Conditional Adult Use Licenses and Dispensaries: Everything You Need to Know

As the cannabis business expands across the nation, many states have set unique regulations concerning dispensaries, licenses, production, and manufacturing. The concept of conditional adult-use dispensaries has garnered the attention of those in the marijuana community, specifically after the Cannabis Control Board of New York drafted the application process for conditional adult-use retail license applications. 

Traditional retail licenses can be confusing for those interested in pursuing marijuana entrepreneurship, let alone conditional adult-use dispensaries and permits. At Ritter Spencer, we recognize the importance of being familiar with emerging trends within the marijuana industry. Read below to learn more about conditional use dispensaries.

Defining the Conditional Adult Use License

The concept of conditional adult use licenses was recently reintroduced to the public by New York’s Seeding Opportunity Initiative, which focuses on social justice in the marijuana community. According to the initiative, this license will allow “equity-entrepreneurs with a prior cannabis-related criminal offense who also have a background owning and operating a small business” to establish equity-owned cannabis businesses. 

Currently, in states like New York and Illinois, the application process for a license is unique to each state’s requirements. Below is what the process for applying for and holding a license looks like in Illinois:

  • A person cannot hold a Medical Cannabis Dispensing Organization License to qualify for the Conditional Adult Use License. 
  • The license does not entitle a person to sell or purchase cannabis until the license holder finds a location within a designated area to operate. The holder has 180 days to locate operating premises. 
  • Once premises are established, it will be subject to inspection. 
  • The state will then award the license holder an Adult Use Dispensing Organization License. An Adult Use Dispensing Organization License authorizes a holder to obtain and sell cannabis legally according to the Cannabis and Regulation Tax Act.

Granting a Conditional Adult Use Dispensing Organization License

States like Illinois and New York set the stage for initiatives granting conditional adult-use licenses, which are uniquely separate from traditional adult-use licenses. The process of applying and qualifying for these licenses will vary state by state, but usually, these processes adhere to similar standards.

Typically, a conditional adult-use license is granted to those disproportionately affected by anti-cannabis laws or legislation. Applicants are selected based on their business plans and eligibility depending on the social equity standards of a state. A conditional adult-use license holder can apply for a standard adult-use license to purchase and sell marijuana products in their business through a set of requirements. 

Does Texas Have Conditional Adult Use Licenses?

No. Texas is a vertically integrated state, meaning that dispensing organizations in Texas must cultivate, harvest, process, package, and dispense medical marijuana prescriptions. Currently, Texas has only granted three dispensing organization licenses for the Texas Compassionate Use Program and only two of the three dispensing organizations are operational.

As new standards for cannabis businesses and licenses emerge, we strive to keep the marijuana industry apprised of the latest information. Chelsie Spencer is a trusted advisor to the cannabis community and is dedicated to providing legal counsel and services to a range of hemp, marijuana, and CBD businesses. Chelsie offers substantial expertise in various legal fields with years of experience in hemp and marijuana law, copyrights and trademarks. Contact Ritter Spencer or call us at 214.295.5074 for more information. 

Ritter Spencer, PLLCConditional Adult Use Licenses and Dispensaries: Everything You Need to Know

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