New York’s adult use cannabis industry rollout has taken its first big step forward with the Senate’s approval of Gov. Kathy Hochul’s two key cannabis regulatory nominations.
In late March, former Gov. Andrew Cuomo signed the Marijuana Regulation and Taxation Act (MRTA), after years of failed negotiations with sponsors Assembly Majority Leader Crystal Peoples-Stokes and Senator Liz Krueger.
On Wednesday, Hochul, who has been governor for just days following Cuomo’s resignation amidst sexual harassment scandals, put forth two names to regulate New York’s forthcoming adult use cannabis market.
Hochul nominated Chris Alexander as executive director of the Office of Cannabis Management, a powerful position that will put Alexander at the helm of the most eagerly anticipated legal adult use market in the US. Alexander was most recently the government relations and policy manager of the cannabis company Village, and is the former policy coordinator for the Drug Policy Alliance. DPA has for decades been behind the passage and implementation of many of the country’s adult and medical use cannabis laws, including New York.
Hochul nominated Tremaine Wright, a lawyer and former member of the Assembly representing parts of Brooklyn that include Bedford-Stuyvesant, to chair the state’s Cannabis Control Board (CCB).
The Senate voted in favor of the two nominations on Wednesday night. Krueger, who is also the chair of the Senate Finance Committee, which advanced the nominations earlier on Wednesday, told Cannabis Wire that she was “extraordinarily pleased” with Hochul’s nominations.
“Their hard work, knowledge, and dedication will ensure that the historic law we passed this year will be implemented the right way, with a focus on equity that brings real benefits to the communities that have suffered the most under prohibition,” Krueger told Cannabis Wire, adding that she was “grateful” that Hochul showed “her seriousness of purpose and collaborative vision by moving swiftly to make such excellent nominations.”
Krueger continued, “The process of implementing MRTA has been delayed too long, but finally we are seeing some light at the end of the tunnel.”
During initial discussion and passage in the Senate Finance Committee earlier on Wednesday, both nominees fielded questions on topics ranging from timelines to competition.
“If we were imagining a best case scenario, I could not imagine it happening quicker than three months,” Tremaine said in response to a question about when rules might be released. “And that, I think, is even, still, us speeding through.”
Another question focused on how regulators could “keep big companies out of cannabis.”
Alexander said he wanted to “push back on one thing,” and to clarify that the goal of the legislation wasn’t necessarily to “prevent big business from coming into the industry in New York, but definitely from allowing that to be the only operators in the space.”
Alexander said limitations on vertical integration, for example, work toward this goal, as do the technical assistance and “promise of capital” to up and coming entrepreneurs.
“Now, we’ve still got to figure out where all that capital is coming from, but there is a commitment by the state to stand these businesses to make sure they are generating revenue for the people of New York,” Alexander said.
Cannabis tax revenue remaining after program costs are covered will primarily go toward three funds: a “state lottery fund,” which will get 40%; a “drug treatment and public education fund,” which will get 20%; and a “community grants reinvestment fund,” which will get 40%.
Senator Diane Savino, a longtime supporter of the medical cannabis program in the state, asked Alexander about New York’s “incredibly sophisticated, illegal marketplace.”
“So, how do we convert people in New York State?” Savino asked, adding her concerns over the Weed World trucks that have set up shop in tourist areas.
Alexander stressed the need for “a robust public education process” that emphasizes to consumers what’s legal and what’s illegal, as well as an effort to bring consumers a wide variety of products that are regularly available at a competitive price.
Tremaine also emphasized the importance of education campaigns.
“An educated population is a better population for us,” she said.
Savino expressed some concern that Tremaine didn’t have any cannabis-related experience.
“I spent a lot of time banging my head against the wall on this. I’m prepared to help you with it. I think you have a lot to learn. A lot to learn. You will see just how complicated this industry is. And why so many people fail,” Savino said, later offering congratulations after Tremaine was confirmed.
What happens next? Hochul will make two more appointments to the board (which the Senate will not confirm) and each chamber of the legislature will make one CCB appointment. The Chief Equity Officer will be appointed by the CCB by supermajority, once it’s up and running. Finally, an Advisory Board will be formed through both gubernatorial and legislative appointments.
Meanwhile, major players from the cannabis industry, like national tracking software Metrc, west coast brand Cookies, and cannabidiol pioneers the Stanley Brothers, are all already registered to lobby in New York, as Cannabis Wire first reported. Transportation, warehouse, and tech companies have also registered, and as Cannabis Wire also reported, as are other groups, from the New York City Bar Association to the Commission on Independent Colleges & Universities , alongside multi-state cannabis operators like Curaleaf and Cresco Labs.
Krueger spoke to the full Senate before their vote, stressing that legislative tweaks might be necessary going forward.
“I think government and public service, by its definition, is realizing it can make things better, it can create things, it can take great leaps into sometimes unknown futures,” Krueger said. “I think that both of our nominees, Tremaine and Chris, are to some degree taking a leap into an unknown future because they have the opportunity to help shape exactly what this model is going to be in New York and whether we are successful or not and whether or not we need to make legislative changes.”