* § 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 § 135 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