How to Launch a Cannabis Brand in New York Under a Tier 3 OCM Processing License

May 28

New York’s adult-use cannabis market continues to develop rapidly, and many entrepreneurs are exploring how to launch a brand within this regulated environment. While cultivation and retail licenses receive the most public attention, the Tier 3 Processor license is often the key to bringing cannabis products to market — especially if your vision is to create vapes, pre-rolls, edibles, concentrates, tinctures, or branded finished goods.

This article explains how brand owners can legally operate through a Tier 3 Processor, what responsibilities the license holder carries, and how to structure partnerships compliantly.

Disclaimer: This article is for educational purposes only and should not be considered legal advice. Entrepreneurs should consult an attorney familiar with NYS OCM regulations, cannabis corporate structuring, and True Party of Interest (TPI) rules.

What is a Tier 3 (Processor) License in New York?

A Tier 3 Processor License authorizes a company to:

Receive cannabis biomass or extract from licensed cultivators/processors
Perform extraction (e.g., hydrocarbon, solventless, ethanol, CO₂)
Manufacture finished cannabis products
Develop branded consumer goods
Co-pack products for other licensed brands
Sell finished goods to licensed distributors, not directly to consumers

It is not a retail license — but it is the center of NY’s manufacturing supply chain.

Launching a Brand Without Your Own License

(White Label + Co-Manufacturing Model)

If you do not hold your own processor license, you can legally build and sell a cannabis brand by partnering with a licensed Tier 3 processor who:

Manufactures your product under their active license
Adheres to all OCM testing + compliance regulations
Distributes through a licensed distributor
Reports products through METRC/seed-to-sale tracking

This is known as a white-label / co-manufacturing partnership — and it is completely legal, provided the structure respects TPI rules.

Understanding TPI (True Party of Interest) Rules

New York restricts who can financially control or influence multiple license types.
If you’re launching a brand without holding your own license, you must avoid:

Equity in the licensed processor (unless structured properly)
Profit-sharing tied to cannabis revenue
Management control or voting authority over the licensee

What is allowed:

Brand-owner IP agreements
Contract manufacturing arrangements
Licensing your trademarks / creative assets to a processor
Receiving revenue based on IP fees or licensing agreements, set at fair market value

This is how most emerging NY cannabis brands operate today.

Steps to Launch a Legal Cannabis Brand in New York

1. Define Your Brand Identity + Target Market

Product category (e.g., pre-rolls, gummies, live resin vapes)
Price tier (value, premium, connoisseur)
Visual identity + cultural voice

2. Select a Licensed Tier 3 Processing Partner

Look for a processor that has:

A valid active OCM license
Experience with your desired product format
Strong compliance + batch traceability procedures
In-house co-packing and formulation expertise

3. Create a Brand Licensing Agreement

Your brand IP remains yours.
You license it to the processor at fair market value. Your processor in return will agree to process for your brand at a fair market value.

4. Develop Product Formulations + SOPs

Your processor should help with:

Formulation
Flavor + terpene selection
Infusion methodology
Batch consistency + scaling

5. Manufacturing + Co-Packing

Your processor produces your SKUs under regulatory oversight.

6. Distribution

Products are transferred to a licensed distributor, who sells to dispensaries statewide.

Why Partner With HP Wellness

HP Wellness is one of New York State’s only women-owned Tier 1 and Tier 3 licensed cannabis processors, specializing in:

Hydrocarbon extraction (live resin, diamonds, HTE)
Solventless production (ice water hash + live rosin)
Co-packing + private label manufacturing
Branded infused pre-rolls, gummies, vapes, tinctures
Distribution-ready packaging and compliance support

We help brands move from concept → market-ready product with integrity, transparency, and craft-level quality.

Let’s Bring Your Brand to Life — Safely, Legally, and With Care

Whether you’re launching your first SKU or expanding into New York, we’d love to guide you through the process. Contact us.

Ashley Jelks