United States: Cannabis On A Craft Scale: "Microbusiness" License Opens Pathways To Growing Industry

You likely have heard of a craft brewery before. But what about a craft business for cannabis and cannabis products? Enter the "microbusiness": a unique opportunity for those without access to significant capital to enter New York's burgeoning cannabis industry.

What is a microbusiness?

Think of it as a blend of the cultivator, producer and retailer licenses – on a smaller scale. A microbusiness license "authorizes the limited cultivation, processing, distribution, delivery, and dispensing of their adult-use cannabis and cannabis products." A microbusiness must comply with all requirements imposed on licensed producers, processors, distributors and retailers to the extent the microbusiness participates in that activity. A microbusiness "may only distribute its own cannabis and cannabis products to dispensaries." Like other licensees, it is subject to the rules and regulations promulgated by the Cannabis Control Board. Microbusinesses are required to "make laboratory test reports available to licensed distributors, retail dispensaries, and on-site consumption sites for all cannabis products" manufactured by the licensee.

How does a microbusiness license interact with other licenses?

"A microbusiness licensee may not hold any direct or indirect interest in any other license." Along the same lines, an adult-use cannabis retail dispensary, on-site consumption, and distributor license holder cannot have a direct or indirect interest in a microbusiness.

Are there regulations governing microbusinesses yet?

The implementation of rules and regulations for microbusiness licenses has taken a backseat to the Cannabis Control Board's focus on retail, processing and cultivation licenses. For those interested in opening a microbusiness, it may be an excellent time to begin thinking about how and where your microbusiness will operate.

Summer associate Jesse Goldberg contributed to this article.

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