The cannabis industry in New York State has been a roller-coaster ride of anticipation and disappointment for many eager entrepreneurs and enthusiasts. Two years after the landmark Marijuana Regulation and Taxation Act legalized adult-use cannabis, New York’s Governor, Kathy Hochul, has ordered a comprehensive review of the arduous licensing process, recognizing the pressing need to fix the “disastrous” and “sluggish” rollout.
When New York first set out to legalize adult-use cannabis, the intention was clear — to create a marketplace that was not only safe and regulated but also equitable, providing opportunities for marginalized communities that bore the brunt of the war on drugs. The Cannabis Control Board, along with the Office of Cannabis Management, was entrusted with the crucial task of designing a system that would deliver on these promises.
Legalization Rollout
Despite the initial enthusiasm, the rollout has been marred by controversy and gridlock. From the slow processing of licensing applications to the uneven distribution of opportunities, the fledgling industry has faced an uphill battle. The New York Times reports that out of over 7,000 applications received last fall, only 109 licenses have been issued, with a mere 32 individuals responsible for evaluating these.
With the industry representing a potential of $5 billion, the stakes are significantly high, especially when considering its role in fostering economic recovery post-pandemic. However, the delays in licensing have led to the unauthorized sale of cannabis through “illicit outlets, causing additional strain and confusion within the market.
The sluggish progress in the distribution of cannabis licenses in New York can be further understood when considering the legal hurdles the state has had to overcome. A significant portion of the delay has stemmed from various lawsuits, notably one from large Multi-State Operators (MSOs) eager to secure a foothold in the lucrative adult-use market. These corporations have aggressively pursued legal action to expedite their entry into the market, often at the expense of smaller, local entrepreneurs waiting for their licenses.
Additionally, a lawsuit brought forth by veterans has spotlighted the systematic issues plaguing the social equity program. The veterans argue that they were unfairly sidelined in the licensing process, which was supposed to prioritize individuals from communities most harmed by previous cannabis laws.
Top-Down Review
Governor Hochul’s decision to order this review indicates a long-overdue commitment to not only meeting the legal obligations of cannabis but also implementing the intended social and economic reforms. Commissioner for the Office of General Services Jeanette Moy, known for streamlining complex government processes, will serve as lead and executive sponsor of the review.
“Today, we take the first step in revamping New York’s legal cannabis industry to ensure its long-term success,” Governor Hochul said in a press release. “I have full confidence in Commissioner Moy’s ability to identify areas that need improvement, establish standards and processes across agencies, and jumpstart the next phase of New York’s legal cannabis market.
Jeanette Moy said, “Governor Hochul has prioritized a State government that is transparent, more efficient and responsive for all New Yorkers. I look forward to working with OCM’s leadership to help get this agency’s work on track and find ways to streamline the application process and get businesses open.”
In Governor Hochul’s press release it outlines the several goals have been identified for the review:
- Top-down review of organizational structure, processes, and systems with a focus on improving OCM license processing times and application-to-opening timeframes for new cannabis retailers and businesses.
- Develop key performance metrics and an executive-level licensing dashboard to provide the Executive Chamber with a timely, accurate, and comprehensive picture of licensing activity for legal retailers.
- Identify and implement changes to policy, procedure, and regulation (within the bounds of the MRTA) to streamline the licensing process and simplify application and review for prospective licensees.
- Develop three-month and six-month action plans with organizational change initiatives, milestones, and actions to continue improving agency functions while developing a world-class licensing and regulatory agency for New York States’ cannabis industry.
New York State Office of Cannabis Management Executive Direct Chris Alexander said, “We have built a cannabis market based on equity, and there is a lot to be proud of. At the same time, there is more we can do to improve OCM’s operations and we know Commissioner Moy, a proven leader in government, will help us get where we need to be. We owe it to operators across the supply chain and consumers alike, who are looking for more access and opportunity in our budding, regulated market. At the end of the day, it’s all about doing what’s right for New Yorkers.”
In a setting where each move gets a close look, Hochul’s review might just be the game-changer. By guaranteeing a thorough and fair evaluation, the goal is for the licensing procedure to transform into a clearer, user-friendly, and faster system that fosters a lively, well-regulated industry in New York that actually runs.
Stakeholders are cautiously optimistic, viewing the review not as a sign of failure but as an acknowledgement of the need for refinement. Participants envision a future where the cannabis market can help restore communities and create new opportunities.
Yet, balancing the urgency to act swiftly with the gravity of the undertaking underscores the complexity of the task ahead. The industry looks towards Commissioner Moy’s review as the first step on a path that rightly marries meticulous process and inclusive outcome.
The call for an overhaul of New York’s cannabis licensing process is a pivotal moment in the state’s quest for a responsible and equitable cannabis industry. As the review unfolds, the transparency, inclusion, and expediency of the new licensing system will be under intense public and market-driven scrutiny.
For now, New York’s cannabis community awaits the outcomes of this review, hopeful that it will bring about the necessary changes. Regardless of the subsequent legal adjustments, one thing remains unchanged — the undeniable potential of the cannabis industry to transform lives and uplift communities, a vision that New York remains steadfast on delivering.
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