New York needs to figure out how to fix the cannabis mess, Hochul orders

Gov. Kathy Hochul has ordered New York officials to fix the way the state licenses cannabis businesses, amid widespread frustration over the sluggish pace of the state’s legal cannabis rollout and the explosion of unlicensed dispensaries.

The governor has ordered a major overhaul of the state’s licensing bureaucracy, set to begin Monday — weeks after she announced the rollout.a disasterand canceled a meeting of the Cannabis Control Board when she learned the agency was willing to hand out only a few licenses.

The main goal of the review, which will be conducted by Office of General Services commissioner Jeanette Moy, is to shorten the time it takes to process applications and get businesses open, officials said.

The state Office of Cannabis Management, which recommends applicants to the board for final approval, received 7,000 applications for licenses last fall from companies looking to open dispensaries, grow cannabis and produce products. But regulators have awarded only 109 so far this year. The agency has assigned only 32 people to review the applications.

Ms. Moy has “a proven track record of improving government operations,” the governor said in a statement, and will provide a playbook to turn around the cannabis management office “and jump-start the next phase of New York’s legal cannabis market York.”

In an interview, Ms. Moy said her goal was to work with the cannabis management agency “to identify ways that we can support them in streamlining and moving forward some of the backlogs and challenges that this sector may face. ”

The two-year-old agency, whose executive director is Chris Alexander, an activist attorney who helped draft the state’s marijuana legalization law, is facing mounting lawsuits and criticism of its licensing process. Applicants have filed lawsuits accusing the agency of overstepping its authority. provide conflicting guidelines And discriminatory against white men in its pursuit of diversity.

Mr. Alexander acknowledged that his agency could do more to improve the licensing experience and said he believed Ms. Moy “would help us get to where we need to be.”

Lauren Rudick, an attorney who has helped clients file more than 100 permit applications, said she welcomed the review and hoped it would create a transparent process for submitting applications and resolving issues along the way occur.

She said the licensing process was inconsistent in terms of guidelines and communication with applicants and there was no process to resolve conflicts. She has watched in frustration as customers who took painstaking steps to do everything right were passed over for licenses that went to people who cut corners and seemed to benefit from personal relationships with agency officials, she said.

“We want to have a system that is repeatable and predictable so that when someone comes to us for licensing, we can give them an idea of ​​what to expect,” she said. “But from now on it’s ‘be flexible and pivot or die’ because we just never know what the state is going to throw at us.”

The rollout has been delayed for months by lawsuits, the state’s months-long regulatory process and the state’s inability to provide the seed loans and real estate it promised to the first 150 pharmacies. The hiccups have left some companies in financial distress and undermined efforts to use a $5 billion industry to help small businesses and rebuild communities hit by the war on drugs.

Although officials have issued about 500 licenses for dispensaries since November 2022, only 85 legal stores have opened across the state. Only ten of these pharmacies have received government real estate and financial support. The number of stores far exceeds that of their unlicensed competitors, of which more than 1,500 are located in New York City alone.

The rogue stores have defied orders to close, causing confusion among consumers and raising fears that they were selling unsafe products to adults and children. Their rapid spread has fueled frustration over the state’s slower approach to opening stores.

A top official at the cannabis management agency was placed on administrative leave last week after a processing plant owner accused him of taking revenge on her for speaking out in a report published by New York Cannabis Insider. The complaint against the official, Damian Fagon, the agency’s chief equity officer, was referred to the state inspector general’s office for investigation.

Mr. Fagon declined a telephone request for comment on Sunday. In his role, Mr. Fagon oversees the state’s efforts to achieve the social and economic equality goals set out in the Legalization Act, which aims to have half of all permits go to people who harm experiencing the anti-cannabis policy; women; racial and ethnic minorities; distressed farmers; and disabled veterans.

His accuser, Jenny Argie, said in an interview that Mr. Fagon retaliated against her company, Jenny’s Baked at Home, after New York Cannabis Insider published parts of a conversation with him about the state’s inability to punish bad actors, that she had recorded. A month after the article was published, her products were recalled — a first for the state — and her business was temporarily closed, she said.

Ms. Argie, one of hundreds of entrepreneurs who joined the state’s cannabis program after the hemp industry went bankrupt, said the state’s recent actions have left her without money to run her business and destroyed her reputation.

“What kind of government office are we running here?” she asked, adding, “I hope that eyes will be on this – that if they can get rid of these people, we can start over and solve the problem.”

Annette Fernandez, a legalization activist and managing partner of High Exposure Agency, a cannabis business development firm, said the retaliation claim was concerning because it could have a chilling effect on the industry’s willingness to provide feedback to regulators. She defended Mr. Fagon, saying sidelining him would distract from the state’s plan for equality, the goal legalization activists had fought hardest for.

“Regardless of his hubris,” she said, “he is still the greatest advocate for equality.”