You Were Just Awarded a New York Adult-Use Cannabis Microbusiness License. Now What?

The first New York adult-use cannabis microbusiness licenses will be awarded via lottery in early 2024. For those who applied, the first step was to go ahead and secure a property and establish a design for your potential microbusiness facility. 

If you sent in your application but haven’t secured real estate, yet, don’t worry. Winners who applied without submitting proof of control over their chosen property will be issued a provisional license and given an additional year to get their location squared away. For those who submitted proof of control with their application, you’ll be issued a full license from the get-go. 

So if you’re one of the lucky recipients of a New York adult-use cannabis microbusiness license, what’s next? Here’s what you need to know about the business regulations and integrating manufacturing and / or retail into your operation.

Understanding the New York adult-use microbusiness license 

The New York adult-use microbusiness license allows for the cultivation, processing, distribution, retail sale, and delivery of the licensee’s own cannabis products. Adult-use microbusinesses must engage in cannabis cultivation and at least one additional licensed activity, such as processing, distribution or retail sale.  

Depending on the authorizations requested during the application process, microbusiness license holders are authorized to conduct various activities including: 

  • Cultivating cannabis
  • Operating processing facilities
  • Purchasing cannabis biomass
  • Processing biomass into cannabis products
  • Selling to licensed processors and distributors
  • Distributing self-produced products to retail dispensaries and on-site consumption premises
  • Delivering products to consumers
  • Organizing cannabis events
  • Selling products directly to consumers from the microbusiness’s retail premises 

New York adult-use microbusiness cultivation canopy options 

New York offered microbusiness license applicants four cultivation canopy options, each with its own pros and cons.

  1. Indoors, up to 3,500 square feet of canopy 

If you intend to establish a quality-focused flower brand in New York, it’s probably best to invest in an efficient indoor cultivation facility design. For your 3,500 SF canopy indoor grow, look for a facility around 7,500-10,000 SF. With a good team, a proven cultivation methodology and high-quality genetics, a grow of this size is capable of yielding anywhere between 2,000 to 3,500 pounds of cannabis annually, not including trim for biomass extraction. 

  1. Mixed light greenhouse, up to 5,000 square feet of canopy 

This license type is a great choice for low-cost, budget-friendly flower brands, boutique extract brands (think strain-specific solventless), and pre-roll brands. While you won’t be able to compete with indoor from a quality standpoint, you will be able to compete when it comes to production cost.  

While everyone will be quick to tell you about how much energy you’ll save because “the sun’s free,” we’re here to warn you that in New York—similar to Maryland, Minnesota, and other northern states with emerging cannabis markets—the sun is only going to cut it for about half the year. As days get shorter, your hours of free, unsupplemented sunlight will dwindle. 

When designing a lighting system for your mixed-light greenhouse, target 750-800 PAR at canopy if you expect to get anywhere close to the quality and yield you’ll hit in the summer months. PAR stands for Photosynthetically Active Radiation—the spectrum of light wavelengths that plants can use to convert light into energy. 

Even when days are at their longest, sunlight won’t usually hit that 750-800 number until around 11 a.m. You’ll be well below that threshold after 5 or 6 p.m. To supply your flowering plants with 12 hours of light you’ll only have six hours of ideal light, leaving six hours where you’ll need to supplement Mother Nature.

Utilizing LED grow lights in your greenhouse will allow you to run your lights without adding too much heat to your grow houses, even when it’s warm outside. Take it from us, it’s worth the upfront investment to hit light-intensity targets. No glow, no grow.

With a canopy of 5,000 square feet, you should achieve yields of somewhere between 2,000 and 3,000 pounds of top-quality flower annually, plus another 1,000 to 2,000 pounds of “smalls” and trim. Blended, this could produce close to two million 1-gram pre-rolls. 

You might also be interested in: Systems Integration, Cannabis Facility Design and Building Cannabis Infrastructure That Grows With Your Business

  1. Outdoors, up to 10,000 square feet of canopy 

An outdoor cultivation operation is the best option for manufacturers of distillate and other concentrates. When it comes to outdoors (and indoors), genetics are everything. While “jar appeal” isn’t a key consideration for extractors, high-yield strains for oil production should be your focus. Short cycle times are also crucial for harvesting ahead of the inevitable outdoor weed glut that happens in most markets every “Croptober”. 

Consider utilizing autoflower seeds, which allow for staged plantings and multiple harvests per season over the same canopy space. If you’re shopping online nurseries and seed banks, buyer beware. Hop latent viroid is rampant in cannabis clone nurseries. And fly-by-night cannabis seed companies are quick to mislabel last year’s hype seeds with this year’s MVP cannabis strains. 

It’s best to source genetics through a reputable cannabis genetics sourcing expert to ensure you get what you expect, and paid for—especially in the narrow “immaculate conception” cannabis sourcing window for new and emerging markets.

Operators who pursue an outdoor-only grow will need to develop additional revenue streams beyond flower sales to make ends meet. Outdoor flower typically wholesales at $500-$800 per pound, so adding value to the product will be crucial with margins that tight.  We’re going to assume outdoor license-holders will plan on doing some sort of manufacturing, so we’ll throw out some tips for cannabis product manufacturing later in this blog. 

  1. Outdoors and mixed light, up to 5,000 square feet of outdoor canopy and 2,500 square feet of mixed light 

Thinking about producing extract and pre-rolls? Or perhaps pre-packed budget ounces in fresh-looking mylars? This combination license checks a lot of boxes for different product categories. Outdoors and mixed light grows can produce consistent “B” quality to “A-minus” grade flower within the greenhouse, supplemented by a low-production-cost outdoor bumper crop (or two) in the summer and fall seasons. 

This arrangement also allows for greenhouse propagation and vegetative growth ahead of planting outdoors. Internalizing the propagation of clones for outdoor cultivation can take a lot of the guesswork out of your cultivation yield metrics and reduce per-pound overhead costs.

It bears repeating: To be successful growing outdoors and in greenhouses, it’s crucial to have quality, proven cannabis genetics. You need to know what you’re working with to do well. Many strains just won’t perform in non-indoor environments. Some won’t yield much, or will run for too many weeks when outside or in low-light environments, some are super susceptible to pests and bud rot—so make sure you trust your genetic source. 

You may also like: How to Start a Cultivation Business: Here’s What You Need To Know Before Day One

Keep manufacturing simple at your New York adult-use microbusiness license 

For operators planning on small-scale manufacturing adjacent to the cultivation site, allocate 1,000-2,000 square feet. That’s enough for essential production processes like extraction, packaging and filling pre-rolls, edible molds or cartridges. If you’re planning on extracting your entire outdoor crop, consider increasing the footprint for manufacturing to 3,000-5,000 square feet, depending on your product offerings. 

We recommend focusing on simple initial product offerings that don’t require massive upfront investment for equipment. Vape carts and gummies always sell. Avoid beverages, baked goods or similar snacks, and topicals such as lotions or salves unless you’ve been in this industry for a while and have a product that has proven itself in an existing adult-use market. Consider designating space (and power) for freezers if you intend on selling fresh-frozen biomass or producing rosin in-house. 

Don’t overspend on automated packaging out of the gate. You want to commit to specific products,hardware (think vape carts) and package design before you drop big bucks on automation equipment. It’s also important to allocate enough space for secure storage of finished and packaged products, which can take up considerably more space than bulk flower. 

By focusing on high-quality genetics, low-cost production, and efficient cannabis facility design, microbusiness operators will be uniquely positioned to compete in New York’s cannabis market. Designing an efficient and streamlined post-harvest processing facility is key to success in this competitive arena. 

Retail for New York’s adult-use cannabis market 

If a retail storefront is part of your microbusiness strategy, be sure to prioritize retail efficiency and the customer experience. Dispensaries do not need to be overly fancy or large to be successful. A wise head once said, “People don’t like to buy weed in a place that’s nicer than their own home.” 

Customers value comfort, convenience and novelty over expensive fixtures. Consider incorporating drive-through services and delivery options to serve even more customers. Always remember to take good care of your budtenders to build a customer base. If the budtenders love your product, loyal end-users will follow.  

A responsibly managed, small-scale, vertically integrated business can yield substantial profits, especially when focusing on quality, premium cannabis genetics, and delivering an exceptional brand and customer experience.  

For support in planning and designing your microbusiness, or a cultivation facility, manufacturing facility or dispensary of any size in New York, reach out to Next Big Crop today. We specialize in:

Your journey to New York adult-use cannabis microbusiness success starts here!