With N.Y. cannabis rollouts paused, the future of the industry dims

New legal cannabis stores are in deep freeze again after Albany state Supreme Court Justice Kevin Bryant reversed a decision, issued just days earlier, to allow 23 shops to open despite his standing order preventing new licenses from going out and shops from opening their doors.

Bryant had issued this ruling in a case brought by veterans who argued that the state’s Cannabis Control Board had broken state law in making licenses available only to people who’d been previously criminalized by marijuana laws, rather than the whole slate of populations that the law said should get priority.

That was bad news for the dozens of businesses already in the pipeline, which is why the judge asked Office of Cannabis Management First Deputy Director Patrick McKeage for a list of the applicants that already “met all requirements for licensing” by the time of the court’s Aug. 7 order. McKeage obliged and the judge moved to allow these nearly two dozen stores to open, before the plaintiffs pointed out his filing didn’t actually state whether the listed recipients actually did meet all the requirements. A frustrated Bryant then re-froze the whole program.

This is just another of the ways big and small that OCM has failed again and again. Not that the plaintiffs or the judge are helping here — it’s ridiculous to remedy an issue of certain populations being excluded from the prioritization scheme by freezing the whole system so nobody can open a shop, giving additional ground to the thousands of illegal shops that are already eating everyone’s lunch — but this latest order is the predictable result of having fumbled even the basic question of who fulfilled all the licensing requirements as of the judge’s previous order.

That McKeage couldn’t manage a straightforward answer and instead frustrated the judge to the point of reversing course is on him, and another failure in the agency’s litany of missteps. In any case, we should step back from wrangling over the issuance of additional conditional licenses and ask two key questions: why, prior to the program being frozen, had only 18 shops statewide been opened with the licenses? And why, more than two years after recreational legalization was approved, do we still only have conditional licenses, implemented regulatorily as a stopgap more than a year ago, as the only option for opening up a lawful cannabis business?

Every passing bungled month not only saps the state of the revenues that this retail sector promised, but makes it harder for the regulated sector to prop itself up in competition with the onslaught of illegal businesses. The Biden administration might soon be providing an assist with the potential rescheduling of cannabis to a Schedule III drug as opposed to the much more tightly controlled Schedule I, but even if it happens, that still won’t resolve the tension between the state government’s endorsement of the industry and the federal government’s continued view of it as illegal.

What the state needs is a much nimbler partnership of OCM and the Dormitory Authority to issue licenses and help stores set up with financing, logistical support and a retail location. Now the whole thing is paused, and the prospect of a healthy sector grows dimmer every day.

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