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News

NY Governor Orders Review of Office of Cannabis Management

By:
S.J. Steinhardt
Published Date:
Mar 18, 2024

 

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New York Gov. Kathy Hochul has ordered a complete review of the state’s Office of Cannabis Management (OCM) in the face of a lagging rollout of the state's legal cannabis industry, The New York Times reported.

The review, to be led by Jeanette Moy, commissioner for the Office of General Services, aims to shorten the time it takes to process applications and get businesses open, officials told the Times.

Last month, the governor called the state’s rollout of legal cannabis a “disaster” in an interview with the editorial board of the Buffalo News. There were only 59 operational legal cannabis dispensaries in the state as of Jan. 26. According to the OCM, there are currently 83. The regulator has awarded only 109 licenses so far this year—either to open dispensaries, grow cannabis or manufacture products—out of 7,000 applications received last fall. The OCM has only 32 people assigned to evaluate the applications, the Times reported.

“I have full confidence in Commissioner Moy’s ability to identify areas that need improvement, establish standards and processes across agencies, and jumpstart the next phase of New York’s legal cannabis market,” Hochul said in a statement issued on March 18.

In an interview with the Times, Moy said her goal was to work with the cannabis management office “to identify ways in which we can support them as they look to streamline and move forward some of the backlogs and challenges that may be faced in this industry.”

Chris Alexander, the OCM’s executive director, acknowledged to the Times that there was more his agency could do to improve the licensing experience and said he believed Moy “would help us get where we need to be.”

Lauren Rudick, a lawyer who has helped clients submit over 100 license applications, told the Times that she welcomed the review and hoped that it would lead to the creation of a transparent process for submitting applications and resolving issues that arise during the process.

“We want to have a system that is repeatable and predictable, so that when someone comes to us for licensing, we can give them a sense as to what they can expect,” she said. “But as of right now, it’s ‘be flexible and pivot or die,’ because we just never know what the state is going to throw at us.”

The 83 legal dispensaries reported by the OCM  are out of roughly 500 licenses for retail dispensaries issued since November 2022, the Times reported. Only 10 of those dispensaries have received state real estate and financial assistance. More than 1,500 unlicensed competitors have set up shop in New York City alone, the Times reported.

Damian Fagon, the OCM’s chief equity officer, was placed on administrative leave last week after the owner of a processing company accused him of retaliating against her, the Times reported. New York Cannabis Insider reported about the retaliation accusation issued by the owner, Jenny Argie, on March 12. She said in an interview with the Times that Fagon retaliated against her company, Jenny’s Baked at Home, after parts of recordings she had made of a conversation she had with Fagon about the state’s failure to punish bad actors were published in a Nov. 15, 2023,  article in New York Cannabis Insider. Specifically, the November article reported that large out-of-state corporations were breaking state regulations to box out smaller companies, and that the OCM was aware of the problem but doing nothing about it. A month after that original article was published, Argie's products were recalled, in a first for the state, and her business has been temporarily shut down, she said.

The Times reported that Argie's complaint was referred to the state inspector general’s office for investigation. Fagon declined a telephone request for comment by the Times.

Argie told the Times that the state’s recent actions have left her with no money to run her business and have ruined her reputation. “What kind of government office are we running here?” Argie asked. She added, “I’m hoping that eyes get put on this—that if they can get rid of these people, we can start over and fix the problem.”