New York opens doors to out-of-state cannabis brands and hemp-based psychotropic products

The New York's emerging legal cannabis market seeks to revitalize itself by making it easier for non-government operators to enter the market and by allowing the sale of hemp-based psychotropic products—which are therefore legal at the federal level—in dispensaries.

On Monday, March 3, a new bill was introduced in the New York State Senate aimed at repealing an emergency regulation restricting the sale of these products, which was originally scheduled to take effect in July.

L’Office for Cannabis Management The New York OCM had implemented emergency regulations to counter the influx of these products, which include THC variants such as Delta-8 and Delta-10. This measure was set to take effect on July 27, 2025.

However, Senate Bill S05809, currently under consideration by the Senate, seeks to repeal this regulation, focusing primarily on the delta-9-THC, the scientific name for THC. This change could also allow for the sale of other THC isomers (the delta-8 or delta-10, synthetically derived from CBD) will be available at legal dispensaries starting January 1, 2026.

At the same time, the OCM introduced a new commercial license for cannabis: the « Adult-Use Processor Type 3 Branding License«. This license allows cannabis brands to gain access to the legal New York market without owning a physical processing facility or engaging in activities directly related to plants.

The original New York program was designed to support local businesses and prevent large multinational corporations to dominate the market. This new license would pave the way for outside players.

The Type 3 license allows cannabis brands to market their products through white-label agreements with transformers already approved by the government. Specifically, a contract manufacturer handles extraction, blending, infusion, packaging, and labeling, while the license holder contributes its intellectual property (logos, product specifications) and non-cannabis-related elements (rolling papers, terpenes, vaporizers, etc.). The processor must comply with the brand's quality standards to ensure product consistency.

The OCM will continue to require a Complete transparency regarding ownership, corporate management and finances, in order to ensure compliance with market oversight regulations and prevent any undue influence.