New York’s Cannabis Control Board met on Friday to award its first batch of non-conditional licenses in the rollout of the state’s adult use cannabis industry, and to approve new regulations, including for home cultivation.
The meeting of the Board, its first since a last-minute cancellation in late January that led to frustration and confusion, took place at Hudson Valley Community College.
The major news from the meeting was the approval of more than 100 licenses, including: final and provisional retail licenses, cultivator, microbusiness, processor, distributor licenses, and research licenses. Two-thirds (66%) of those licenses awarded Friday went to Social & Economic Equity Certified applicants, regulators said. Nearly 7,000 applications were submitted for adult-use retail and microbusiness licenses.
“This moment has been a long time in the making. We assure you, it only represents the beginning,” Board Chair Tremaine Wright said. “The Office has been diligently working to prepare as many applications as possible for consideration, and we, the Board, will continue to approve additional licenses at future board meetings,” Wright continued, adding that the Conditional Adult Use Retail Dispensary program, which has been hit by multiple lawsuits, is “back on track and licensees are opening stores.”
Today, more than 70 CAURD locations are open and operational throughout the state. Until now, all the cannabis grown and sold in the state has been under conditional licensing.
The mood during Friday’s meeting was at times exuberant as regulators approved the slew of licenses and gave cheery market updates. Other times, the tone was testy and suggested that the regulators aren’t working completely in lockstep as the rollout continues for what is poised to be one of the biggest markets in the world.
Wright hit head on the turbulence that applicants and hopefuls have experienced this year.
“It has been a rocky start to 2024 for cannabis in New York State,” Wright said. “We’ve read your letters and we’ve heard your concerns.”
The regulations approved on Friday included proposed adult use home grow rules, which track closely against those that already exist for patients registered with the medical cannabis program. Other approved regulations included proposed amendments to the adult use rules, and revised medical rules.
John Kagia, director of policy for the Office of Cannabis Management, noted that those who choose to grow cannabis at home will be similar to those who brew beer, a small percentage of drinkers; and, if a hobbyist tinkers, he said, they’re also still likely to purchase from licensed retailers.
Kagia also highlighted that, to date, licensed New York cannabis shops have generated $174 million in sales, with edibles and flower being the most frequently-purchased product types.
During the meeting, lacking communication came up, again. This topic has come up at other Board meetings and also at a New York State Bar Association panel in mid-January during which OCM lawyers fielded questions from New York lawyers.
“I’ve received many, many, many emails over the past month and a half by frustrated people who are having trouble getting contact with the office,” Board member Jennifer Gilbert Jenkins said. She suggested a call-in help line so people can “actually get in touch with a human being to ask their question,” because she’s hearing from people that they email and don’t hear responses when sent to a “generic” email address.
Chris Alexander, OCM executive director, said that the emails are read and cleared daily, but that some people are getting answers that they don’t want to hear. Other times, the responses are high-level.
“I think, at least from the responses that we see, is folks are not getting the response that they want,” Alexander said. “Whether it’s a standard response that ‘your application is in review,’ because we can’t provide additional detail at that time. And I know that’s not satisfying to hear, but sometimes that is the situation that it is just in review.”
Alexander added, “This is a process of us also internally getting, just getting better.”
Board member Jessica García asked whether the Board should consider more frequent meetings to speed up the rollout process.
“If we have to meet more often,” Garcia said, “we should do that. And I’m ready to make myself available so that we can roll these along and get these approved.”
Alexander responded that applicants can “help expedite this process, as well,” by responding to any requests from regulators within the 30-day window.
Gilbert Jenkins turned to the licensing queue in which applicants were placed at random in a lottery.
“I want to stop dancing around this and actually have the conversation,” Gilbert Jenkins said. “There are too many people that have been told that if they didn’t get a number that was low enough that their application was denied. And I want to make sure that that is clear that that’s not the case.”
Alexander responded that, “There’s been no denial sent at the time.The message to folks waiting is, is, you know, we’re going through this process.”
Gilbert Jenkins pushed back, noting that there are more than 7,000 liquor stores in the state, referencing the rough number of retail and microbusiness applicants.
“We probably have more than 7,000 illegal [cannabis] stores in this state,” Gilbert Jenkins said. so “As we are working to close down the illegal stores, there will be space for the legal ones,” Gilbert Jenkins said.
Wright jumped in to say that Gilbert Jenkins “hit the nail on the head” and asked Alexander for an enforcement update. Cannabis Wire had a far-ranging interview with Wright ahead of Friday’s meeting, and asked Wright whether a centralized data hub on enforcement might be in the future.
“It sounds nice to say we want to have one centralized answer, and we don’t want to look anywhere else,” Wright told Cannabis Wire. “But. I think that it does not acknowledge the reality that we have a number of city and state partners that have oversight of businesses, regardless of what they might sell. And they all have enforcement arms and they all get to enforce.”
Alexander responded during the meeting by saying that “the fact that there are an excess amount of illegal stores does not mean that that footprint being filled by a legal store is going to have a viable business.”
“Our team is doing what we can with what we have. But just like any other law, there is no world in which the initial bite at the apple is going to be perfect. What we have found is that while we have been successful in seizing cannabis from the illicit shops, we have had issues closing them down,” Alexander said, praising Gov. Kathy Hochul’s recent proposal to increase the authority of local law enforcement to shut down unregulated cannabis shops.
Hochul’s plan “would make that process more efficient to get to closures, but there’s still a lot of work to be done. There’s still a lot more state coordination. We’ve been able to train local law enforcement, local governments, to help be a part of the solution here,” Alexander said. “We are continuing to do the hard work. Our team is running around the state every single day, closing out these illicit shops. The problem is, it’s just not efficient. It has not been efficient.”
The tone of the public comment period was mixed. Some folks dished out strong criticisms of the rollout, while others applauded regulators for navigating a complicated launch.
“The work continues despite equity being on trial, media spin, and LinkedIn lawyering,” Dasheeda Dawson, founding director of Cannabis NYC within New York City’s Department of Small Business Services, said during the public comment period. “The numbers don’t lie. If you are a conscious cannabis consumer intentionally aiming to support social and economic equity, this is the most diverse market, from seed to sale.”
Dawson referenced a statistic from the New York City Sheriff’s Office that there are currently “about 2,000 illegal storefronts in New York City,” and added that the Joint Enforcement Task Force has conducted thousands of inspections, resulting in more than $40 million in fines and more than 20 million products “confiscated.”
“But, it’s not enough. The situation has become dire and presents an incredible risk for public safety and this equity-centered market that we’re actively building. The communities are confused and they actually think this is legal,” Dawson said, referencing the illegal shops. “So, we’re calling on the state to act, come back to the city and join us in the joint activity, expressly delegate the state’s expanded enforcement capabilities to our jurisdiction and allow local jurisdictions to please pass laws to help permanently close these stores.”
Dawson also said that some applicants, particularly CAURDs, are struggling to identify locations that meet the state’s buffer requirements.
“The absence of a map or list and scarcity mindset has made a perfect storm for anxiety, hostility, and even predatory behaviors among licensees,” Dawson said. “We’re calling on the state to publish a map, or at the very least, release the list of addresses with protection. And also consider potentially looking at that 1000 foot buffer being reduced for highly populated cities such as New York City.”
