New York's Stakeholders Share Hardships And Devastation As Office Of Cannabis Management Expands Market
For many in New York’s cannabis community, Tuesday, September 12th felt like an unforgivable blow to the social equity mission that the state has been chasing for the past three years. The most recent meeting of the Office of Cannabis Management’s (OCM) Cannabis Control Board (CCB) in Albany brought a number of resolutions to bear - including the confirmation that large multi-state operators can enter the adult-use market earlier than originally promised.
New York's Cannabis Control Board Meets In Albany: An Emotional Day For Community Members
The accounts heard in the Public Comment portion of the proceedings raised emotions high. From testimony about farmers facing suicidal crises, including one who wore a rope around her neck as a symbolic noose, to protests against the threat that corporate cannabis poses to small businesses, to retail licensees who have no idea if their stores will ever open, the deluge of truths unleashed in that room were powerful. So powerful that this reporter was moved to tears. Please keep reading further down this article to find several deeply resonant statements that were shared in the Albany meeting.
Watch excerpts from statements shared during the Public Comment section:
In stark contrast to the CCB’s previous public session in July, which had brought a sense of triumph in awarding 212 additional Conditional Adult Use Retail Dispensary (CAURD) licenses, there was little to celebrate at the Empire State Convention Center. Building staff continued adding chair after chair to the meeting room, which was packed with stakeholders and advocates from all aspects of the industry. Tension crackled in the air; for some, the anger was palpable, while others maintained a solemn but focused resolve.
Board Chair Tremaine Wright, usually a font of joy at these proceedings, was at her most austere. It’s a bad day when the meeting isn’t punctuated by her trademark laugh. A few seats to her left, OCM Executive Director Chris Alexander spent the session looking utterly defeated. When he spoke, his words seemed to carry the weight of the tremendous pressure of the past several weeks - lawsuits burdening the agency, a state Supreme Court judge’s injunction halting the CAURD program, and the room full of small business owners representing the thousands more like them who believed the OCM was destroying their livelihoods.
New York's Cannabis Control Board And Office Of Management Roll Out Final Adult-Use Regulations And Open License Access
Major resolutions for the day were quickly dispatched. The CCB approved the final adult-use regulations to be adopted by the OCM, the rules that will govern the legal cannabis industry. While public comments had been accepted for this version of the regulations from earlier this spring, many who studied the latest document (published by the OCM only a day before the September 12th meeting) lamented that almost none of the community’s most serious suggestions had been implemented. Note: New Yorkers can still submit written public comments on the proceedings from September 12th up until Friday, September 15th at 5PM by emailing info@cannabis.ny.gov.
Then the CCB passed the resolution approving applications for adult-use retail dispensary and microbusiness licenses, among other license categories, to open for all starting October 4, 2023. This means that anyone, not only the justice-involved entrepreneurs eligible for CAURD, can apply for a retail license. It sounds positive on its face, and it might be had the rollout for CAURD not been so slow, had the majority of CAURD licensees not be teetering on the brink of financial disaster, and had the launch of the general licenses not be viewed as a kind of mollifying response toward the ongoing lawsuit that aims to get the whole program labeled unconstitutional.
Executive Director Alexander stated that 50 percent of all licenses awarded will still go to social equity applicants (women, people of color, distressed farmers, and disabled military veterans), and that those who qualify as such will receive a 50 percent reduction in application fees. However, those fees are still markedly higher than the $2,000 application fee for the CAURD license.
Registered Organizations Will Enter New York's Adult-Use Cannabis Market
Next, the resolution that most troubled those in the room: Consideration of the expanded application allowing Registered Organizations (ROs) to enter the adult-use market. This means that New York’s medical cannabis companies, largely corporate multi-state operators (MSOs), can gain access to the adult-use sector and go into direct competition with small businesses by the end of 2023. These vertically-integrated giant brands are not only entering the space two years earlier than the OCM had promised community stakeholders, but they also have the privilege to do so at a much lower rate than planned: $10,000 to file an application and $200,000 to register. Originally, the idea was to charge corporate cannabis entities closer to $1M or more for adult-use.
Though OCM representatives tried to frame the ROs’ resolution as good news, emphasizing that companies would have to demonstrate commitments to DEI, sustainability, and community impact, the audience was having none of it. Current licensed small cultivators are allowed to grow canopies of cannabis flower at up to 43,560 square feet outdoors or up to 25,000 in a greenhouse, and most reach nowhere near that. ROs, conversely, typically have over 100,000 square feet of land to grow medical cannabis and under the new transitional license rules will be granted up to 100,000 square feet more. How can family farms operating at less than 25 percent capacity of the juggernauts be expected to survive against them? It’s no wonder that audible boos could be heard when the resolution was approved.
Dr. Jennifer Gilbert-Jenkins was one of the only CCB members to raise a question about the distribution of the ROs’ canopy footage; the reply vaguely indicated that the OCM would have more information in the future. Further ripples in the audience came when another resolution confirming changes of ownership for the medical cannabis brand Etain Health (acquired last year by RIV Capital, funded by a subsidiary of Scotts Miracle-Gro) was finalized.
At one point, Chair Wright commented, “I am concerned that we don’t have more of a streamlined process to address these issues with the Board… It’s not fair to the other market players.” Though seemingly a throwaway statement, given that no one responded, some took this as a hint that the CCB has not recently voted in harmony.
Watch more excerpts from the Public Comments:
Other takeaways from the resolution period made an impression:
- A Cannabis Research License Application was approved, making New York “the first state to take on cannabis research in an intentional way,” according to Alexander.
- Dope Diagnostics Lab was approved for a Cannabis Laboratory Testing Permit, becoming New York’s 16th cannabis laboratory
- OCM’s Director of Policy John Kagia reported that the adult-use market has continued to grow, with the newly-implemented Cannabis Growers Showcases alone taking in $82M in revenue. This was backed up by statements from Deputy Director for Strategy and Policy Ben Sheridan, who said that 70 cultivators and 19 processors have participated in the Showcase events to date.
- Chief Equity Officer Damian Fagon announced the Cannabis Hub and Incubator Program (CHIP), which will allow educational, technical and service-provider organizations to work with cannabis licensees and help them prepare for optimal operations, train workforces, and address other business issues.
New York's Office Of Cannabis Management's Chief Of Staff Axel Bernabe Resigns
News officially broke that OCM’s Chief of Staff Axel Bernabe, a pivotal figure in helping craft New York’s Marijuana Regulation and Tax Act (MRTA), would be resigning from his position. Alexander, another chief architect of the cannabis law and Bernabe’s close collaborator for eight years, bid his colleague a fond farewell: “What we’ve built here, the legacy that you live, will be protected. I know members of the team feel the same way I do. Members of the community who’ve lived and worked with you feel the same way. We know the passion comes through and it’s here in these regs, and this will really be your greatest legacy. So I want to thank you publicly so that everybody knows that this legislation could not have had a better steward.”
Bernabe took a few minutes to deliver a goodbye speech, saying, “This is the most rewarding project I’ve ever worked on.” He recalled his role as an advisor to Governor Andrew Cuomo, during which time he became the administration’s liaison for all things cannabis. “It’s been a radical change in the way we approach drug use in this state and this country, away from criminalization and toward public health and harm reduction… I will be grateful for having been a part of this.” But he acknowledged that the work was always a team effort: “I might have contributed in drafting the law, negotiating it through legislature, and starting to build the program in the Department of Health before we launched the OCM, but Chris… was always setting the direction. I feel so confident that this program is in the hands of all the right people and that can make sure that it delivers on the promises that we were asked to implement.”
The outgoing official thanked a number of people in government and advocacy that had been part of New York’s cannabis history. His list included Assembly Majority Leader Crystal Peoples-Stokes, State Senator Liz Krueger, Assemblymember Donna Lupardo, Drug Policy Alliance Executive Director Kassandra Frederique, Political and Communications Director Nikki Kateman of labor union Local 338 RWDSU/UFCW, Happy Munkey CEO Vladimir Bautista, veteran political operative and cannabis advocate Jesse Campoamor, Cannabis Association of New York (CANY) co-founder and industry pioneer Kaelan Castetter, OCM’s First Deputy Director Patrick Mckeage, OCM’s Deputy Director of Public Health and Campaigns Lyla Hunt, and many others.
As he wrapped up his thanks, Bernabe concluded with a nod to the OCM’s goals: “It’s an absolute top priority for us to destroy the illicit market. It’s an absolute top priority for us to open the CAURD program. It’s an absolute top priority to protect public health. It’s a priority to protect our farmers… A priority to roll out the regulations, which we did today thanks to the Board. And it’s a priority to build out the OCM. These are all our number one priorities. It’s just relentless and the work that the folks at the OCM do is just amazing. And so I think because of this maelstrom and this constant pressure that it’s important to take stock of moments, milestone moments, like today. [What] we’ve done today is put in place the nation’s most comprehensive set of regulations, if not the world’s most comprehensive set of regulations.”
Bernabe’s unwavering commitment to cannabis policy and reasoned, calming yet determined voice will be sorely missed at this pivotal time for the sector. We all wish him well. (Though one must note that of all the priorities, he led with enforcement. Is this an ominous clue about where the agency’s directives might be heading?)
But most affecting of the entire day were the statements from the Public Comment period, which drew cheers in some cases and shouts of solidarity. However turbulent these next waters are to navigate, however hopeless some of these stakeholders may feel at this moment, perhaps we can hold onto one thing: Our community is still in this together.
Watch footage of several stakeholders' statements during Public Comment:
Please read on for some of the stakeholders’ testimonies.
Jeanette Miller, Founder, Eclectic Farmstead and Cannabis Farmers Alliance
I wore a noose around my neck today. ‘Cause I feel like I’m going to hang myself and I don’t want to disrespect anybody… but if I’m going to hang myself, I’d rather take the rope off, pass it to you guys, you guys can pass it around, hand it to the Governor, and give her the rope that hung me… We relied on you and you relied on us. We totally did it. I have 500-plus pounds sitting and rotting right now… I had the police come to my home because I’m done… This ruined my life… I feel like I’m going to hang myself… We’re tired, we’re done, we’re struggling, we need help. You don’t answer… I call and I call and I call to do this… We’re failing!
Kavita Pawria-Sanchez, CEO of CannaBronx
This is a really tough moment. We all know that we’re at a dangerous crossroads on two fronts. And as we think about the regs as they came in today, we want to talk about two issues. One is the early entry of MSOs. We’ve been hearing it’s poisonous to social equity and reparations as it stands in the regulations right now. And two is the decimation of the CAURD program [through the use] of hostile tactics by multi-state operators. I’ll say more about those things, but as a headline we want to support the OCM, the CCB, the state, in doing the right thing here. We believe in you. As you guys can see from a letter that 300 of us signed onto that was sent to the CCB on Friday, we humbly ask the CCB to direct the OCM to issue amended regulations… We can’t have corporate greed through Big Weed take over… We think the state has the opportunity to do the right thing here and that you want to do the right thing in the face of tremendous pressures from capitalism.
Mike Casacci, Founder, House of Sacci
We were told that it would be three years before [ROs] came into this market, and in March when we were able to put in those comments, it was still three years. When you snuck in the new round of regulations, we were no longer able to make significant comments and that’s why this is completely BS! …My family has spent over a million dollars of our family money to build one of the best greenhouses and one of the best grows in New York, and I promise you this, I will not sell my flower to any one of those ROs’ facilities… And people will not buy from them, because they just approved Etain to be run by Scotts Miracle-Gro. They just approved on August 1st a 60,000 square foot facility, and I’m going to tell you right now, New Yorkers do not want the makers of RoundUp growing their weed!
Watch footage of several stakeholders' statements during Public Comments:
Matthew Robinson, Founder, Legacy Dispensers / Essential Flowers
This cannot stop. OCM, do not stop. You got my full support, and everybody at Essential Flowers’ full support, 100 percent. The MSOs that are doing what they’re doing, they’re doing it out of spite. They’re not trying to do anything to help. They’re just trying to fill their coffers and make more money, and take it to wherever they live, but they’re not going to do anything for New York. The little guys, the small dispensaries in New York, we have to keep going. The CAURD licensees that are affected by this injunction, keep going. Support the OCM. The OCM is here to back you up… Everybody here is a team… It’s very imperative that we stick together and we stand together.
Annette Fernandez, Founder, La Casa Lola
I know you’re trying your best, and I have so much respect for you, especially Chris Alexander as a Black regulator. This has always given me hope. Dr. [Cornel] West said, “You can’t lead the people if you don’t love the people.” I would say, “You can’t lead the plant unless you love the plant.” We love the plant and we love New York and we love ourselves, which is why we’re here. We should not be surprised that in New York, a state in the U.S. where no system on record to date has been equitable, special interest would infiltrate. Just like every other interest in America, cannabis has been co-opted by corporations. This would not be significant if we were playing on a level playing field. We are out-moneyed, out-lobbied, and out-litigated.
The multi-state operators have been here for seven years as medical providers. Staking their claim, they celebrated having first movers’ advantage. In seven years, the New York medical program – I’m a medical patient, by the way – has never had more than 150,000 patients. They have had their opportunity to show what they can do with promos and discounts even, something that will not be allowed in adult-use. They have failed their shareholders and I understand that they have some explaining to do. And that’s none of our business. As New York small business owners and entrepreneurs, it’s none of our business. The top 10 MSOs in New York – some of them are here already – owe a whopping $500M in taxes. This is actually an accounting strategy, but I don’t want to digress.
I’m a prisoner of hope, and a native New Yorker. I, like many others, am still traumatized by the socioeconomic disparities of Washington Heights, a place that I love so much because it’s where I’m from. Uptown forever! The Heights and so many other areas across the state are in desperate need of new economic opportunities and better services. Uptown, it’s our children who don’t have access to nearly enough enrichment. We deserve the best of opportunities, we deserve reparations, access to capital that is not predatory, and first movers’ advantage. Know that this New York cannabis business community won’t stop on our quest for healing and transformation.
Jeff Jones, Adult Use Conditional Cultivator (AUCC) Licensed Cannabis Farmer
We’re going to need to get creative. The red carpet has all but been rolled out for large corporate interest and the marketplace is now in grave danger of teetering uncontrollably out of balance. You have hard data in front of you now from California on what you can expect… These corporations are not our friends… They are bullies. They take out ads in the New York Times to attack the governor over problems they helped create!
Jeffrey Hoffman, Founding Principal, Jeffrey Hoffman & Associates PLLC
I came to the meeting in January and I told you of CAURD applicants that paid their application fee instead of paying their rent. I don’t know how we got here. I don’t know how we created regulations that are so susceptible to legal challenge. I know the General Counsel quit in June. Maybe he was unhappy with what you were proposing and was recommending to you not to do it, to do something different. The first retail application period needs to be open to everyone at the same time. What does that mean to you? Let’s ask everyone in the room what it meant to them.
We didn’t do that, right? So now we have a lawsuit preventing 460 people – well, 440-some-odd folks from opening. We have farmers that can’t sell their products anywhere. We have processors, folks that lost all their money… We’ve got to codify CAURD. I’ve been holding the sign up back here. Everybody’s been saying it. That’s the solution. The solution is not to wait for this lawsuit to have CAURD be found unconstitutional. I’m an attorney and I’m telling you that’s what’s going to happen here. Okay? That’s what’s going to happen. So codify CAURD. And we gotta do a better job creating our regulations. They can’t be so susceptible to legal challenge. Part 116, which is CAURD, was susceptible to the Dormant Commerce Clause situation; it’s susceptible to these lawsuits, you got three of ‘em, We can’t have regulations that are so susceptible to challenge. We’re never going to open this program, never.
Please work with these folks… I know this is difficult. If it was easy, everybody would be doing it. It’s hard work. But we can’t be doing it the way we’re doing it. You’re hurting people tremendously. The very people you were supposed to help. The CAURDs would have been better off if they’d opened illicit stores… These people are broke, and they’d be having all the money that all the thousands of stores have made in the process. So I beg you, please, answer the phones. Better regulations. Work with the Governor to codify CAURD. She’s gonna call a special session perhaps about the migrant crisis. There are solutions. Let’s do this.
Jillian Dragutsky, AUCC Licensee and Co-founder of NY CAURD Coalition Women’s Committee
Today I am terrified of the future of the market as a whole. I’m here to urge you to do two things that can save and foster the program that we built. We need you to urge the Governor to codify CAURD. Without codification, the CAURD program will continuously be attacked and threatened if it survives at all. There’s a real risk that CAURD, with all of us who followed the rules and regulations and guidance, will potentially be ruined, financially, emotionally and mentally. I’m going to mention financially again, because many of us gave up real opportunities to pursue and build a framework that has been halted by no fault of our own. The second thing I would urge you to do is reconsider a program that rewards the ROs for their aggressive tactics that have hurt so many small businesses here in New York. It’s not just the retailers that are being affected by these issues. It’s the cultivators, processors, and consumers. It’s the whole ecosystem that is being devastated.
Dasheeda Dawson, Founding Director, Cannabis NYC
I am a registered medical cannabis patient. I am also a child of the War on Drugs, a longtime New York cannabis advocate and educator, and now the Founding Director of Cannabis NYC, where over 200 CAURD licensees have been provisionally approved in our jurisdiction. Now, without a shadow of a doubt, I stand here to firmly say no to ROs… I want to also acknowledge that it took a hundred years to ruin the reputation of this plant and it is somewhat disconcerting to see how we believe that this should be done in a number of years.
As Axel said earlier, some of this have been on this journey for nearly a decade, and we are excited to see so many people that have come to the table. But recognize that we will need to double this amount every single meeting… And we welcome you, we do. But this law and what we’ve been trying to accomplish would never have been accomplished without the leadership that we have at the OCM. And so I do think it’s important just as a government official, someone who chose to sacrifice my own journey in this industry to add knowledge, how difficult it is to move over to government. Government has never supported Black and brown people or social equity.
Therefore, it is very possible that we will continue to make mistakes as we’re trying to go through this. I definitely want to make sure everyone’s voice is heard. And I agree that in this process, it does seem absent of the voice first. But that’s why we have the Public Comment period, that’s why we have to continue to show up in droves, and I also just want to caution this: Be careful listening to the opinions of those who haven’t achieved what we want to achieve.
A lot of people made comments about what will happen if we allow big companies to come into this industry. And… that’s probably going to happen regardless, so we absolutely need to have solutions. Some of the solutions will be regulatory. But as a person who is overseeing a jurisdiction with so many cannabis consumers, some of the solutions are what we buy and how we buy it. At this point, as a consumer, there are some places that I will not shop. And if we go on the record with what people are doing to block the progress here, we can’t reward them regardless of whether they make their way into the market. We need to let everyone know.
Part of the Lift Off Cannabis NYC Tour is really about education around exactly how we’ve come together… We’re not going to come together over every line of 300 pages of regulations. But the good news is, we did put in a statute – thank you, Chris, for that – and we can have the opportunity [to] bring in more people. As someone who’s been in this for almost a decade, we need this whole room filled wall to wall with the same comments, with the same cooperation… At the end of the day, we are still aligned with the mission and that’s why… we stand with CAURD. So I don’t think CAURD’s going away. I think we have to fight for what is right and protect [it].
Tess Interlicchia, Founder, Grateful Valley Farm
How can you celebrate the glorious diversities while we sit back and welcome a handful of out-of-state cannabros to destroy our economy before it’s even had a chance to take off? …I don’t want to complain anymore. I’m tired. I’m really frickin’ tired. Families are suffering. I’m close to losing my farm again.
I’m sitting on lots of beautiful organic cannabis that’s been deemed by several people the best homegrown of the day they’ve seen and tasted. But it’s rotting. We’ve lost millions of dollars. I’ve done everything right and I can’t even feed my children. I sold my tractor to save the farm in January. It’s now September. I have nothing left to sell. Oh, except for the hundreds of thousands of dollars’ worth of cannabis rotting, turning into CBN. That’s great.
So my last plea to those in power is to remember that September is Suicide Awareness Month. Which professions are at the highest risk for this? Service oriented professions. No surprise there, right? Doctors, veterans, farmers. I’ve had to call personally for a police wellness check for a cultivator and I believe CANY has had to do suicide prevention crisis intervention for another. This is no joke. We’re in trouble. Please do the right thing. Give the farmers a fighting chance to survive. To save this plant, to give New York something to be proud of. And to give you a chance to sleep at night knowing you didn’t let that CBN oxidize in my damn barn.
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For more information about New York State's cannabis industry, visit cannabis.ny.gov.
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Featured image: Tess Interlicchia, founder of Grateful Valley Farms, testifies to New York's Cannabis Control Board (C) Jaime Lubin / Honeysuckle Media, Inc. @jaimelubin