A guide for New York operators to prepare for adult use sales and stay compliant with Dutchie POS.
Disclaimer
Dutchie does not provide compliance advice. Merchants are responsible for their own compliance. Internal and external Dutchie compliance documentation has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or compliance advice. Dutchie strongly recommends that all licensees confirm compliance practices with the Office of Cannabis Management (OCM).
Approved Registered Organizations are permitted to conduct adult-use sales. Here's what you need to know:
- Inventory
- Customer/Patient Profiles
- Adult-use purchase limits and taxes
- Settings
- License numbers on manifests
- Packaging and labeling
- Required OCM inventory reporting
- Hybrid licenses best practices
Inventory
Medical and adult-use sales operate off one/hybrid inventory. Therefore, you do not need to segregate or label cannabis products as medical cannabis products and adult-use cannabis products subject to the following exceptions:
- Any products sold by an adult-use licensee cannot be sold as a medical cannabis product.
- Cannabis products that are allowed to be sold to medical patients but not allowed in the adult-use market must be reserved for medical patients only (for example, cannabis products with greater than 10mg THC cannot be sold to adult-use consumers but can be sold to medical patients).
- Testing requirements - if a cannabis product passes under the medical cannabis testing standards, it can be sold to both medical patients and adult-use customers. However, if a product passes under the adult-use testing standards only, it cannot be sold to medical patients and can only be sold to adult-use customers.
To designate certain products or product categories as medical-only:
- In your Catalog, create separate products and/or product categories for medical cannabis and adult-use cannabis. For example, Blue Dream-3.5g-MED and Blue Dream-3.5g-AU; or Concentrates - MED and Concentrates - REC.
- Use the Available for dropdown to select the customer type(s) that can purchase the product or category of products.
- Product-level settings will override category-level settings.
- However, if you change your Available for selections for an existing product category, this will also update customer-type restrictions for all assigned products.
Notes
Medical cannabis products can be sold to medical patients; however, adult-use cannabis products can be sold to both medical and adult-use consumers. Be sure that you are selecting the correct products when making sales.
For products intended to be sold in both the medical and adult-use markets, you must attach the NDC number to those products so they will appear on the PMP report when purchased by a patient
There is currently no tool that can mark a product as adult-use only and prevent the sale of certain products to certain customer groups. If you have products that cannot be sold to medical patients, you can note it in the product name.
Customer/patient profiles
ROs must keep patient purchases separate from adult-use customer purchases. ROs have two options for handling medical patients who may also desire to purchase as adult-use customers:
Option 1 (recommended)
ROs can maintain separate patient and adult-use profiles for customers who are medical patients who may also purchase as adult-use customers. A medical patient profile cannot be used for adult-use transactions due to differences in reporting and tax requirements.
Dispensaries will have to be careful to select the correct customer profile based on the type of cannabis products being purchased.
At door check-in, if a patient has both a medical patient profile and an adult-use customer profile, the earliest created profile (most likely the patient profile) will be the profile that is automatically checked in. If the patient intends to purchase with their other profile, the RO employee will have to ensure the correct profile is manually pulled up before processing the sale.
Option 2
ROs can choose to maintain one profile for a medical patient who also purchases as an adult-use customer on occasion. The RO employee must ensure that the correct customer type at the profile level is selected when they are ringing up the transaction.
Warning
If a recreational customer type is accidentally selected for a medical patient sale, the transaction will be inadvertently reported to the PMP report, resulting in report errors. Additionally, using the wrong customer type will apply incorrect taxes!
Notes
If you use IDscan and a customer has both a patient and customer profile, the patient profile will be pulled up by default.
Medical and adult-use cannabis cannot be purchased in a single transaction! If a customer desires to purchase medical cannabis and adult-use cannabis, they must be processed in separate transactions so the correct taxes and reporting requirements are met.
If you haven't previously done so, be sure to enable the Recreational customer type for adult-use customers/sales. Learn how.
Tax configuration
Configure your taxes as follows:
9% State Tax
- Customer types: Apply to selected types > Recreational
- Tax categories: Apply to selected types > Cannabis
- Gross tax: Yes
- Is excise tax: Yes
4% Local Tax
- Customer types: Apply to selected types > Recreational
- Tax categories: Apply to selected types > Cannabis
- Gross tax: Yes
- Is excise tax: Yes
8.875% NY Sales Tax
- Customer types: Apply to all
- Tax categories: Apply to selected categories > select all non-cannabis categories
Disclaimer
Dutchie does not provide tax advice. Licensees using Dutchie should determine their tax responsibilities by utilizing their own tax advisors. Dutchie provides tools that calculate taxes in many optional configurations. Dutchie does not and cannot ensure that tax calculations in Dutchie products are correctly configured. Configuring taxes is exclusively the responsibility of the licensee.
Settings
Before beginning adult-use sales:
- Go to Settings > Location.
- Turn OFF Require Prescription for Check In
- Turn ON Allow Rec Customers
- Click Save.
There are two other settings that must be configured by Dutchie Support. Contact Support to confirm the following settings:
- Allow Medical Only Packages = ON
- Require Doctor for Check In = OFF
You may also need to enable the Recreational customer type. Learn how.
License numbers on manifests
The guidance we have received from OCM regarding license numbers on manifests is the following:
“Manifest documents are required to contain sufficient information to identify the products received are the ones listed on the manifest. The license number used on the manifest must allow for complete traceability within the electronic tracking system and should be specific to the originating entity location.”
If you have questions about what license number should be used on the manifest to maintain compliance, please follow up with OCM directly.
Dutchie POS can currently only accommodate one license number at a time on a manifest.
Required OCM inventory reporting
Medical Cannabis and PMP
All medical cannabis dispensing data must continue to be submitted to the NYS Prescription Monitoring Program Registry pursuant to existing rules and regulations. ROs should use the “NY PMP Report” to export to the portal. ROs must continue using their medical registration number on the PMP Report upload for it to be accepted.
Note
Any cannabis product purchased under a patient profile will be shown on the PMP Report. If adult-use cannabis is purchased under a patient profile, it will appear on the NY PMP Report. Therefore, it is important that only medical cannabis is purchased under patient profiles (see Customer/patient profiles above) to avoid adult-use cannabis from being reported to PMP.
Adult-use inventory and sales reporting
ROs are required to submit inventory and sales data to OCM on a weekly basis, with an indicator of inventory sold for medical versus adult use.
New York Hybrid Sales Report - This report shows the hybrid (medical and adult use) sales data ROs are required to report to OCM. Use this report to file your weekly hybrid sales report to OCM. Use this report to file your monthly sales data for the state of New York.
- Non-cannabis items are now excluded from the result set - it is vitally important for operators to appropriately flag items as cannabis.
- Regulatory categories are now being utilized for the product type/form field - If form validation is not properly configured, the regulatory category field will be absent from the product catalog. Additionally, operators will need to ensure that this field is complete for all cannabis products. In the event there is no regulatory category defined for the product, operators will be met with a message in that column that reads "Regulatory Category Undefined".
- Additionally, we confirmed that sales report as negative values, and returns report as positive values.
Hybrid licenses best practices
Prep Work For Hybrid License Location:
- Set up taxes for AU in both Ecommerce and Backoffice.
- Run Product Tax Report and verify all cannabis categories are set up with the correct tax categories.
- Enable Anonymous Transactions.
- Enable combo purchase limits and configure purchase limits with the client for AU.
- Confirm that packages are syncing to Ecommerce from the correct rooms (AU vs. MED).
- Test taxes and purchase limits in the cart for a recreational sale.
- Regulatory Category in Product Catalog: The regulatory categories set by the state of New York are a requirement for the hybrid sales report. Dutchie has been in touch with OCM to confirm this is the field mapping. New York Hybrid operators will be out of compliance from a reporting perspective if the regulatory categories are not populated.