The legal cannabis market in New York has been struggling due to incompetent leadership at the state Office of Cannabis Management, according to an internal review released on Friday. The report highlighted issues such as constantly changing licensing rules, lack of transparency, and a failure to enforce regulations, leading to a stalled legal market and the proliferation of illicit storefronts. Governor Kathy Hochul, who has labeled the state’s program a “disaster,” ordered the review in March to address the bureaucratic challenges and legal issues facing the agency.
As a response to the findings of the review, Governor Hochul announced that Chris Alexander, the leader of the agency, would be stepping down in the fall, and that reforms would be implemented to address the problems within the state cannabis office. The state initially legalized marijuana sales with a focus on social equity, reserving the first round of retail licenses for nonprofits and individuals with prior marijuana convictions. However, the process was marred by lawsuits, slow rollout, and other obstacles, resulting in only a little over 120 legal cannabis dispensaries opening since sales began in late 2022, compared to a significant number of black market shops.
In an effort to combat the proliferation of illicit shops, lawmakers passed legislation strengthening local officials’ ability to shut down illegal stores. Governor Hochul also took action by pressuring Google and Yelp to stop listing these unlicensed retailers online. The review highlighted the struggle of the Office of Cannabis Management to balance its social equity framework with the administrative duties of a government agency primarily responsible for licensing. Most of the agency’s senior leadership lacked experience leading regulatory entities, and the frequent changes in licensing processes led to a high number of applications requiring corrections.
The report outlined several policy fixes to address the agency’s issues, including hiring more staff to process licenses, streamlining the application process, and conducting public listening sessions to identify problems. Jeanette Moy, the commissioner of the state’s Office of General Services tasked with leading the review, emphasized the importance of acknowledging the problems within the agency in order to ensure its success. Despite the challenges faced by the Office of Cannabis Management, stakeholders expressed a desire for the agency to thrive and for the legal cannabis industry in New York to flourish.
