New York's cannabis industry says state's legal rollout has left them high and dry
There were more complaints this week about New York’s botched legal cannabis rollout, with dozens of farmers and retail store license holders telling the state’s Cannabis Control Board that bureaucratic delays and court injunctions have pushed them to the brink of bankruptcy.
The state’s authorization program for retail stores to sell cannabis for adult recreational use is far behind schedule; 160 stores should have been opened by now, but there are just 23 that are operational.
Zamea Lewis fought back tears as she recounted the bureaucratic snags and legal setbacks that delayed the opening of her family’s planned cannabis dispensary. Lewis was eligible for the first round of licenses in the state’s social equity program because she or someone in her family was adversely affected by the decades-long prohibition of the drug and was convicted of a marijuana-related offense.
Lewis told the board members that they even spent their son’s college tuition to rent two locations that have yet to be authorized to open.
“We gave everything we have, we have nothing left. Absolutely nothing,” Lewis said. “We're paying rent on two locations, and we have no more money. We don't know what the future holds.”
A recent court order temporarily halted the granting of the rest of the social equity licenses. A judge ruled that the Office of Cannabis Management erred when it prioritized those with criminal records for marijuana use or sale over other traditionally disenfranchised groups named in the initial 2021 law that legalized cannabis, like service-disabled veterans, and women- and minority-owned businesses.
Meanwhile, farmers who were granted licenses to grow cannabis in 2022 have almost nowhere to sell their crops.
Farmer Catherine Miller said she’s fed up with the red tape and lack of guidance and communication from the OCM.
“Unfortunately, we're often left operating in a vacuum,” Miller said. “Emails go unanswered. We have no point of contact. When we have questions, we reach out, and it's nothing. I can't tell you the amount of emails I have sent and have gotten zero response.”
In December, large international corporate cannabis companies will be allowed to enter New York’s market. Several speakers pleaded with the Cannabis Control Board to delay that date.
They said those companies — known as medically registered organizations, or ROs for short — have several advantages that they do not, including access to capital and permission to grow their crops indoors, which results in more frequent and bigger yields.
Renee St. Jacques with the New York Farm Bureau said allowing the big companies to open dispensaries later this year will push out the smaller farmers who were granted licenses under the social equity program.
“We see issue after issue, so many barriers that our farmers have to face,” St. Jacques said. “And allowing the ROs to come in is not the answer. It is the issue. And it's just going to push the farmers out, just like you've seen in other states.”
Members of the board listened to the complaints but did not comment publicly.
Gov. Kathy Hochul, who has been in office for two years, has cast blame on her predecessor, former Gov. Andrew Cuomo, and the State Legislature, who set up the regulatory framework for the legal cannabis rollout.
“I inherited a framework that was passed and enacted before my time,” Hochul said on Sept. 7. “We are working to implement it. First of all, we have to make sure that the illegal cannabis shops are being shut down.”
An estimated 3,000 illegal pot shops are currently operating in New York.
Hochul also blamed those who brought the lawsuit against the initial retail licenses and the resulting injunction. She said “larger (cannabis) corporate entities from outside the state” are behind the legal challenges, which have caused further delays.
Also at the meeting, another board member announced his resignation.
Axel Bernabe, the agency’s senior policy director who has overseen the troubled social equity licensing program, is the second board member to leave in recent months. Reuben McDaniel left in June after criticism that his role on the board conflicted with his post leading the state’s Dormitory Authority, which was facilitating funding for the program.
Bernabe did not say what he might do next.