When Does a Goods & Services Provider Become a TPI in NY Cannabis?

What Counts as a Goods & Services Provider?

A G&S provider includes anyone offering work or support to a licensee, including:

• Consultants
• Contracted operators
• Management companies
• Operations, HR, or compliance firms
• Marketing, branding, or product partners involved in cannabis activities
• Supervisors or advisors with recurring responsibilities
• Vendors involved in plant-touching or regulatory activities

If the provider touches cannabis operations, compliance, revenue, or management, the agreement will be reviewed closely.

Provider Classifications Under OCM

OCM generally evaluates providers in two categories.

Non-Exempt Providers

These typically:

• Consult on cannabis operations
• Influence management, compliance, or business decisions
• Handle day-to-day functions

Their agreements are heavily scrutinized for control.

Exempt Providers

These usually do not trigger TPI status unless compensation or authority crosses thresholds.

Examples include:

• Landlords
• Attorneys
• Accountants
• Part-time CFOs
• Lenders
• Insurance brokers
• Administrative vendors

Exempt status is not automatic protection.

If compensation or authority resembles ownership or control, they may still qualify as TPIs.

When a G&S Provider Becomes a TPI

A provider becomes a True Party of Interest if:

• Compensation exceeds financial thresholds
• They influence business decisions
• They have approval or veto rights
• Agreements affect ownership, management, or operations
• Contracts include percentage-based compensation tied to revenue or margins
• They hold leverage resembling ownership or control

OCM evaluates substance over title.

If an agreement resembles profit sharing or operational control, TPI disclosure is likely required.

The 10 / 50 / 250 Rule

OCM uses financial thresholds to determine TPI status.

A person becomes a TPI if they receive more than the greatest of:

• 10% of gross revenue
• 50% of net profits
• $250,000 in total annual payments

This applies to all compensation forms, including:

• Flat service fees
• Monthly retainers
• Revenue share
• Profit share
• Commissions
• Performance bonuses
• In-kind compensation
• “Stacked” agreements with related parties

OCM reviews the full economic relationship, not just one contract.

Agreement Types That Raise TPI Concerns

The following commonly trigger TPI review:

• Management agreements handling daily operations
• Consulting agreements tied to revenue or profit
• Percentage-based marketing or brand partnerships
• Product partnerships requiring approval rights
• Exclusive agreements controlling key decisions
• Contracts granting veto power over hiring, pricing, or spending
• Licensing agreements dictating operations
• “Turnkey” or operator-in-a-box models
• Bundled agreements combining multiple services

If the agreement grants ongoing influence, it may require disclosure.

What Must Be Disclosed to OCM

Applicants and licensees must upload:

• The full agreement and any related agreements
• Compensation details and formulas
• Scope of work
• Ownership information for entity providers
• Loan or financing terms tied to the arrangement
• Modifications, renewals, and addendums

Redacted or partial documents often trigger deficiency notices.

How OCM Reviews G&S Agreements

OCM examines:

• Whether the provider influences cannabis operations
• Whether compensation crosses the 10 / 50 / 250 thresholds
• Whether the arrangement resembles ownership or control
• Whether agreements violate vertical or horizontal ownership limits
• Whether separate contracts create hidden financial interest
• Whether disclosures are complete in the TPI Portal

OCM evaluates the entire relationship, not individual clauses.

When Exempt Providers Become TPIs

Even exempt providers may qualify as TPIs if:

• Compensation exceeds thresholds
• They receive revenue-based pay
• They gain approval or decision-making authority
• Agreements bind or restrict business operations
• They hold rights normally associated with owners or managers

Exempt status does not override financial or control thresholds.

When You Must Update the TPI Portal

You must update disclosures when:

• A new G&S agreement is signed
• Compensation terms change
• A contract is terminated or replaced
• Additional services are added
• A provider begins consulting on operations
• Any term affects revenue, profit, or control

Failure to update the TPI Portal is a compliance violation.

Common Operator Mistakes

Operators frequently:

• Misclassify non-exempt providers as exempt
• Use percentage-based fees that unintentionally trigger TPI status
• Omit connected or “stacked” agreements
• List entities but not individuals behind them
• Provide vague descriptions of work
• Upload incomplete documents
• Fail to update after renegotiations

Key Terms

Goods & Services (G&S) Provider
A person or entity offering operational, financial, or compliance support to a cannabis licensee.

True Party of Interest (TPI)
A person or entity meeting ownership, control, or financial thresholds under OCM rules.

10 / 50 / 250 Rule
Financial thresholds triggering TPI status when compensation exceeds 10% of gross revenue, 50% of net profits, or $250,000 annually.

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Related TPI Section Pages

• TPI Portal Guide
• TPI Disclosure Requirements
• Ownership & Control Restrictions
• TPI Changes & Updates
• TPI Main Page

Source Material

• OCM TPI Hub
• Goods & Services FAQ
• TPI Portal Instructions & FAQ
• TPI Portal (Individual, Entity, Applicant)
• Retailer TPI FAQ
• Supply TPI FAQ
• Interim TPI Change Request Guidance

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