A meeting of New York’s cannabis regulators on Tuesday was set to be a blockbuster before the agenda was even released.
The Cannabis Control Board (CCB) approved the final package of rules for the state’s adult use cannabis industry, a step eagerly awaited since cannabis became legal in the state two years ago. However, this moment arrived to little fanfare, and a lot of frustration and tears.
Tuesday’s meeting took place against a backdrop of intense tumult in the state’s cannabis landscape. Litigation has fully stalled the rollout of the state’s program to award early retail licenses to justice-involved individuals, intended to give this cohort a head start before the state’s large medical cannabis operators and other interested applicants entered the scene.
Many of the people who spoke during the public comment window on Tuesday expressed fear over losing the businesses they’ve spent months working toward before they have a chance to open their doors.
“Today is a day of mixed emotions for many who are excited to see the market launch,” said Chris Alexander, executive director of the Office of Cannabis Management. “I acknowledge our licensees who are currently working diligently to get open. And I just want to express, on behalf of the Office, a continued commitment to the success of those licensees. We will continue to work diligently.”
Alexander added that work is ongoing related to enforcement against unlicensed cannabis shops, another issue that has strained the state’s efforts to launch a legal adult use industry. Alexander did not give any specifics, but said that a more comprehensive update will come during the CCB’s October meeting.
In addition to approving the adult use rules, regulators approved application forms in preparation for the opening of three licensing application windows: adult use licensees, from cultivation to retail; new medical cannabis licensees; and research licensees. Regulators expect to open the adult use license application window in October.
Existing medical cannabis operators in the state, known as Registered Organizations, or ROs, many of which are powerful multistate operators, will be able to legally enter New York’s adult use market in December. These license holders will be the only entities allowed to be vertically integrated, meaning they can control their own products from seed to sale; new adult use licensees will be prohibited from holding licenses across the supply chain. Some of these ROs are also behind one of the lawsuits challenging the retail licenses for justice-involved applicants, known as Conditional Adult Use Retail Dispensary (CAURD) licenses, as Cannabis Wire has reported.
Regulators denied, with no details, a lab license application from an entity called Calyxis Laboratories LLC.
Axel Bernabe, OCM’s chief of staff and senior policy director, resigned during the meeting, and took a few minutes to recognize the “milestone” moment.
“Where are we now, today?” Bernabe said, after sharing OCM’s path from nonexistent to a staff of more than 160. “It’s an absolute top priority for us to destroy the illicit market. It’s an absolute priority for us to open the CAURD program.”
Bernabe thanked a wide range of people, including Sen. Liz Krueger and Assembly Majority Leader Crystal Peoples-Stokes, the authors of the state’s legalization bill, as well as advocates and policymakers who helped shape the earliest versions of cannabis rules in New York, like Kassandra Frederique and Melissa Moore of the Drug Policy Alliance, and Andrew Rosner and Jesse Campoamor, among others.
Most of the meeting consisted of public comment, with some 40 people registered to speak. The comment period often grew heated, as speakers’ voices moved between quivering and shouting. Many begged regulators to “pump the brakes” and to “hold off” on allowing the existing large cannabis operators in the state’s medical cannabis industry to flood the adult use market.
Jeffrey Hoffman, a lawyer, held a sign that read “Codify CAURD.”
Dasheeda Dawson, founding director of Cannabis NYC within the Department of Small Business Services, spoke during the public comment period.
“I stand here to firmly say ‘no to ROs’ and to stand with the CAURD licensees as well,” Dawson said. “I do think it’s important, just as a government official, someone who chose to sacrifice my own journey in this industry, to acknowledge how difficult it is to move government. Government has never supported Black and Brown, and/or social equity. We are literally doing what America has never done before.”
Anthony Feliciano, vice president for advocacy at Housing Works Cannabis Co., the first legal shop to open in the state, last December, spoke to support the CAURD program. Housing Works Cannabis Co. is one of the non-profits that received an early CAURD license.
“We were helped by the support of OCM, as well as regulations that allow us to be among the first movers. We want all – all – CAURDs to have the same experience,” Feliciano said. “This is why we do not believe that this can happen if the Registered Organizations are allowed to enter the market at the same time as the previous licensed CAURD applicants.”
John McDonald, executive vice president of The Doe Fund, another non-profit CAURD licensee, also spoke.
“CAURD is farsighted and empowers people impacted by mass incarceration to access economic opportunity, and made our venture with our business partner Harbor Community possible, leveraging their financial investment and the Doe Fund’s expertise with the population. This kind of public-private partnership inspires innovative solutions to longstanding and seemingly intractable social ills,” McDonald said.
Kavita Pawria-Sanchez, CEO of CannaBronx, said that this is a “really tough moment” because the early entry of multistate operators to New York’s market is “poisonous to social equity and reparations.”
“Their entry has to be delayed in order for this to succeed,” Pawria-Sanchez said. “We can’t have corporate greed and Big Weed take over this market and undermine the dreams of social equity and reparations that bring most of us to this room.”
Hal McCabe, mayor of the Village of Homer and interim executive director of the Cannabis Association of New York, said that CAURD licensees are “balancing on the end of a pen cap.” He also called out differences in the rules for conditionally-licensed growers and what the rules allow for ROs’ grows, such as the ability to grow indoors.
In addition to the CAURD program, regulators allowed the state’s hemp farmers a head start in growing for the adult use industry. These conditionally-licensed cultivators are approaching harvest season with myriad uncertainties, and some said during Tuesday’s public comment period that they’ve needed to utilize mental health crisis intervention experts.
Katherine Miller, a conditional cultivator, spoke to “express my concern about the continued rocky road to legalization.” Miller also highlighted communication issues with regulators, including unanswered emails, and added that biomass from last year is still “sitting in bags on the floor of the processors as they wait to see if orders are going to materialize.”
“An extremely wet summer has led to a multitude of issues from greatly increased pest and disease pressure to outright crop losses. Many of these issues would have been mitigated if not eradicated had we been able to grow indoors,” Miller said. “This is another example of how the ROs coming in and growing at a huge canopy will push the rest of us out of the market. We just cannot compete.”
The meeting ended with the Board going into executive session to discuss the lawsuits that have halted the CAURD program, with the exception of the roughly two-dozen entities that managed to become operational before the injunction.