The State’s Cannabis Operation Needs A Complete Overhaul

Column from Assembly Minority Leader Will Barclay

New York’s attempt at legalizing cannabis has been a predictable failure. Our inefficient bureaucracy is troubling enough when it comes to basic policy items like infrastructure and taxation, so a complex policy like the commercial sale of cannabis was destined to be a nightmare for this administration.

For this reason, the Assembly Minority Conference has continued to ask for transparency, clarity and robust auditing of the burgeoning program. Last March, our membership wrote a letter to Governor Kathy Hochul and Comptroller Thomas DiNapoli expressing concerns with the rollout of the state’s program. Since then, little progress has been made to get state-sanctioned shops up and running and illegal pop-up shops closed down. This may be because the Office of Cannabis Management (OCM) only employs a dozen or so investigators to pursue illegal operators—a losing battle compared to the more than 1,500 illegal shops open in New York City.

As we also noted in our letter, New York is one of many states to permit the sale of cannabis. Yet instead of prioritizing applicants with the qualifications and experience required to succeed, the OCM prioritized applicants with drug offenses and criminal histories. Only in New York are criminal records more appealing than records of proven success. Too many strong applicants have been boxed out due to this system, and the cracks are beginning to show.

The Assembly’s One-House Budget proposal includes a Cannabis Rescue and Relief Fund of $80 million to offset cannabis-related expenses plaguing cultivators and processors facing financial hardship—products have expired and OCM is facing multiple lawsuits—but there is no guarantee that money will make it into the final spending plan. Estimates show that by the end of the fiscal year, New York will have experienced a net loss of over $203 million since the program’s inception. If this was a private business, the doors would have already been closed.

Unsurprisingly, a few days ago, Gov. Hochul announced a review  of the state’s program after acknowledging it has, so far, been a “disaster.” She’s right; 7,000 applications are in front of the state, yet only about 83 stores are open. Jeanette Moy, the commissioner of the Office of General Services (OGS), has been tasked with expediting the process and getting more shops open in the coming weeks. But is OGS really the right vehicle to tackle these challenges? Perhaps an independent, third party is better suited to identify and mitigate these problems.

Since the 2021 Marijuana Regulation and Taxation Act was passed, New York has been at a loss to get the legal cannabis market up and running properly. The delays in the application process and the overflow of illegal shops are just a fraction of the problems with the operation.

As I said from the beginning of the state’s cannabis effort, a gray market was inevitable, and whenever state government tries to establish regulatory oversight of an industry there are two guaranteed results: doing business here is going to become more onerous and less profitable. While we’ve seen neighboring states, like Massachusetts, create functional, profitable programs, New York’s has been mired in dysfunction. The economic impact of this mismanagement is growing in the wrong direction. It’s not too late to get this program back on track, and I hope the governor takes seriously how detrimental the initial implementation has been to New York.