Since 2023, Paul Steinbruckner has cashed in his stocks and 401(k) and spent his life savings on a cannabis cultivating business that doesn’t even exist.
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It started two years ago, when Steinbruckner started leasing a property in Lockport for the cultivation business. He had to, even before he received state approval, because state regulations required that he have a facility in place to even be considered for the license he needed to operate it.
For more than 1½ years, he’s waited for an approval that has never come.
And he’s not alone. Steinbruckner is part of what industry insiders call the December queue, a group of cannabis applicants whose license applications have been handled slowly and deliberately by the state regulators charged with reviewing them.
All the while, Steinbruckner keeps paying bills on a business he doesn’t know for sure that he ever will get permission to open.
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“They keep telling us to wait,” Steinbruckner said. “I’ve spent more than $100,000 on rent alone.”
It’s another glitch in the state’s ongoing rollout of a legal cannabis industry − a process that critics say has moved far too slowly and has been beset by what cannabis applicants have described as frustrating bureaucratic delays.
When New York first legalized cannabis for adult use in 2021, its biggest problem was that it had lots of farmers growing cannabis, but no stores with the state licenses needed to sell it.
Since then, the state granted licenses to more than 400 stores across New York. But it also has been careful not to let the supply side of cannabis and the retail side of cannabis get out of whack as more stores open.
The state also was stymied in some cases by lawsuits, preventing it from licensing retail or microbusiness licenses in the December queue. But when it comes to licensing cultivators, it is also approaching the pending applications slowly so the market doesn’t become oversaturated with too much cannabis − which would drive prices down and push some growers out of business.
“We’re walking slowly into the December queue based on the information that we have in terms of market analytics and looking at what’s happening,” said Felicia A.B. Reid, the Office of Cannabis Management’s acting director.
But as it tries to balance and regulate, it is testing the patience − and pocketbooks − of people like Steinbruckner.
“They say it’s because they’re in fear of market saturation, but there’s nowhere in the Marijuana Regulation and Taxation Act that states that. In fact, the MRTA states that they have sole discretion to limit or not to limit licenses, but it has to be done in a manner that avoids market dominance in the sector, and that considers the concerns of small businesses like myself,” Steinbruckner said.
Steinbruckner said he has had no official communication with the OCM about the subject, because a phone number he has for the OCM doesn’t seem to be monitored. Instead, he’s taken to speaking up during public comment periods at agency meetings and whenever he can grab board members before or after.
He has also reached out to several public officials for help. One of them is state Sen. Sean Ryan’s office, which told him in an email that the OCM has been “completely unresponsive to our requests.”
“The way OCM is structured internally is that they don’t provide third parties (like elected officials’ offices) with any info,” wrote Ryan’s chief of staff Cody Meyers. “When we make a status inquiry, OCM is supposed to contact the applicant and provide them with a status update. That last line of communication is not happening, which is beyond infuriating.”
Ryan’s office wrote a letter to Gov. Kathy Hochul’s office on Steinbruckner’s behalf.
“I’m very sorry for what you are going through and unfortunately we are dealing with OCM which has totally failed you. Hopefully we will see a resolution soon,” Meyers wrote.
Jay Chemelli, a hopeful microbusiness licensee, hasn’t heard from the OCM either, and has had no way to update his application to show that he has secured a property in West Seneca for his planned business.
That’s a problem, because it’s unclear what will happen to applicants who applied without having real estate secured, now that a court case has found that granting such so-called “provisional” licenses is unlawful.
Chemelli was not initially required to secure a location with his application, but he ended up finding a “dream” spot for his retail store and decided to lock it down.
But at the rate things are going, he believes it will be years before he sees a license.
“The regulators, I want them to understand the reality of their actions,” he said. “Them taking so long to roll out, and then rolling out the wrong way, has severely affected all of our lives. It’s not a game. It’s our whole lives invested in this thing.”
A 23-year legacy grower who wants to go legit, he feels betrayed by regulators who had promised people like him a path out of the black market.
“I’m not doing this for money. I’m doing this for freedom,” Chemelli said. “We’re just trying to do what we were told was right. We’re gonna go legal. We’re gonna pay taxes. But they’re making it so difficult, it’s making a lot of us say ‘What’s the point?’ because we keep hitting the wall.”
He believes the state is holding off on licensing small, craft producers like himself in favor of big national companies entering the market. Medical operators will pay a $15 million licensing fee.
“The legal market needs a lot more micro craft growers than they need some big multi-state operator that has 10,000 square feet and has no idea what they’re producing, just putting more garbage into the system,” he said. “You really need the craft people who’ve been doing this for a long time to supply a higher quality of cannabis into the market.”
The average consumer that uses licensed dispensaries is often not educated about quality, he said.
“They don’t necessarily know any better until they are presented with something and see the difference,” he said.
Now, $50,000 later, Chemelli is all but giving up and letting his dream location go.
“There’s no hope,” he said.
At an OCM Cannabis Control Board meeting held in Buffalo recently, Reid opened the meeting by addressing those languishing in the December queue.
“I very much know the blood, sweat and tears put forward in real hope of being in New York cannabis,” Reid said. “I don’t take any of your efforts lightly.”
She has said that she is sensitive about what applicants are going through.
“One of the things that I’m very aware of is cannabis is incredibly personal, for very, very, very many different reasons to folks. And I think a lot of folks see a lot of hope and opportunity in this industry,” she said. “But I think as regulators, we have to sort of take a moderated and evidence-based approach to how we look at the health of the market and the longevity of the market.”
Chemelli doesn’t buy it.
“You could license every single one of those applicants in the December queue and it wouldn’t even be enough to supply New York City,” he said.
“}]] The state’s ongoing rollout of a legal cannabis industry has been a process that critics say has moved far too slowly and has been beset by what cannabis applicants have described as frustrating bureaucratic delays. Read More
