Hochul team flunked NY’s legal marijuana rollout while letting black market thrive, cannabis advocates say

The Hochul administration’s slow rollout of New York’s legal cannabis trade was a real buzzkill — and the market is still far from recovered from it, an industry group says in a stinging “report card.”

The Coalition for Access to Regulated and Safe Cannabis gave the state Office of Cannabis Management the failing grades of three Fs, one D, a D+, and a C- in various categories.

It’s really four Fs, though.

The group sarcastically gave OCM an “A” for allowing a huge illicit market of unlicensed cannabis shops to flourish before licensed weed shops even opened, according to the report obtained by The Post.

“Despite its enormous potential, New York’s adult-use cannabis market right now is failing by almost every measure – on access, on equity, and on economic viability,” said CARSC rep Kirsten Foy.

“This is solely the fault of Governor Hochul’s Office of Cannabis Management (OCM), which has let the illicit market thrive while shutting the door on vetted Social Equity applicants – including minority and women business owners, veterans, and the registered organizations that have been serving the state’s medical cannabis patients for almost a decade,” Foy said.

The cannabis market has not recovered from Gov. Kathy Hochul’s administration’s rollout of the NY legal cannabis trade. Stefan Jeremiah

The OCM’s grades include:

“F” in “Administrative licensing”: Only 21 adult-use retail dispensaries have opened nearly two and half years since New York’s Marijuana Regulation and Taxation Act was approved by the state legislature and then-Gov. Andrew Cuomo, Hochul’s predecessor, in 2021.

There is a backlog of 463 cannabis-licensed operators that have yet to open.

Even if the state doubled its pace in helping to get them up and running, it would still take five years for all operators to open their weed dispensaries at this rate, the report card claims.

Chris Alexander, New York’s Office of Cannabis Management’s executive director, spoke as advocates urge New York state legislators to support the Marijuana Regulation and Taxation Act.
AP

“F” for Raising Revenue”: Halfway through 2023, the state is only on pace to generate $48 million in new tax revenue from cannabis sales this year. That means New York – with a population of 19.8 million – is barely set to eclipse Montana, which has 1.1 million residents and generated $42 million last year, the group said.

“F” for Constitutional Law: A judge has issued a temporary restraining order blocking the state from issuing any more cannabis licenses after disabled veterans accused regulators in a lawsuit of violating statutes. The vets say they were excluded from the first round of licenses in favor of applications submitted by those previously convicted of marijuana-related crimes when dealing was illegal.

Current medical marijuana companies also were excluded from the first round of licenses, which offer cannabis to all customers, not just patients.

In addition, the group claims regulators disregarded the law by staggering the sale of the newly licensed products to favor one group of applicants.

Some existing medical marijuana providers will be allowed to start opening their stores to all adults beginning Dec. 31, while others will be phased in through next year.

“A” for Illicit Market: This was a sarcastic cheeky grade for allowing the illicit cannabis market to flourish before the budding legal market got off the ground.

“With the NYC Sheriff’s office estimating over 2,000 illicit shops in NYC alone, there appears no stopping this booming market,” the report card said.  “Further, even though the State passed a new law in March that would fine these shops up to $10,000 per day, players in the industry are doubtful taxes could get collected from these mostly cash-only shops.”

Current medical marijuana companies were excluded from the first round of licenses, which offer cannabis to all customers, not just patients. Getty Images/iStockphoto

“D” for “Medicinal Cannabis”: Though New York was once home to one of the most successful medical cannabis programs in the country, revenue from its medicinal cannabis sales has plummeted 30% from a year ago.

Many patients are now going to unlicensed shops, advocates for medical cannabis shops said.

“D+” for “Sociality Equity”: OCM claims to value equity above all else, but reserving the first batch of licenses to “justice-involved” individuals with weed convictions is unfair, the report stated.

“The State is leaving out countless Black and Brown entrepreneurs without drug convictions and women seeking a foothold in this booming industry, making their program inherently inequitable,” the report card said.

“C-” for “Law Enforcement”: The report card calls the state’s crackdown on illicit cannabis operators belated, “meager and futile.

Advocates for medical cannabis shops said many patients are now going to unlicensed shops.
Getty Images/iStockphoto

“With thousands of illegal stores in the state selling UNTESTED, UNTAXED, and UNSAFE
cannabis – in many cases to minors – a true crackdown strategy, coordinated at every level of government, is needed to give the State a stronger grade,” it said.

The Office of Cannabis Management and Hochul’s office had no comment Sunday.

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