New York’s Cannabis Landscape Expands with New Bill Opening Doors to Out-of-State Operators and Intoxicating Hemp
New York's burgeoning cannabis industry is set for a transformative shift, with potential implications for both in-state and out-of-state cannabis brands. A new bill introduced in the state Senate on March 3, 2025, promises to significantly alter the state's cannabis market by addressing both intoxicating hemp products and the inclusion of out-of-state operators.
Legislation Set to Repeal Intoxicating Hemp Restrictions
The newly introduced Senate bill, S05809, proposes the repeal of emergency regulations that were set to enforce restrictions on intoxicating hemp products like Delta 8 and Delta 10 THC starting July 2025. These products have sparked a nationwide debate due to their legality under federal law and minimal regulation, despite their growing presence in the market.
Initially, New York’s Office for Cannabis Management (OCM) had sought to curb the sale of these products due to safety concerns and lack of regulation. However, this new bill seeks to shift the approach by allowing the sale of these products—specifically Delta 9 THC, the primary psychoactive compound in cannabis—in licensed dispensaries. If passed, the new regulations would give a green light to these alternative THC products to be sold alongside traditional cannabis goods, increasing consumer choice and market diversity.
The bill also proposes that, starting January 1, 2026, licensed retailers will be authorized to sell cannabinoid hemp products that meet specific safety standards set by the OCM, creating clearer guidelines for both producers and consumers.
Opening Doors for Out-of-State Cannabis Brands
In another significant shift, the new bill also introduces a revamped business licensing structure that could make it easier for out-of-state cannabis operators to enter New York’s legal market. A new license type, the Adult-Use Processor Type 3 Branding License, allows cannabis brands to market their products in New York without needing to operate physical processing facilities.
This license type opens up an avenue for companies that don’t have direct involvement with the plant—such as marketing firms or out-of-state brands—to work with licensed processors in New York. Through white-label agreements, these brands can have their products processed, packaged, and labeled by licensed processors in the state, while they retain control over intellectual property and brand standards. This means that brands can enter the state market without having to establish costly infrastructure or maintain physical operations within New York.
Despite these changes, the OCM will continue to require full disclosure of ownership and financial details to ensure compliance with regulatory requirements related to ownership limits and control. This is intended to prevent multi-state operators from dominating the market while still allowing them to participate in the state’s thriving legal cannabis sector.
A Shift in New York’s Cannabis Vision
New York’s cannabis program was initially designed with a focus on local businesses, aiming to create a space for smaller operators and prevent large out-of-state companies from overwhelming the market. The introduction of the Type 3 Branding License, however, could loosen these restrictions, potentially paving the way for multi-state operators to gain a larger foothold in the state’s cannabis industry.
This move may open the door for national cannabis brands to tap into one of the country’s most coveted markets, but it also raises questions about the long-term impact on local businesses. As more states legalize cannabis and the market becomes increasingly competitive, the balance between local and out-of-state interests will likely continue to evolve.
A New Era for New York Cannabis
With this legislative push, New York’s cannabis industry is preparing for a period of rapid growth and adaptation. As the state grapples with new hemp regulations and opens its doors to out-of-state players, stakeholders across the cannabis ecosystem will be watching closely to see how these changes shape the future of the market.
If the bill passes, consumers in New York will see a wider array of THC products in licensed dispensaries, and brands from across the country will have an easier path to entering the state. These developments could have lasting effects on the cannabis industry, both in New York and nationwide, marking a new chapter in the state’s evolving cannabis story.
Stay tuned as New York’s cannabis landscape continues to evolve, with changes that could set the tone for the future of cannabis regulation and business in the United States.
