New York Cannabis Regulator Reflects on Recent Challenges, From Lawsuits to Criticisms, and the Year Ahead

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New York Cannabis Regulator Reflects on Recent Challenges, From Lawsuits to Criticisms, and the Year Ahead

New York Cannabis Regulator Discusses Challenges and Plans for the Year Ahead.

New York Cannabis Regulator Reflects on Recent Challenges, From Lawsuits to Criticisms, and the Year Ahead. New York’s cannabis regulators have faced choppy waters the past few months. 

The Cannabis Control Board started off the year with a chaotic meeting in January, during which tensions arose over communication issues, both among regulators and with industry members. Then a regularly scheduled meeting on January 24, during which the first swathe of adult use retailers were expected to be licensed, was abruptly canceled with less than 24-hours notice, leaving a wake of confusion. 

On the heels of all of this, Gov. Kathy Hochul became publicly critical of the adult use rollout. Broadly, she said the issuing of licenses has been too slow (50 shops have opened since December 2022). And, specifically, she said that she told regulators to “go back to the drawing board. Work harder. Get this done” after becoming aware of their plan to issue only a handful at the late January meeting. 

The CCB will meet on Friday, and they are expected to issue that first batch of non-conditional adult use licenses.

Ahead of this week’s meeting, Cannabis Wire had a far-ranging interview with Tremaine Wright, chair of the Board, to talk about criticisms, cannabis enforcement, growers, and more. 

(This interview has been lightly edited for length and clarity.) 

Alyson Martin, Cannabis Wire: Gov. Hochul has alluded to a power struggle between the Office of Cannabis Management and the Cannabis Control Board, recently saying that “Conflict was built in as to who’s the ultimate decider.” Do you agree or disagree with this assessment, and why? 

Tremaine Wright, Chair of the Cannabis Control Board: 

The governor has identified what is a challenge in how the legislation was created. That it’s a lot of decision-making power afforded to the Cannabis Control Board. But, anybody watching how we set up our organization, they will understand that a lot of the things that are identified as operational have been, those powers have been given to the CCB. The CCB has since, I think, during our first meeting, we have transferred the responsibility for many of the operational things to the Office, because that is how it’s going to be executed. And so I think there was some – for people looking in – there was some confusion of sort of who is responsible for these day-to-day operations. I think that the CCB and OCM have determined that operational day-to-day tasks, and the work that it is to sort of push forward the needle of the work everyday, sits with our Office of Cannabis Management. And the Board has maintained sort of the larger policy and regulation approval and the license approval work. 

The legislation was big picture, and it said all powers go to the Cannabis Control Board. However, a board of five, that only has one full-time member, cannot execute and implement application processing. We have to give that to the Office. I think that, when you get to the broad strokes of it, there is an assumption the Board manages everything. And really, the Board cannot feasibly manage everything. 

Martin: Gov. Hochul was recently asked by a reporter about potential cannabis regulatory leadership changes. She said, “I’ve had meetings nonstop with my team about how we can get more licenses fulfilled.” Could there be leadership changes at OCM or CCB?

Wright: I’m with the governor. I have not heard any rumblings or statements from the chamber regarding changes. I think that the chamber, as well as the Office of Cannabis Management and the Cannabis Control Board, are really laser focused on getting licenses approved and assisting licensees with opening their doors. We have almost 300 cultivators in the state. We have over 200 brands in the state, and we’re trying to make sure that we have a solid pipeline so that those products can get to market, and that we’ll also be able to educate our consumers along the way. 

Martin: Senator Jeremy Cooney, chair of the Senate Subcommittee on Cannabis, and a handful of other senators recently sent a letter to you about the licensing timeline, expressing their desire that, like many, they want to see more licenses awarded as soon as possible. Can you share how many licenses you expect to award at the next Cannabis Control Board meeting?  

Wright: I don’t have that number. 

There’s been a lot of hesitation and frustration in the process, because everything from how we queue to injunctions and legal processes that have slowed us down, to also technology being a hindrance in some instances because our IT system is slow. There are just real challenges in lifting up a new system and executing a program as large as this that has so much demand. So I truly understand the frustrations. I think that the legislature was on the right track when they rolled out the conditional adult use program. We were able to get cultivators very quickly up and running. We attempted to do the same with dispensaries. However, it has been met with several filings in court. We have settled one case. We were not able to issue or work on the program from August 7th of last year until December 1. And since December 1, approximately 30 new stores have opened. So people are moving forward.  

But there is a natural concern that it has taken a while. These are the real hurdles and real challenges of people opening businesses. And also, the Office of Cannabis Management having to manage lots of litigation is a challenge. 

Martin: Gov. Hochul recently called the Dormitory Authority of the State of New York’s involvement in the social equity fund a “bad idea.” Do you agree or disagree with that sentiment, and why? 

Wright: I think the governor’s comments acknowledge that it was a huge undertaking for an institution like DASNY to shift gears and to try to utilize their expertise in something that was so different and new for them. DASNY builds, DASNY does launch development, DASNY manages money. And they were picking up the work of trying to locate small retail stores and to execute build outs and to finance small projects. That is a lot. It is a huge undertaking. And they were bold and willing to come forward to say, ‘you know what? We accept the challenge of doing this work.’ 

As the finance arm of New York State, they said ‘we are going to pick this heavy lift up,’ because there was no other institution that the state had readily available that could accept that challenge. So it was a challenge. It was a lot of labor. And, it, too, faced the challenges of the market. As soon as we announced that we were raising money for our fund, we saw cannabis investments almost come to a standstill across this country. That we were able to navigate that space and pivot how we were able to raise money because our partner DASNY is astute and they understand the market and they understand markets generally. So, they were able to help us to shift to a debt instrument, which now has fully funded the Fund that is being utilized to give loans to our small businesses.

Martin: Speaking of the Cannabis Social Equity Investment Fund, what’s the latest? There have been very few updates from the Board or DASNY. 

Wright: Really, the answer comes from the Fund. And Chicago Atlantic is the Fund’s – they are our investor. They do not manage the execution of loans with licensees, they don’t oversee the buildout and opening of stores. That’s [Lavetta] Willis. They show up and they hire the people who help do the buildout, to help you stock your store, to bring in registers, to train the employees. 

The Fund is still doing the work that they were created to do. They are managing the investment and they are executing loans and helping our licensees to open their stores.

Martin: You referenced Lavetta Willis, will she speak at an upcoming CCB meeting to give an update? 

Wright: I don’t know if she’s planning to come to the meeting. The [DASNY] Public Policy Committee will be going back to have conversations with them and to follow up to see what the progress is. 

However, as I said, what we’re looking at is nine weeks of activity. And in the nine weeks, what we’ve had is a flurry of activity to get stores open. So that really has been the primary objective. I think that it may take a few more weeks before we’re ready to say, ‘hey, let’s pause and give a public announcement.’ I just don’t think that that was their priority in this moment. The priority really has been to get licensees who were stuck in limbo since August up and running.

Martin: New York City Council members have called for a centralized hub for data related to cannabis enforcement. Are there any plans for such a hub? 

Wright: Well, actually, it’s people just going to the same institutions that they’ve always gone to for enforcement information: the sheriff’s department, the tax department, the police department, and the Office of Cannabis Management. It’s no different than, say, a restaurant. If you wanted to find out what the violations are, you might go to the health department. You might go to the tax department. You might even go to sanitation, because they each have an arm of enforcement with that particular entity. And the same holds true for any business in cannabis. The only difference is that instead of it being maybe the department of health, they’re also going to bring in the Office of  Cannabis Management. But they’re still subject to review and oversight from taxation, sanitation, and the police department as well, as all other businesses. So I think that it sounds nice to say we want to have one centralized answer, and we don’t want to look anywhere else. 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.

Martin: Many growers have had a rough few years in the state. Two lawmakers in particular, Sen. Michelle Hinchey and Assemblymember Donna Lupardo, have called for a fund to lift up growers. Do you have any updates on the possibility of a growers’ fund, or any other efforts related to cultivators? 

Wright: That is strictly within the purview of the legislature. And so I think that Senator Hinchey and Assembly Member Lupardo are doing the heavy lifting of educating other members and also exploring what that could potentially look like. I think that they’re going to be leading the charge and assessing whether or not that is actually a good move forfor the state to make. 

I don’t think that there is anything else specific that is brewing. I think that the elected representatives are definitely determining what is necessary to support our farmers. And trying to make sure that those solutions end up in this year’s budget and/or new legislation.

Martin: What keeps you up at night, when it comes to cannabis policy? 

Wright: One of the largest challenges continues to be managing our public concerns and misconceptions about cannabis. 

It is educating the average New Yorker about the challenges that we face as we roll this new industry out, as well as educating them on safety and societal impact as well as misinformation. And then also something as great as the economic and medicinal benefits of it. So, figuring out how we weave that together so that we can educate people. 

Martin: From your desk, what area of cannabis policy are you most excited to tackle this year? 

Wright: I am truly looking forward to our consumption licenses. I think that that is going to create so many opportunities for experience. And I think that’s where New York shines. There is no other place in the world that can offer you an experience like a New York experience. And I think the same holds true for the New York cannabis experience. 

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Region: New York

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