At a New York Cannabis Control Board meeting on Friday, cannabis regulators issued more than 100 adult use business licenses as they aim to lift up legal operators and displace the persistent unregulated industry.
Board members swiftly passed a resolution to approve 45 retail dispensaries, 31 microbusinesses, 14 cultivators and 14 processors. This brings the total of adult use licenses issued by the board this year to 223.
“I just want to take this second to say that I continue to get emails from people concerned about numbers of licenses,” Board member Jennifer Gilbert-Jenkins said.
Chris Alexander, executive director of the Office of Cannabis Management, responded that “we are very intent on growing the market responsibly,” and “excited to continue the process and the work of issuing licenses. We have a lot more to go.”
The Board then also quickly approved a resolution approving lab licensees.
Next, the Board moved a resolution to approve updated enforcement regulations, which were released for public comment late last year. But, as Gov. Kathy Hochul pushes expanded enforcement legislation through the budget, regulators are likely to put forth fresh regulations in the coming months.
“The state legislature is currently discussing an expansion to the office’s enforcement powers,” Alexander said. “Should the budget proposal that has been put forward by the governor advance, we will likely also need to update these, on an emergency basis.”
The Board also approved a resolution to waive licensing fees for two years for the state’s conditional cultivators transitioning to full adult use licensure; these fees can range from $4,500 to $40,000. These licensees were hemp farmers who became the state’s first adult use cannabis growers. They got a head start in 2022 and have struggled amid a slow retail rollout.
The “initial grow season and the lack of the available dispensaries, in a timely fashion, resulted in great angst in our farmer community,” Alexander said. “We were very intentional in trying to create opportunity for New York small farmers. There’s obviously always the frustration of going first.”
He added that the waiving of the fees “would provide some semblance of relief to the farmers.”
“Farmers are the backbone of our State, and we’re making sure the family farms across New York that are building our cannabis industry have a real chance to succeed,” Hochul said in a statement after the vote.
During his executive director’s report, Alexander said he has fielded “a lot” of emails and comments from applicants who, for example, might be number 10 in the licensing queue and see number 13 open.
“The order that you appear in the queue does not represent the order in which the license will be issued,” Alexander said. “This is posted all over our public documents.”
He asked licensees to be in better communication with OCM as they’re nearing opening, and to also be “responsive” related to any application deficiencies.
Tabatha Robinson, director of economic development for OCM, gave an equity update. Typically, this would come from Damian Fagon, chief equity officer, but he’s been placed on administrative leave after an allegation related to retaliation. Later in the meeting, during public comment, multiple speakers expressed support for Fagon and his work on equity in the state’s cannabis industry.
Robinson highlighted that regulators have “surpassed” the goal in the Marihuana Regulation and Taxation Act of 50% of licenses going to qualifying social equity applicants. So far, the number is 87% for retail licensing, Robinson said.
“Looking across all our licenses today, we are reminded that the state wanted us to make sure these groups were in the adult use market, and the agency is proud to say we accomplished that goal,” Robinson said. “Our path to making equity a reality was as simple as apprising all New Yorkers of the opportunity in this space.”
John Kagia, director of policy for OCM, gave a market update. Adult use cannabis sales, which kicked off in December 2022, have so far reached $237 million, $77 million of which is just from the first three months of this year. Flower and pre-rolls continue to account for the most sales, followed by edibles and then vapes and concentrates.
And, retailers are being approved and are opening at a more rapid pace.
“I would offer a caution, particularly to the licensees, the retailers, who are opening the stores at this point. Be measured in how much you are ordering on day one. You can always restock, but you don’t want to overbuy before you understand what the purchasing dynamics are going to be in your specific neighborhood,” Kagia said. “The statewide trends may not be necessarily reflective of the consumer trends in your given neighborhood, and the profile of consumers that you’re going to be attracting.”
Alexander welcomed Nicole Triplett as OCM’s chief of staff, a position that Axel Bernabe previously held.
During the public comment period, some people who spoke expressed gratitude for the regulators’ work, while others asked questions about the process, or, at times, expressed deep frustration and anxiety about their futures. Sophia Mortel, a provisional licensee in the Conditional Adult Use Retail Dispensary (CAURD) program, told regulators that her business had its final inspection three months ago and they were told they had “zero deficiencies.” But since then, the process has stalled.
Mortel said it’s likely that they will default on their $20,000 rent due on April 1.
“You sit here today giving out all these licenses,” Mortel said. “Why don’t you first finish what you started? Finish out the CAURD program. License the people who have finished buildings, no deficiencies, and completed inspections that you’ve decided to abandon. This is unethical. And what has been a lifetime dream of mine has now become a nightmare.”
Loud cheers, claps, expressions of “Amen” followed.
Sasha Nugent, director of retail for Housing Works Cannabis Company, expressed support for the 1,000 foot buffer rule in “preventing oversaturation,” as well as Gov. Hochul’s plan to give more power to localities on enforcement against unregulated operators.
“However, additional legislative measures are necessary to address systemic inequities without further criminalizing impacted communities,” Nugent said. “I urge the legislature to prioritize social equity, address regulatory gaps, and invest in comprehensive support structures to ensure the success of equity in the New York legal cannabis market.”
Jeffrey Hoffman, a lawyer who represents a wide spectrum of clients including licensees and folks clearing their records, spoke during the public comment period. Hoffman called the expungement provisions of the law a “tremendously critical part.”
“The conservative judges in the state of New York are not following the law for that expungement for the high level cannabis offenses,” Hoffman said. “We’re going to need your assistance in getting that right. The conservative judges in the state are not doing it right.”
