NY Cannabis License Types and OCM Rules Explained

How OCM Licensing Works

The Office of Cannabis Management (OCM) issues specific license types for specific activities.

You must hold the correct license for:

• Cultivation
• Processing
• Distribution
• Retail
• Delivery
• Medical operations

Each license comes with its own:

• Operational limits
• Security standards
• Reporting rules
• Inventory controls
• Ownership restrictions

Operating outside your license type is a violation.

What License Scope Means

License scope controls:

• Whether you can grow, manufacture, transport, or sell
• How many locations you may operate
• Whether you can hold other license types
• How product moves through the supply chain
• Which compliance rules apply to you

You cannot combine license activities unless specifically permitted (such as a microbusiness).

Scope is enforced strictly.

Can You Operate Across the Supply Chain?

Generally, no.

New York separates the supply chain:

• Cultivators grow
• Processors manufacture
• Distributors authorize movement and handle tax
• Retailers sell
• Delivery transports prepaid orders

Unless you hold a license that explicitly combines functions (like microbusiness or medical Registered Organization), you must stay in your lane.

How OCM Enforces License Boundaries

OCM enforces licensing through:

• Application review and conditions
• Facility inspections
• METRC data analysis
• Financial and inventory audits
• Incident reporting
• Enforcement actions

Common triggers include:

• Acting like another license type
• Moving product outside approved channels
• Sharing inventory improperly
• Holding prohibited ownership interests
• Expanding activities without approval

License violations are not treated as technical errors.

Overview of NY Cannabis License Types

Adult-Use Retail

Sells cannabis to adults 21+ through a licensed storefront and approved delivery operations.

Microbusiness

Closed-loop license allowing limited cultivation, processing, distribution, and retail of self-produced products only.

Processor

Manufactures finished cannabis products from raw plant material.

Distributor

Transports, stores, documents, and transfers products between licensees and handles excise tax responsibilities.

Delivery

Transports prepaid cannabis orders from licensed retailers to adult-use customers.

Registered Organization (Medical)

Vertically integrated operators serving the medical cannabis program, with limited adult-use participation.

Each license has separate requirements and risks.

What Operators Usually Miss

• You cannot “add” activities without a license amendment
• Lease terms and buildout must match your license type
• METRC permissions differ by license
• Ownership rules restrict cross-licensing
• Violations often occur during expansion

Licensing is structural. Mistakes here ripple forward.

When This Comes Up

• Choosing which license to apply for
• Signing a lease
• Designing your facility
• Adding delivery or manufacturing
• Bringing on investors
• Expanding or restructuring
• During inspections or audits

What Happens If You Operate Outside Your License

Consequences may include:

• Application denial
• Fines
• Forced shutdown of unapproved activities
• Suspension
• Revocation
• Inability to renew or modify your license

Your license defines your legal boundary.

Stay inside it.

Related OCM Licensing Section Pages

• Adult-Use Retail License
• Microbusiness License
• Processor License
• Distributor License
• Cultivator License
• Delivery License
• Registered Organization (Medical)

Source Material

• Revised Adult- Use Regulations
• MRTA
• 9 NYCRR Part 123 (License specific authorizations, requirements, and prohibitions)