New York Governor Begins Review of Weed Legalization Rollout

New York Governor Kathy Hochul announced on Monday that her administration will conduct an assessment of the state’s rollout of legal recreational marijuana, saying that the review is needed to ensure the success of the regulated cannabis market. 

New York lawmakers passed legislation legalizing recreational pot nearly three years ago, but the rollout of regulated sales has been plagued by lawsuits and other delays. More than a year after the first licensed recreational pot shop opened in December 2022, only 70 retailers selling adult-use cannabis have been licensed statewide. The figure includes Conditional Adult-Use Retail Dispensary (CAURD) storefronts and CAURD delivery-only services, licenses that were reserved for applicants with past cannabis convictions, as well as previously existing medical marijuana dispensaries that have been co-licensed to sell recreational weed.

In the meantime, the shortage of licensed retailers coupled with the end of criminal penalties for cannabis possession has led to an explosion of unlicensed pot shops, particularly in New York City. An estimated 36,000 unlicensed retailers have opened statewide, according to a recent report, including approximately 1,500 in the Big Apple alone. Critics of New York’s regulated cannabis rollout say the situation threatens the viability of the legal industry.

Earlier this year, the Democratic governor characterized the rollout of legal cannabis as a “disaster,” saying that it was unlikely that the program could be improved without significant changes to the Marihuana Regulation and Taxation Act (MRTA), the 2021 law that legalized recreational marijuana in New York. Hochul made the comments as she responded to questions about the rollout from the editorial board of the Buffalo News, noting that some areas of New York City have multiple unlicensed weed shops on the same block.

“It’s not every street corner,” Hochul said in January. “It is every other storefront. It is insane.”

Governor Announces Review

On Monday, Hochul said that her administration would complete an assessment of the rollout to identify opportunities to improve the program and ensure its success. The review will be led by Commissioner for the Office of General Services Jeanette Moy, who along with a team of state government leaders will embed with the New York Office of Cannabis Management (OCM) for at least 30 days.

“Today, we take the first step in revamping New York’s legal cannabis industry to ensure its long-term success,” Hochul said in a statement on Monday. “I have full confidence in Commissioner Moy’s ability to identify areas that need improvement, establish standards and processes across agencies, and jumpstart the next phase of New York’s legal cannabis market.”

Lauren Rudick, an attorney who has helped clients submit more than 100 applications for cannabis business licenses, said she appreciates Hochul’s announced review. She added that she hopes the assessment will foster a more transparent process for submitting applications and addressing problems that might come up as applications are reviewed.

“We want to have a system that is repeatable and predictable, so that when someone comes to us for licensing, we can give them a sense as to what they can expect,” Rudick told the New York Times. “But as of right now, it’s ‘be flexible and pivot or die,’ because we just never know what the state is going to throw at us.”

The assessment of New York’s cannabis rollout will include a complete review of the organizational structure, systems and process at the OCM. The review will focus on improving the time it takes to process an application and reducing the application-to-opening timeframe for new cannabis businesses.

Moy’s team has also been tasked with developing key performance metrics and an executive-level licensing dashboard to give policymakers a comprehensive view of the state’s licensing activity. The review will also include efforts to identify and implement policy changes that will streamline the application and licensing process and the development of three-month and six-month plans to continue improving the performance of cannabis regulators.

Cannabis Industry Welcomes Review

Hochul’s review of New York’s rollout of regulated recreational weed is also being welcomed by business operators who have already gone through the licensing process. New Yorker Christopher Louie moved to Colorado to start the brand Made in Xiaolin in 2018. He recently returned to the Empire State to launch the brand there, but says the “rollout of regulated cannabis in New York was a bit fumbled.”

“It is clear that regulators tried to be quick with the rollout, and it has posed some interesting challenges,” Louie wrote in an email to High Times. “For example, the wholesale market is not favorable for our brand right now, and we’re being forced to lower margins on both sides. Additionally, the way the illicit market and the legal market are currently coexisting is eerily reminiscent of the California market – which is not something anyone wants to duplicate. We are hopeful for the future, though, and continue to see small strides toward a more successful legal market that we are proud to be a part of.”

Sasha Nutgent, director of retail at Housing Works Cannabis Co, the first licensed recreational cannabis dispensary to open in the state, said that the review is “absolutely necessary.”

“The rollout of licenses has been extremely slow and is negatively impacting the livelihoods of hundreds of applicants across the State,” Nutgent wrote in an email. “There have been numerous missed opportunities in the legal adult-use cannabis industry, and hopefully Hochul’s move will help to rectify them.”