NY Cannabis Distributor License Requirements Explained

What Is a NY Cannabis Distributor?

A distributor sits between processors and retailers.

No finished product reaches a dispensary without distributor authorization, documentation, and tax handling.

Distributors function as the regulated checkpoint in the supply chain.

What You’re Allowed to Do

A licensed distributor may:

• Receive finished cannabis products from licensed processors
• Store cannabis inventory in an approved, secure facility
• Transport products to licensed dispensaries or microbusinesses
• Verify packaging, labeling, and testing compliance
• Generate and manage manifests for every transfer
• Record all movement in METRC
• Collect and remit applicable state excise taxes

You are the compliance gatekeeper before retail.

Can a Distributor Sell Cannabis to Consumers?

No.

A distributor cannot sell directly to the public.

Retail sales are limited to licensed dispensaries.

Distributors operate strictly business-to-business.

What You Are NOT Allowed to Do

A distributor license does not allow:

• Retail sales
• Manufacturing or altering product
• Repackaging cannabis
• Moving product without a compliant manifest
• Using unregistered vehicles
• Storing product in unapproved locations
• Receiving product from unlicensed sources
• Combining this license with prohibited license types

Violations tied to transport, storage, or documentation can trigger suspension quickly.

Transport and Storage Requirements

Distributors must maintain continuous control over product.

Core requirements include:

• Locked and secure transport vehicles
• GPS tracking during transport
• Tamper-evident packaging
• Secure, access-controlled warehouse facilities
• A documented chain of custody for every transfer
• Written incident plans for loss, theft, or diversion

Security failures are enforcement triggers.

Distributor Tax Responsibility

Distributors are responsible for handling applicable cannabis excise taxes before product moves to retail.

If tax documentation is incorrect or incomplete, product cannot lawfully proceed through the supply chain.

You are the checkpoint for tax compliance.

Manifests and METRC Requirements

Every movement must be documented.

Distributors must:

• Create a manifest for each transfer
• Log origin, destination, vehicle, driver, and product details
• Record transfers and receipts in METRC
• Ensure physical inventory matches documentation
• Reconcile discrepancies immediately

If it is not in METRC, it did not happen.

Documentation is treated as proof of legality.

What Happens If You Get This Wrong?

Common distributor enforcement triggers:

• Missing or incomplete manifests
• Inventory mismatches
• Improper tax handling
• Unregistered transport vehicles
• Storing product in unapproved facilities
• Chain-of-custody gaps

Consequences may include:

• Product seizure
• Civil penalties
• Suspension
• License revocation

Distribution violations ripple across the supply chain.

What Operators Usually Miss

• Distributors are responsible for tax handling
• Product cannot move without proper manifest approval
• METRC accuracy is mandatory, not optional
• Storage must be approved and secure
• Documentation gaps equal compliance failures

Distribution is paperwork plus custody.

It is not optional administration.

When This Comes Up

• Applying for a distributor license
• Contracting with a distributor
• Structuring supply chain agreements
• Auditing METRC compliance
• Preparing for inspection
• Reconciling tax reporting

Related OCM Licensing Section Pages

• NY Cannabis Adult-Use Retail Requirements
• NY Cannabis Microbusiness Requirements
• NY Cannabis Processor Requirements
• NY Cannabis Cultivator Requirements
• NY Cannabis Delivery Delivery Requirments
• NY Cannabis Registered Organization (Medical) Requirements

Source Material‍

• Rules by License Type
• Licensing (OCM)
• Adult- Use Licensing

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