New York’s Marijuana Legalization Rollout Has Seen ‘Growing Pains’ As Well As ‘Successful Efforts,’ New State Report Says

New York officials this week released a broad report on the implementation of the state’s marijuana legalization law, signed by then-Gov. Andrew Cuomo (D) in 2021.

The Office of Cannabis Management (OCM) report details what regulators describe as “the successful efforts to realize the intent” of the law: “to promote equity and expand opportunities for communities disproportionately impacted by cannabis prohibition, foster a thriving and growing cannabis market and the economic opportunities it brings, protect and promote public health and safety, enforce cannabis laws and regulations, and protect the environment.”

While New York has run into a number of obstacles during the first years of legalization—including a slow market rollout, leadership controversies and so-called “predatory deals” around the state’s marijuana social equity fund—officials behind the new report said they were confident New York is poised for success.

“This Implementation Report reflects our commitment to equity and transparency, and I’m proud of the progress we’ve made over the past three years to lay a strong foundation for New York’s cannabis market,” Tremaine Wright, chair of the state Cannabis Control Board, said in a statement. “Since day one our focus has always been on creating a fair and inclusive cannabis industry that repairs and restores the harms of the past while building opportunities for the future.”

The report says that 200 retail dispensaries are now licensed to operate in the state, with a total of more than 1,300 adult-use business licenses now granted.

New York State Office of Cannabis Management

Regulators also highlighted that more than half (54.7 percent) of adult-use licenses have been awarded to social and economic equity applicants, part of the legalization law’s goal of ensuring that people most harmed by prohibition have a chance to take ownership of the new industry.

Most cannabis consumers are also now shopping at legal stores, regulators said, noting that two thirds (67 percent) of New Yorkers who consumed cannabis during the past year “reported purchasing from legal retail stores.”

Legalization has also led to more than 200,000 cannabis-related criminal convictions having been sealed, with another 107,000 “suppressed while awaiting sealing.” And the report says more than 400,000 criminal convictions are also eligible for expungement under the legalization law, known as the Marihuana Regulation and Taxation Act.

Moreover, the report says, “No person in New York state remains incarcerated for solely a marihuana-related offense.”

As for consumer behavior, the document says that 14.9 percent of New Yorkers 18 and older reported consuming cannabis on a monthly basis as of 2022, while 7 percent said they consumed daily. Of consumers, just over half (52 percent) said they consumed solely non-medical reasons, while 13.5 percent said they were only medical marijuana users. More than a third (34.5 percent) said they used cannabis for both medical and non-medical reasons.

“As stewards of Cannabis Law and its promise, OCM takes its responsibility to New Yorkers seriously,” OCM Acting Director Felicia A.B. Reid said in a statement, adding that the agency “is focused on adaptation—building staffing across all divisions as the dynamic needs of New York’s legal cannabis market shift and change.”

But the regulator acknowledged that the market launch hasn’t been without its hiccups.

“Candidly, OCM knows there is much work to be done, and we remain undaunted by the task ahead,” she wrote. “OCM continues to refine its data collection methods, improve customer service and consumer education, prioritize public heath efforts, engage with stakeholders, and work diligently to shut down the illicit cannabis market. As public servants, OCM also understands that humility and openness to challenge is part of being a responsive, tuned-in, and relevant agency.”

Added Wright: “It’s no secret that we have had our share of growing pains. We acknowledge the opportunities to build upon what we’ve started and look forward to continuous improvement and adaptation to meet the rapidly evolving needs of our cannabis community and industry.”

New York State Office of Cannabis Management

A section of the report dealing with enforcement efforts against illicit cannabis operators says that enforcement “plays a critical role in making sure the rules apply to everybody.”

“The current enforcement efforts protect the integrity and investment of entrepreneurs in the legal market,” it says, “while holding accountable individuals selling illegal, untested, and unsafe products to communities across the state.”

Other priorities include environmental sustainability and climate change, the office said, noting that “OCM has promulgated regulations and developed supports for licensees to minimize the State cannabis industry’s adverse environmental impacts and ensure NYS’s cannabis regulatory framework is in alignment with NYS’s Climate Leadership and Community Protection Act.”

The report comes after New York Gov. Kathy Hochul (D) lauded what she called the state’s “smokin’ hot” marijuana market earlier this year, as the retailers in state passed the half-billion-dollar mark in legal sales since the market’s launch.

“Thanks to our efforts to shut down illicit storefronts and support our legal dispensaries,” she said. “New York’s legal cannabis industry is reaching an all-time high—surpassing $500 million in sales!”

While that’s certainly not a small amount of money, it also pales in comparison to other, smaller states with legal marijuana. Illinois, for example, sold roughly $2 billion in legal cannabis products during 2023 alone.

Hochul and New York regulators are attributing the growth, at least in part, to their efforts to stamp out illicit operators and expand the licensed marketplace. Hochul said in June that the state’s escalated enforcement actions against illicit marijuana shops is resulting in a significant increase in legal sales at licensed retailers.

The governor made the comments amid criticism from equity-focused activists over what they see as a “corporate takeover” of the cannabis market, citing reporting about the administration dismissing concerns from state officials about a “predatory” private equity loan deal the state approved to provide funding for startup cannabis retailers.

Certain advocates say Hochul has “falsely” blamed the legalization law itself for the state’s troubles with the illicit market, without taking responsibility for the administration’s role. To that end, there has been criticism of the governor’s ousting of Chris Alexander as executive director of OCM earlier this year.

In an attempt to rein in unlicensed sales, the governor in February called on big tech companies such as Google and Meta to “do the right thing” by taking steps to stop promoting illicit marijuana shops, which have proliferated across the state.

Meanwhile, New York officials are rolling out a broad plan to encourage environmental sustainability and set energy use standards within the state’s legal marijuana industry. It’s part of regulators’ broader goal of promoting economic, environmental and social sustainability in the emerging sector.

In June, state regulators also formally approved rules to allow adults 21 and older to grow their own cannabis plants for personal use.

A top New York lawmaker also introduced a bill in June to legalize psilocybin for adults, provided they obtain a permit after undergoing a health screening and educational course.

The state last month, meanwhile, announced it’s preparing to deploy up to $5 million in grants funded by marijuana tax revenue as part of an effort to reinvest in areas disproportionately impacted by the the war on drugs. OCM said the awards aim “to redress a wide range of community needs—from housing to childcare to job skills training and many areas in between.”

Under state law, 40 percent of all cannabis tax revenue is earmarked for community reinvestment, targeting “areas of the state that have been historically under-resourced, underserved, and over-policed,” OCM noted.

New Jersey Bill Would Let People Bar Themselves From Entering Marijuana Retailers

Photo courtesy of Philip Steffan.