The New York Office of Cannabis Management has released its inaugural annual report on the state’s implementation of a legal adult use cannabis program.
The report, which will be submitted to the governor and the legislature annually by January 1, comes just days after the first legal adult use sales took place at Manhattan’s Housing Works Cannabis Co., a Conditional Adult Use Retail Dispensary (CAURD) licensee. In making these sales, Housing Works Cannabis Co. met a goal that regulators trumpeted repeatedly throughout 2022: that New York’s legal adult use cannabis industry would launch before year’s end.
However, much more work remains to be done. The other dozens of CAURD licensees need to get up and running, and regulators still need to finalize the rules that will apply to the state’s adult use industry beyond this conditional phase intended to give a small group of small farmers and justice-involved individuals a head start.
The report concludes with eight recommendations to “support and strengthen the efforts already underway to achieve the purposes and intent” of the cannabis law. Among them: that regulators “use every tool possible to shut down … illegal operators,” further expand the medical cannabis market, and support environmental and sustainable cannabis practices.
One area where regulators will continue work in 2023 is around the precise definition of “what constitutes a community disproportionately impacted” (CDI) by enforcement of previous drug laws. People from these areas will be “prioritized” for equity licenses.
Members of the Office of Cannabis Management are working with the Division of Criminal Justice Services (DCJS) to compile millions of cannabis-related arrest records and are currently “cleaning and analyzing the arrest dataset.”
“The team is currently working to build out this comprehensive definition, and has consulted several variables to identify those that significantly demonstrate which communities were most impacted by cannabis prohibition and determined that an initial focus on cannabis arrest data could reliably inform our policies,” the report noted.
Since lawmakers passed the Marihuana Taxation and Regulation Act in early 2021, social equity has been a focus of regulatory efforts. MRTA, for example, set the ambitious goal to allocate 50% of all licenses to equity applicants. The report notes that roughly 400,000 criminal records for qualifying cannabis-related offenses have been expunged or are in the process of being expunged. The Office of Cannabis Management plans to release its Social and Economic Equity Plan in 2023 to dive deeper on the topic.
New York’s cannabis industry, with all of its intentionality from lawmakers and regulators to be equitable, is swimming upstream when it comes to unlicensed cannabis sales.
Since September 2021, the Office of Cannabis Management fielded more than 400 complaints about unlicensed businesses. The next step, according to the report, is an investigation, and then, “if appropriate …enforcement action.” This includes the issuance of more than 200 cease-and-desist letters. People and entities in receipt of one of these cease-and-desist letters are “warned that continuing operations as an illicit business may impact their ability to participate in the regulated cannabis market.”
To many of New York’s lawmakers and city officials, that’s not enough. Calls are rising for regulators and the legislature to come up with solutions to curb unregulated cannabis sales, which are happening in pop-up shops, bodegas, and on sidewalks. To that end, in December, in a public education effort, regulators released a QR code system, now required to be posted on storefronts, that allows consumers to quickly verify that a store is regulated by state officials.
When it comes to public health, the Office of Cannabis Management “monitors adverse events” related to medical cannabis products through the Adverse Event Reporting Tool. For products on the adult use market, regulators are “developing procedures that will allow for consumers to report adverse events related to adult-use cannabis products.” More on that will be forthcoming from regulators, according to the report.
Data will play a key role in the success of New York’s cannabis program, and regulators are creating a “robust data monitoring plan” that harnesses sources including population-based surveys and healthcare and sales data, according to the report.
MRTA also included the creation of a cannabis research license, which would allow the license holder “to conduct research on the efficacy and safety of administering cannabis as part of medical treatment, and to conduct genomic or agricultural research.” The report notes that the Office of Cannabis Management has “begun drafting regulations to support the establishment of the cannabis research license.”
Impaired driving is a policy area that lawmakers and regulators regularly return to, as there are many unanswered questions. For example, in lieu of a national standard for impairment, like with alcohol, regulators are left to lean heavily on Drug Recognition Experts (DREs) to fill in the cracks. New York’s Office of Cannabis Management, for example, has entered into a memorandum of understanding with the state’s Department of Motor Vehicles to “expand capacity for cannabis-specific support staff to assist with public safety campaigns as well as coordinate efforts to expand the Drug Evaluation and Classification program’s Advance Roadside Impaired Driving Enforcement (ARIDE) and Drug Recognition Expert (DRE) trainings across the state.”
The report also highlights the ways in which the state’s medical cannabis program has been expanded, including the approval of home grow regulations. As of September, there were more than 124,000 registered patients in the program, and nearly 3,900 registered providers.
In addition to this work on adult use and medical cannabis, the Cannabis Control Board has finalized regulations for the cannabinoid hemp program, which includes cannabidiol (CBD) products. The expanded cannabinoid hemp program now includes 3,265 licensed CBD retailers, 50 licensed processors, and 475 licensed distributors.
“We have, as I’ve said throughout the year, built the plane while flying it,” Office of Cannabis Management executive director Chris Alexander wrote in the report. “There is still a great deal of work to do as we build out a fully supportive system that ensures we’re living up to the equity goals.”
