NY Equity Rules Explained: MRTA Section 87–89: Social & Economic Equity (SEE), Data Reporting, and Rulemaking Authority

What Is Social & Economic Equity (SEE)?

New York law requires the State to prioritize equity-eligible applicants in the adult-use cannabis market.

The statewide target is that 50% of adult-use licenses be issued to equity-qualified applicants.

SEE status provides priority consideration.
It does not guarantee approval.

Who Qualifies as an Equity Applicant?

An applicant may qualify if they meet ownership and control requirements (typically 51%+ ownership and control) and fall into one of the following categories:

• Individuals from disproportionately impacted communities
• Minority-owned businesses (51%+ ownership and control)
• Women-owned businesses (51%+ ownership and control)
• Distressed farmers
• Service-disabled veterans

Additional priority factors may include:

• Residence in a disproportionately impacted community
• Household income below 80% of county median income
• Cannabis-related conviction history (applicant or immediate family member)

OCM evaluates both ownership structure and control — not just identity.

What Is a Disproportionately Impacted Community?

Generally, these are areas historically affected by high cannabis enforcement rates.

OCM uses enforcement and arrest data to identify these communities.

This is not a self-designation. Documentation is required.

What Support Must the State Provide?

New York must operate programs supporting equity applicants, including:

• Training and education
• Business counseling
• Small business development support
• Financial guidance
• Compliance assistance

These programs are required by statute but availability and funding levels may vary.

Can You Sell an Equity License?

There are restrictions.

An equity license generally cannot be transferred within the first three years unless:

• The buyer also qualifies as an equity applicant, or
• All State loans, grants, and related financial support are repaid

This affects:

• Exit strategy
• Investor planning
• Financing structures
• Long-term valuation

Equity status impacts liquidity.

What Data Does OCM Collect?

OCM must collect and report data on:

• Cannabis business ownership demographics
• Workforce demographics
• Market participation outcomes
• Diversity across license types

This data is published annually in required reports.

Your ownership and workforce information may be included in statewide reporting.

Who Has Regulatory Authority?

The Cannabis Control Board has authority to issue regulations implementing equity priorities.

This includes rules covering:

• Licensing standards
• Operational requirements
• Enforcement
• Product standards
• Advertising and marketing

Equity status does not exempt a licensee from compliance with these rules.

What Operators Usually Miss

• Equity priority does not mean guaranteed approval.
• Equity licenses have transfer restrictions that affect exits.
• Ownership changes can impact equity status.
• Repayment of State financial support may be required before transfer.
• Reporting and documentation still apply at renewal.

Equity is a structural designation — not just an application checkbox.

When This Comes Up

• Applying as a SEE or priority applicant
• Structuring ownership before filing
• Planning to bring on investors
• Considering sale or transfer of the license
• Preparing for renewal
• Evaluating long-term exit strategy

What Happens If You Ignore This

• Loss of equity priority
• Delays or denials tied to ownership structure
• Transfer restrictions blocking a sale
• Required repayment of State funds
• Increased scrutiny during renewal

Equity rules affect ownership, control, and long-term flexibility.

‍

Related MRTA Article 4 Section Pages

• Adult- Use Licensing Framework (Sections 61 - 67)
• Adult- Use License Types (Sections 68 - 75, 77)‍
• Municipal Notification Requirements (Section 76)‍
• Adult- Use Operations & SOP Requirements (Sections 78–86)‍
• MRTA Article 4 Main Section Page

Source Material

• MRTA Article 4, Sections 87- 89