* § 69-a. Conditional adult-use processor license. 1. A conditional
adult-use processor license shall be subject to the same authorizations,
restrictions and requirements applied to any adult-use processor
pursuant to section sixty-nine of this article for the duration of the
conditional period of the license, as well as to any new terms and
conditions imposed by the board and office.

2. To be eligible to apply for a conditional adult-use processor
license, a processor must:

(a) have applied for a cannabinoid hemp processor license pursuant to
section ninety-two of this chapter before January first, two thousand
twenty-two;

(b) hold an active cannabinoid hemp processor license issued by the
office; and

(c) as an individual applicant have an ownership interest of fifty-one
percent or more, or as any other applicant have an ownership interest of
fifty-one percent or more of the entity that is the licensee.

3. A conditional adult-use processor license shall authorize the
processing and manufacturing of cannabis products provided the licensee
complies with all requirements for the processing and manufacture of
cannabis products as set out by the board. A conditional adult-use
processor licensee shall only perform extraction activities if
authorized to under the licensee's cannabinoid hemp processor license
and all extraction methods are subject to office approval.

4. A conditional adult-use processor licensee must comply with any
environmental standards and requirements as mandated by the office.

5. The processing of cannabis shall only be permitted at the same
location in which the conditional adult-use processor licensee is
authorized to process hemp, unless expressly authorized by the office.

6. A conditional adult-use processor licensee shall have the authority
to distribute cannabis products without holding an adult-use distributor
license established pursuant to section seventy-one of this article
until June first, two thousand twenty-four, provided that the licensee
complies with all requirements for the distribution of cannabis products
as set out by the office. After June first, two thousand twenty-four,
any conditional processor seeking to distribute cannabis products shall
be required to apply for and receive a distributor license to conduct
this activity.

7. For the duration of the conditional period of the conditional
adult-use processor license, the ownership or organizational structure
of the entity that is the licensee shall not be amended, except pursuant
to the provisions of subdivisions two, three and four of section
sixty-seven of this article.

8. The office shall set out specific terms and conditions setting out
requirements necessary to be awarded and maintain a conditional
adult-use processor license, including but not limited to the
requirement that a licensee agrees to participate in an environmental
sustainability program and a social equity mentorship program. Such
program shall be directed to train individuals interested in becoming
licensed processors and shall leverage remote and in-person engagement
to provide mentees with experience in processing techniques and good
manufacturing practices. Candidates for the mentorship program must be
at least eighteen years of age, must be a New York state resident, and
must be individuals that would be considered social equity applicants as
defined by section eighty-seven of this article. The license terms and
conditions set out by the office shall include requirements that a
licensee enter into a labor peace agreement with a bona-fide labor
organization that is actively engaged in representing or attempting to
represent the applicant's employees within six months of licensure, that
the maintenance of such labor peace agreement shall be an ongoing
material condition of licensure, and that licensees shall meet any other
eligibility requirements established by the office.

9. The board shall establish a non-refundable application and license
fee, in a manner consistent with section sixty-three of this article,
for the conditional adult-use processor license. No such license shall
be issued after December thirty-first, two thousand twenty-two and such
license shall only be valid through June thirtieth, two thousand
twenty-four.

10. A conditional adult-use processor license shall be deemed to have
been surrendered to the board and a conditional adult-use processor
licensee shall be deemed not to be in good standing, as determined in
the discretion of the executive director in a written notice, effective
upon delivery to the licensee at the licensee's last known address on
file with the office, for reasons including but not limited to:

(a) failure to abide by all the terms and conditions of the
conditional adult-use processor license;

(b) failure to adhere to all requirements set out in regulations and
guidance, including those promulgated after receiving the conditional
adult-use processor license;

(c) failure to submit information, records, or reports;

(d) failure to correct deficiencies in accordance with an approved
corrective action plan;

(e) deviation from regulations, licensing terms, or standard operating
procedures in a manner the office determines may jeopardize health or
safety of the public, or the quality of products produced;

(f) failure to provide office employees with access to the premises;
and

(g) failure to begin operations within six months of the date of the
issuance of the license.

11. A licensee whose conditional adult-use processor license has been
deemed surrendered may within ten days of the delivery date of such
notice appeal the determination of the executive director to the board
pursuant to subdivision eighteen of section ten of this chapter. The
board shall have sole discretion to determine the conduct of the appeal,
which shall include notice and an opportunity to be heard. Upon review
by the board, the board shall issue a final written determination which
may then be reviewed pursuant to section one hundred thirty-five of this
chapter and article seventy-eight of the civil practice law and rules.

12. In the event that a conditional adult-use processor licensee
elects to cease operation of all permitted activities or to surrender
its license, the following provisions shall apply:

(a) the conditional adult-use processor licensee shall notify the
office in writing at least thirty days prior to the anticipated date of
closure;

(b) such written notice shall include a proposed plan for closure. The
plan shall be subject to office approval and shall include timetables
and describe the procedures and actions the licensee shall take to
properly destroy or otherwise dispose of all the licensee's supply of
cannabis and/or cannabis products; and

(c) the licensee or former licensee must maintain and make available
to the office all records related to the cultivation of cannabis for a
period of three years.

13. No later than ninety days before the expiration of a conditional
adult-use processor license, the office shall, pursuant to a request by
the licensee, review the conditional adult-use processor licensee to
determine whether they are in good standing with the office. Good
standing shall include, but not be limited to, compliance with
subdivision seven of this section. Any licensee found to be in good
standing shall be eligible to apply for and receive an adult-use
processor license, provided the licensee can meet all requirements of
the new license.

14. For the purposes of this section, the office has the authority to
define terms including but not limited to "extraction" as part of the
terms and conditions of the conditional adult-use processor license.

15. Nothing in this section shall limit the authority, power, or other
rights or remedies of the board or office.

* NB Repealed June 30, 2024