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Ouster of prime New York marijuana official raises questions


(This story has been up to date to appropriate Tremaine Wright’s former place to state meeting member.)

The exit of Chris Alexander, the highest state official overseeing New York’s rollout of adult-use marijuana gross sales, is seen by many as assigning blame for what has been decried because the nation’s worst hashish market launch so far.

Greater than three years after New York legalized grownup use, solely 122 shops have been open for enterprise statewide, and the market’s $123 million in 2023 gross sales was solely about one-quarter of projections.

However whether or not Alexander’s departure as govt director of the state Workplace of Hashish Administration (OCM) will imply a turnaround – or whether or not his alternative, to be assigned by Gov. Kathy Hochul upon completion of Alexander’s time period in September, might be any higher – is way from clear, trade observers informed MJBizDaily on Monday.

Although rumors of Alexander’s exit had been brewing for months, there are rumblings in state political and hashish circles that Hochul was fishing for a scapegoat – and will probably be a while earlier than New York’s adult-use market fulfills its important potential and bold social justice guarantees.

“My concern is that Chris might be made a fall man for the shortcomings of different departments,” New York-based lawyer David Holland, a accomplice at Prince Lobel and govt director of the state’s chapter of the Nationwide Group for the Reform of Marijuana Legal guidelines (NORML), informed MJBizDaily.

“I don’t suppose that with the completion of his time period and his departure that we’ll see the top of among the issues vexing this system.”

Grasp of ‘catastrophe’?

Hochul, who earlier this spring branded New York’s try to launch regulated hashish gross sales a “catastrophe,” requested Alexander on Friday to step down, The New York Occasions first reported.

The OCM didn’t reply to an MJBizDaily request for remark.

That was the identical day Hochul’s administration launched a blistering report criticizing the OCM’s efficiency on Alexander’s watch.

Hochul claimed throughout a information convention that the report – and Alexander’s de facto firing – was not about assigning blame.

However the report, compiled by the state Workplace of Basic Companies, faulted the OCM for, amongst different issues, a “advanced and obscure” licensing course of that, together with “sparse customer support,” usually saved marijuana enterprise license candidates at nighttime for months or longer.

Untapped potential

Confronted with such uncertainty, many would-be retail operators ditched industrial leases fairly than pay lease on storefronts for a yr or longer with out figuring out when – or if – they’d be capable of open a marijuana retailer.

The OCM additionally had an unspent finances surplus of $26 million and 65 unfilled workers positions, the report discovered.

Nonetheless, observers of New York politics famous that it’s unclear whether or not it the OCM or one other division was liable for failing to finish the hirings or spend the cash.

In a sequence of posts Friday on X, previously often known as Twitter, a former OCM staffer mentioned early warnings about bureaucratic issues went unheeded by the Workplace of Basic Companies (OGS), the identical company that compiled the report for the governor’s workplace.

And the OCM was solely considered one of a number of state businesses liable for rolling out regulated marijuana gross sales in New York.

These departments have been “conspicuously absent” from the Hochul-ordered OGS report, in keeping with Osbert Orduña, the CEO and founding father of The Hashish Place, a licensed retailer in Queens.

“Once we speak about what have been the issues with OCM, they’re within the pool making an attempt to remain afloat, however another person is making the waves,” he informed MJBizDaily.

Origin of a failure

New York legalized adult-use hashish in March 2021 below a invoice signed into regulation by then-Gov. Andrew Cuomo, who resigned amid scandal shortly thereafter.

Image of Chris Alexander
Chris Alexander (Photograph by Chris Roberts, MJBizDaily/Emerald)

Hochul, who stepped up from the lieutenant governor publish to interchange Cuomo, appointed Alexander because the OCM’s govt director in September 2021.

Alexander had a heavy hand in writing the Marijuana Regulation and Taxation Act handed by the Legislature.

And it was below his path that OCM launched the much-criticized Conditional Grownup-Use Retail Dispensary (CAURD) program.

The CAURD program assured that the primary marijuana shops to open could be owned and operated by candidates who might exhibit hurt attributable to the struggle on medicine.

That angered the state’s so-called “registered organizations,” most of that are well-known marijuana multistate operators that already held New York medical marijuana enterprise licenses.

Most MSOs are nonetheless not retailing leisure hashish merchandise, although state officers accepted a number of extra bigger operators’ functions to open storefronts Friday.

It was MSOs that filed considered one of a number of lawsuits difficult the OCM’s resolution to let different entrants into the market first.

The best way the CAURD program was structured additionally appeared to reveal the OCM to lawsuits.

One distinguished go well with difficult the constitutionality of CAURD’s authentic residency necessities paused licensing in a number of elements of the state fully.

One other main lawsuit, introduced by service-disabled army veterans who alleged the OCM’s choice for “impacted people” violated their rights, halted one other 400 CAURD candidates from continuing.

It might be greater than a yr earlier than the primary marijuana retailer opened in New York, on Dec. 29, 2022.

By that point, New York Metropolis, which has the potential to be one of many world’s largest regulated hashish markets, was rife with illicit marijuana sellers working with near-impunity.

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Third state hashish official exit

Alexander is no less than the third high-profile state official liable for New York’s marijuana launch to go away.

Reuben McDaniel, a former president of the Dormitory Authority of the State of New York (DASNY), stop his publish in June 2023. The DASNY was tasked with elevating a promised $150 million capital fund that will be made accessible to CAURD candidates,

Critics say the DASNY was liable for discovering areas the place CUARD candidates might open so-called “turnkey” shops however largely failed to take action.

A number of months after McDaniel’s departure, Axel Bernabe, the OCM’s chief of workers and coverage director and a former prime official within the Cuomo administration, additionally left authorities service.

Others, similar to former state Meeting Member Tremaine Wright, who chairs New York’s Hashish Management Board (CCB), stay of their positions.

Some gamers within the state’s marijuana trade questioned why the New York Legislature, the CCB or Hochul herself aren’t simply as liable for the dire scenario.

They level out that regulation enforcement and state marijuana officers claimed they have been powerless to do a lot concerning the unlicensed opponents – which could quantity as many as 2,800 in New York Metropolis alone, in keeping with a latest estimate – with out new enforcement powers that the state Legislature granted solely this spring.

Alexander being Hochul’s designated fall man “is the vibe I get,” The Hashish Place’s Orduña mentioned.

“Right here’s a man who was on the forefront of hashish reform in New York state for a really very long time,” Orduña continued.

“There could be no authorized hashish in New York if it weren’t for Chris Alexander.

“To throw the man out? It’s tousled.”

Chris Roberts might be reached at chris.roberts@mjbizdaily.com.



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