State senators criticize New York’s cannabis sales rollout

Sen. James Skoufis of Orange County noted it had been 943 days since legal adult-use cannabis was signed into law and “not one single dispensary” had opened in his district.

“Most, if not almost all the stakeholders that I’ve interacted with, they have viewed the rollout over the 943 days as challenging, to put it kindly, if not unsuccessful or a failure,” he said. “And so I look forward to understanding why that is and what we can all do to work together to try and improve upon that perception, if not reality.”

Sen. Mario Mattera said the cannabis rollout has been like putting “the cart before the horse.”

“I feel so sorry for our farmers, because right now, they’re struggling because New York State said, ‘We got something wonderful for you.’ That, in other words, we’re going to be here for you. And you know what? They’re not. Right now the people that passed this law are not here for our farmers. That’s something that needs to be taken care of,” he said.

Chris Alexander, the executive director of the Office of Cannabis Management, acknowledged that the rollout has been slow, and that farmers are suffering as they wait for more stores to open.

“We still have a long way to go before we can claim that the supply chain is functioning as intended,” he said.

When Daniel Haughney, the state’s director of cannabis investigations and enforcement, was asked to estimate how many illegal cannabis stores were in the state, and he replied “more than a thousand,” the audience erupted in laughter.

Regarding the proliferation of stores selling pot illegally, Alexander said shutting them down is a priority. He noted the state had seized 10,000 pounds of illicit cannabis, valued at $50 million.

“But those numbers are only a small segment of the enforcement activity that our team has engaged in because they do not count the work that has been done educating and empowering local governments and law enforcement entities to act as a force multiplier in this effort,” he said.

“The issuing of penalties is incredibly necessary and important to being able to close down any shops,” he added later.

Sen. Liz Krueger, who sponsored the Marijuana Regulation and Taxation Act, said there are thousands of illegal dispensaries, sometimes two per block, in her district in New York City.

“Clearly, whatever we did isn’t working. What do we need to do?” she said.

Alexander said the recently implemented $20,000-per-day fine would be more effective than the initial bulk upfront fine, but said even that was just a cost of doing business for the more profitable shops. He acknowledged the process of inspecting businesses, getting restraining orders and padlocking businesses is a time-consuming effort that requires going through the attorney general.

Sen. Michelle Hinchey said farmers have been sitting on hundreds of millions of dollars in unsold cannabis, and noted that they haven’t been offered monetary help from the state. She said some farmers would go out of business before more stores opened.

“We’ve been begging for support to effectively very little response,” she said.

Alexander said the OCM has launched Cannabis Growers Showcases and is working to get more stores open.

“More stores in the future doesn’t necessarily help the 2022 crops that we’re dealing with now that every single day loses value,” Hinchey said. “And the showcases have been great but they are a drop in the bucket for what we need to help the farmers.”

She asked if there was a stream of revenue for a recovery fund for farmers. Alexander said there was but he declined to say how much money might be available.

Skoufis, of Cornwall, said the 16 shops that were fined before the state paused the hearing process was a “startlingly low number, given the fact that we all recognize there are thousands of these illegal shops around the state and the enforcement powers have been in place since June.”

After one senator recited a litany of shootings, fires and violence that happened in illicit shops in his New York City district, Haughney said the level of danger involved in shops speaks to how much preparation the OCM has to do to inspect a shop and keep officers safe.

Sen. Pamela Helming said she didn’t think opening general licensing to out-of-state monopolies was the answer to help distressed farmers get their products on shelves.

“Our farmers are losing their shirts off their backs,” she said.

Damian Fagon, the OCM’s chief equity officer, said he sympathizes with farmers, as a hemp farmer himself.

“This market is only going to grow and those farmers are the foundation of the supply chain,” he said.

Sen. Gustavo Rivera said concerns about out-of-state medical operators entering the market are legitimate and asked what the OCM is doing to make sure those operators don’t monopolize it.

Alexander said the OCM anticipated those concerns by giving marginalized groups priority licensing through the CAURD program and priority licensing within the general licensing period.

“I just want to be on the record that these are legitimate concerns with folks and you must respond to them,” Rivera said.

Senators said constituents have complained about poor communication from the OCM, and that some contact phone numbers are not manned and offer no way to leave a message or reach a person.

“They’re submitting information, but it’s kind of going into a black hole, and they’re not getting timely responses to them to operate their business,” said Sen. Jeremy Cooney. “So I would encourage us to kind of think about how we’re communicating both externally and internally.”