NY’s rollout of legal cannabis needs more speed, transparency, oversight (Editorial Board Opinion)

Reporters at NY Cannabis Insider, our sister publication, are putting on a clinic in accountability journalism as they scrutinize the slow, opaque and often chaotic rollout of New York state’s legal marijuana industry.

State government leaders convening in Albany this week need to exert some oversight and leadership to figure out what’s going wrong — and then fix it.

NY Cannabis Insider’s latest is a blockbuster story published Dec. 1 about the investment group New York state hired to raise $150 million in private money for the buildout of retail marijuana dispensaries across the state. The idea is to hand 150 turnkey locations over to the entrepreneurs who are first in line for conditional licenses to sell legal weed because they or their families were harmed by the state’s war on drugs.

The state hired Social Equity Impact Ventures, comprised of NBA Hall of Famer Chris Webber, his business partner, entrepreneur Lavetta Willis, and a team from the investment banking firm Siebert Williams Shank. The group appears to have missed a Sept. 1 deadline to raise the $150 million. With only $50 million in state money to draw on for leasing and outfitting dispensaries, the state Office of Cannabis Management changed the rules and will allow licensees to secure their own locations.

Reporters Brad Racino and Sean Teehan dug into previous business dealings of Webber and Willis. They found the pair often failed to deliver on their bold claims, including constructing a nine-acre cannabis “compound” in Detroit and investing in entrepreneurs of color with a $100 million fund. The investigation also found that Webber and Willis made several misleading or outright false statements about their accomplishments in the press, displayed evidence of financial mismanagement, and have a relationship with a big player in the cannabis industry that may pose a conflict of interest with their work for New York state.

Did the Dormitory Authority of the State of New York know any of this before hiring Impact Ventures? We can’t say. DASNY has yet to fulfill a Freedom of Information Law request for documents that would show how it chose the Webber group and what his team put down as their qualifications. Friday marked 100 days since NY Cannabis Insider requested the documents. (If you’re wondering what dormitories have to do with cannabis, DASNY is a catch-all agency for financing state projects.)

After several delays, the agency has promised to respond to the FOIL sometime this month. Enough of the stonewalling. We expect the Hochul administration to be more open and transparent than the one it replaced.

Racino also reported the Office of Cannabis Management missed a Jan. 1 deadline to produce a social and economic equity plan, which is meant to guide the rollout of the state’s emerging marijuana industry. OCM said it will deliver the plan before the end of the first quarter.

To be fair, the state’s cannabis program has been plagued by delays from the start. The legislature legalized marijuana in March 2021. Then-Gov. Andrew Cuomo — no fan of marijuana for medical or recreational purposes — dragged his feet on appointing the Cannabis Control Board, the group making policy, and a person to lead OCM, the new state agency implementing that policy. After Cuomo resigned under a cloud in August 2021, Gov. Kathy Hochul quickly made the necessary appointments. It took some time to stand up (and staff up) the agency and to formulate the rules.

This past October, Hochul told the editorial board the state would have 20 retail dispensaries open by the end of the year. That didn’t happen. The state’s first legal cannabis sale occurred Dec. 29, so the governor can say she met her deadline of opening the market in 2022.

Let’s give credit where it is due to OCM, which has “built the plane while flying it,” as Executive Director Chris Alexander said. According to the agency’s annual report, more than 400,000 criminal records related to marijuana convictions have been expunged; access to medical marijuana has been expanded by authorizing more providers to prescribe it; and 36 conditional retail licenses have been approved out of more than 900 applications.

Still, the state’s slow rollout has frustrated social justice advocates, entrepreneurs and growers waiting to cash in on legal weed.

Law enforcement also is frustrated. The decriminalization of marijuana is out of sync with consumers’ ability to buy it legally. A flourishing marijuana “gray market” filled the vacuum. In the absence of any guidance from OCM, Syracuse is cracking down on illegal pop-up retailers through stiff fines and code enforcement.

2023 is the year New York’s legal weed market will ramp up in earnest. Hochul and the state Legislature need to take stock of the cannabis program they created and listen to the people trying to find their place in it. The industry is ready to take off — if only the state would get out of its way.

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