Colton Griffin on What’s Going on in New York with Biotrack and OCM

Flourish Software CEO Colton Griffin goes in the weeds on what is happening with Biotrack, OCM, and cannabis laws in New York.

ICYMI: The OCM Mandate

Change is afoot in New York’s cannabis legal landscape. After winning the bid, Biotrack will serve as the state’s universal track and trace platform pending imminent approval from OCM, New York’s Office of Cannabis Management. With that, all legal adult-use license holders will be asked to choose a 3rd party software by October 15, and put it into use by November 1 (we think).

The Slow and Painful Path to Legalization with New York’s Cannabis Laws

Effective March 31st, 2021, adult-use cannabis became legal in the state of New York. From there, a long period of ambiguity and uncertainty followed, in which buying and using cannabis was legal, but no retail outlets were licensed to sell it. This uncertainty continued as the state’s well-intentioned but poorly executed plans for a social equity preference for justice-involved former sellers were slow in the roll out. As we’ll go on to discuss, thousands of illegal dispensaries stepped into this void, undermining and undercutting the limited set of legal operators. As of Oct 4, though, when licensure opens up broadly, this is all set to change. In this blog we’ll track the recent developments with the OCM and Biotrack in New York, and use them to forecast into the coming months. Read more about the timeline here.

CAURD and Adult Use Dispensaries in New York

Well-intended though it was, the roll out of CAURD (Conditional Adult-use Cannabis Retail Dispensary) preferential licenses process has since backfired, allowing semi-legal, ambitious entrepreneurs to step into the void Cuomo’s (and now Hochul’s) lagging roll-out created. Ever since, these unlicensed dispensaries have been able to operate via a “gift economy” loophole, undercutting legal adult-use dispensaries with untested, untaxed, and in some cases unsafe, product. The so-called gift economy works more or less as it sounds, where a sticker sold for sixty dollars comes with a complimentary sixty dollar gift of weed. Hence why many have come to refer to New York’s existing weed laws as a “gray market,” balanced somewhere between the out-and-out “black market” of illegal drugs and the opposite of legally licensed dispensaries, which have been few and far between. Oddly enough, this limbo of legal-not legal was upheld in court, largely as a result of a reverse-discrimination claim filed by veterans who were denied licensure under the CAURD requirements. To date only 23 retailers are operating under the CAURD program – in a state of nearly eight and a half million!

As of October 5th, however, things are set to change. Despite the political will behind the CAURD program and the not insignificant “Social Equity Fund,” there seems to be growing recognition that opening up the field beyond the narrow “justice-involved” provision CAURD allowed for needs to happen. So, October 5th through December 23rd, the state intends to open up applications for regular adult-use licenses to non-CAURD applicants. What this will look exactly like is not yet clear, so stay tuned. Read more about CAURD here.

All Under Biotrack’s Umbrella

Change is afoot elsewhere, too. Pending the final word of approval from OCM (New York’s Office of Cannabis Management), Biotrack won the bid for New York State’s universal track and trace platform, unifying all licensed retailers under one statewide seed to sale system of record. Biotrack itself has changed hands over the years like a dollar bill. After its founding in 2010, Biotrack was acquired in 2018 by Helix TCS, a cannabis software company, only to be passed on to Florian, a healthcare tech company, three years later, in 2021. In 2023 Florian divested Biotrack to Alleaves, about whom not much is known. Most crucial in all of this is the state’s mandate that all licensed cannabis operators adopt a third party software platform capable of syncing with Biotrack by mid October. This is a big decision! And on top of that, one that needs to be made quickly to remain on top of your New York cannabis compliance.

Cannabis Licenses for All

Before anything else, keep in mind: cultivation, dispensary retail, and manufacturing and processing are separate stages of the cannabis industry and as such require separate licenses. Still, there’s kinship in that all three have been closed to new applications for some time and will be reopening soon. The following is a brief time table of the respective closing and re-opening windows:

• Adult-Use Dispensary License: closed to applications as of August 2023; set to open to non-CAURD applicants Oct 5-Dec 23.
• Adult-Use Conditional Cultivator License: initially open March 15, 2022–June 30, 2022 to authorized hemp growers; set to re-open soon, as promised by the OCM.
• Adult-Use  Conditional Processor License: initially open June 28, 2022–August 31, 2022; set to re-open soon, as promised by the OCM.

Perhaps the key takeaway of the above is that this is all happening very soon, and not for long. Also worth noting is that the CAURD paperwork was notoriously difficult, so if we can take it as any indication of what’s to come, you’d be well-served to begin your preparations early. The OCM and the state have yet to update their respective informational page as to how this next round of applications will resemble the last. For now the best response is to be ready to move quickly in the event that opportunity arises. Read more about cannabis licenses here.

Projecting Ahead with Flourish

Beyond the OCM’s soon-to-be-announced requirement that all adult-use license holders adopt 3rd party software by October 15th, there’s a lot to be said for what advantages state of the art software can offer. And with so much hanging in the balance in New York, this is a decision better made soon. Flourish, a cannabis software company designed to connect sales, operations, and finance while satisfying all of your seed-to-sale compliance requirements, can also help you sync with BioTrack, as per the OCM mandate. For more about Flourish and what it has to offer, read here.