New York has decided to review all applicants who qualify for cannabis licenses.
Big changes are coming to the state’s legal cannabis market.
Gov. Kathy Hochul on Friday said she would replace Chris Alexander, the head of the state’s main cannabis agency, when his term expires at the end of August, after a sluggish rollout of a legal marketplace that has seen only 122 stores open statewide.
And the embattled agency took steps Friday to potentially allow it to issue thousands of general cannabis licenses.
In a major reversal, the Office of Cannabis Management decided not to cap the number of applications it will review from the November general licensing period, and will instead review everyone who qualifies.
Originally, the OCM had said it would review about 250, generating a much smaller pool of licenses.
“What that means is that there’s a very strong chance that they could be awarding a lot of dispensaries in this round,” said Aleece Burgio, an attorney at Colligan Law. “There were almost 2,200 dispensaries on the November queue and what that means is that, if you qualify, you’re gonna be getting a license. So there’s a potential for getting thousands of licenses up from this one queue list.”
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Shortly after, Hochul announced that Alexander would be leaving the cannabis agency.
“It’s fair to say that New York’s emerging cannabis industry has had plenty of challenges,” Hochul said Friday. “Some of them beyond our control, like litigation from out-of-state mega-corporations trying to undermine our goals that set us back for at least nine months. And actually some are related to challenges within my administration.”
Alexander is expected to stay on until his term ends Sept. 1.
“I’m not satisfied. I have even used the word ‘disaster’ to describe the status quo,” Hochul said.
A report issued Friday by the state Office of General Services found widespread problems with the legal cannabis rollout.
“There are deep-seated issues and OCM issues that have limited its ability to fulfill its licensing role, a complicated application process for prospective business owners,” Hochul said. “Our focus has been on the question, ‘Why haven’t more applications been reviewed, notified of their disposition and started?’”
A priority will be hiring and training key workers, and improving communication and customer service to applicants.
The slow pace of application approvals has been a hardship for thousands of applicants who have been paying rent on storefronts that they have not been able to get a license to open. More frustrating, applicants have said, is that applicants have not been able to get simple questions answered, and emails and phone calls go unreturned.
“Solutions, which we’ll see in the report, include a push towards centralizing and uplifting the operations work to unclog that licensing bottleneck, improving communications and enhancing transparency so that there’s an individual that you can talk to, which is a very basic request from government — knowing that you can ask a question and that you’re going to get a response,” Office of General Services Commissioner Jeanette Moy said.
The rollout of the state’s legal cannabis market has been notoriously troubled, stopped twice by lawsuits and competing with thousands of unlicensed cannabis shops which have proliferated throughout the state. More than three years after the plant has been legalized, there are just 122 dispensaries or cannabis delivery companies open in the state, a dozen of them in Buffalo.
The move to issue more licenses is something Joe Rossi, Cannabis Practice Group Leader for Park Strategies, a New York consultancy and lobbying firm, has been pushing for. He said the state’s bungled rollout has put New York’s cannabis market far behind the 8-ball.
Getting more legal shops open is the only way to push out the scores of unlicensed shops that have proliferated throughout the state and create a healthy market, he said.
“This is a massive way to make up for lost time,” Rossi said.
General license applicants weren’t required to pick a location in which they would like to do business, so it’s unclear how many of those licensees could end up opening businesses in Western New York.
Cannabis businesses that operate under a Conditional Adult Use Retail Dispensary license also are breathing a little easier as a result of Friday’s meeting. The board voted to give licensees a 12-month extension on their provisional licenses.
CAURD licensees are required to start operating within 12 months of the license being granted, but an injunction from a lawsuit challenging the rollout prevented many of them from getting up and running. The extension gives breathing room to CAURD licensees who ran into litigation delays.
When CAURD licensees applied, they were required to choose a geographic licensing area in which to do business. But Friday, the board voted not to restrict CAURD licensees to any geographical region, saying local laws have made geographic restrictions a burden for licensees trying to secure locations.
That means there is no capped number of dispensaries that could open in Western New York.
The OCM seems to be doing what it can to take as much burden off CAURD applicants as possible, Burgio said.
“It’s getting really difficult to find real estate and it’s getting difficult to find financing, and no longer does CAURD really have the leg up that it was intended to have in the beginning of this process,” she said. “I think the Office of Cannabis Management is doing what it can to help get these applicants and these licensees to final licensure, which has proven to be very hard right now.”
Also Friday, the board approved dozens of adult-use cultivator, distributor, microbusiness, processor and dispensary licenses. And for the first time, it issued a list of applicants that have been denied licenses.
“I think we’re seeing this because people who have been in limbo of the review process haven’t heard anything and they’re finally telling them no, you don’t qualify,” Burgio said.
Among the local licenses approved Friday were adult use retail dispensary licenses for Big Moe’s Automotive Repair and 3807 Harlem Cannabis in Erie County, as well as CEBEDE LLC in Cattauraugus County; and microbusiness licenses for Buffalo Cannabis Co., Canna-House Micro and Kingston Reserve in Erie County.
