New York’s Type 3 Processor (“Brand License”), issued by the Office of Cannabis Management (OCM), enables brand operators to enter the state’s legal cannabis market without touching the plant themselves. Here’s a complete breakdown:
Authorized Activities
White-Label/Branding Partnerships
Licensees can enter white-label agreements with licensed, plant-touching processors (Type 1 or Type 2). This means you can have your logo or brand on products manufactured by a licensed processor for sale under your label.
Provide Intellectual Property & Manufacturing Protocols
You may supply the processor with:
– Brand elements (logos, packaging design)
– Quality-control plans and production standards
– Equipment, non-cannabis materials, and ingredients (e.g., rolling papers, flavors, vaporizer devices)
Set Quality Standards
Your license lets you define product standards—such as manufacturing guidelines and quality benchmarks—that processors must follow under your brand.
Prohibited Activities
No Plant-Touching
As a Type 3 licensee, you cannot:
– Cultivate
– Extract or blend
– Infuse
– Package or label any cannabis products yourself
No Production Facility Required
You’re not required to maintain any production facilities in NY—a major cost and logistical advantage.
No Retail or Other Licensed Interests
You cannot have any direct or indirect stake in other cannabis businesses such as:
– Dispensaries
– Delivery services
– Consumption lounges
– Labs
Sell the Cannabis Product
A Brand Licensee (Processor Type 3) in New York cannot directly sell cannabis products produced under a white-label agreement. Under the state’s two-tier licensing structure, brand licensees are strictly non-plant-touching and are prohibited from:
– Selling or distributing cannabis products;
– Transporting or storing cannabis products;
– Holding an interest in a retail, delivery, or distribution license.
Summary Table
| Category | Permitted | Prohibited |
| Product Control | Intellectual property, quality specs, non-cannabis inputs, protocols | Handling or manufacturing cannabis products directly |
| Production Partnerships | White-label contracts with Type 1/2 processors | Acting as or investing in a processing facility |
| Facility Requirements | None | Must not own or operate a plant-touching facility |
| Cross-Licensing | Allowed with processors via TPI compliance | Owning any dispensary, on-site consumption, delivery, or lab license |
| Regulatory Compliance | Must adhere to OCM branding, licensing, and GMP rules | Any unapproved plant-touching activity will void the license |
Can Brand Licensees Sell Their Products?
No. Instead, a Type 3 licensee may:
– Receive royalty or licensing payments from the licensed processor for use of the brand
– Promote the brand in compliance with OCM marketing regulations
Only the licensed processor or their authorized distributor may handle product sales to licensed dispensaries. Brand licensors must ensure that they do not cross into activities that would require a separate license under OCM regulations. This model helps maintain separation between the manufacturing/distribution tier and the retail tier, while still enabling brands to thrive in the marketplace.
Final Takeaways
NY’s Type 3 Brand License is a strategic vehicle for brand owners to launch in the cannabis space with minimal overhead. You can partner with processors to produce your branded line, supply design and quality standards, and manage marketing. However, you can’t touch the plant, run a processing facility, sell the product or have conflicting cannabis interests.
Ready to Explore Obtaining This License?
Contact Attorney Tracy Jong at Evans Fox LLP to explore legal, regulatory, and operational strategies for expanding your brand into the cannabis space. You can reach Tracy at [email protected] or follow @AttorneyTracyJong on LinkedIn and Instagram for updates.
Tracy Jong is a Senior attorney at Evans Fox LLP with 30 years of experience focusing her practice in business law, intellectual property and licensing for alcohol and cannabis. Tracy Jong is a member of the New York Bar and is a registered attorney at the United States Patent and Trademark Office.
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The content has been prepared for informational purposes only; it should not be construed as legal advice, does not create or constitute an attorney-client relationship, and readers should not act upon it without seeking professional counsel.