microbusiness, cooperative, ROD, and ROND licensed under this Title, a list, to be designated on the delinquent list containing the names and addresses of all retail dispensary licensees who have been reported by distributors, microbusinesses, cooperatives, ROD, or ROND pursuant to the provisions of this section as having failed to make payment as required by this section for cannabis products sold or delivered to them, and no such distributors, microbusinesses, cooperatives, ROD, or ROND, on or after the fifth (5^th) day after the receipt of such delinquent list, shall knowingly, willfully, or intentionally sell or deliver any cannabis to any such licensee whose name appears on such list, except for cash, until such time as the name of such licensee is removed therefrom, except as hereinafter permitted.

(3) The receipt of a delinquent list by a distributor, microbusiness, cooperative, ROD, or ROND shall constitute knowledge of the names of the retail dispensaries licensees who have failed to make payment for cannabis as required by this section.

(4) The Office may publish the delinquent list on its website; provided, however, that full access shall be restricted to those distributors, microbusinesses, cooperatives, ROD, or ROND licensed under this Title and access to their specific status shall be provided to retail dispensaries licensed under this Title. Such publication shall be considered receipt thereof by all distributors, microbusinesses, cooperatives, ROD, or ROND.

(f) In the event that any dispute shall exist between any distributor, microbusiness, cooperative, ROD, or ROND and a retail dispensary licensee to whom they shall have sold cannabis products, either as to the fact of payment or as to the amount due for such cannabis products or as to the quantity of the cannabis products sold or delivered, which dispute cannot be resolved between them, the Office is hereby authorized to receive statements from each of the parties to such dispute as to the facts and circumstances thereof and to determine whether or not a retail dispensary licensee is delinquent and should be included on the appropriate delinquent list. The licensee may appeal this determination and request a hearing pursuant to Part 133 of this Title.

(g) The Office, in the case of a retail dispensary licensee who has made payment for cannabis products, or on good cause shown, may permit sales or deliveries to any retail dispensary licensee who has received notice of default, or who is named on any delinquent list, on terms other than for cash, but within the limitations of this section, prior to the publication of the next appropriate delinquent list.

(h) The Board may impose any penalty or condition otherwise authorized by this section in the case of any such retail dispensary licensee who fails or refuses to liquidate and pay unpaid balance becoming due under this subdivision.

(i) Nothing herein contained shall be construed to require any cultivator, processor, distributor, microbusiness, cooperative, ROD, or ROND to extend credit to any retail dispensary licensee nor to restrain any distributor, microbusiness, cooperative, ROD, or ROND from enforcing by legal action or otherwise, payment of any sum or sums of money due or alleged to be due to any such distributor, microbusiness, cooperative, ROD, or ROND for cannabis sold or delivered to any such retail dispensary licensee.

(j) The Office is hereby authorized to do such acts, prescribe such forms, and make such orders as it may deem necessary or proper to fully effectuate the provisions of this section, including, but not limited to, the changing of any date on which any act or function pursuant to this section is to be performed by any licensee or by the Office.

(k) The Board may revoke, cancel, or suspend any license issued pursuant to this Title for:

(1) actions in violation of any of the provisions of this section;

(2) making a false statement in any disclosures filed pursuant to this section; or

(3) failing or refusing in any manner to comply with any of the provisions of this section.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 124.2

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