Gov. Kathy Hochul orders revamp of NY's legal pot program as complaints pile up

ALBANY — With complaints piling up, Gov. Kathy Hochul on Monday ordered a top-to-bottom review of the state Office of Cannabis Management, the oversight agency criticized for botching the state’s rollout of retail sales licenses and retaliating against businesses that speak out about delays.

Hochul herself has called the state’s rollout a “disaster” but has been seen as largely hands-off in the agency’s management.

The revamp would appear to put Hochul in a more hands-on position by tapping another agency commissioner, Jeannette Moy of the Office of General Services, to oversee the OCM revamp and implementing an OCM “dashboard” to allow the governor’s office to monitor licensing activity continuously.

“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. “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.”

Such “unprecedented” actions show Hochul stepping in to address problems but also potentially create more political responsibility, industry insiders told Newsday.

Some lawmakers agreed a wake-up call is needed.

 “There's been a lot of finger pointing and a lot of frustration, so an extra set of eyes on this wouldn't hurt,” Assemb. Donna Lupardo (D-Binghamton), chair of the Assembly Agriculture Committee and an advocate for farmers who sought to enter the cannabis business but who have been hurt financially by the rollout.

The glacial pace of license approvals has been a major issue.

OCM has received more than 7,000 applications and issued about 500 retail dispensary licenses. But just over 80 have opened — instead of the hundreds officials had planned on approving by now.

A lawsuit and injunction in 2023 blocked many licensees from opening for a period. That lawsuit was settled in November and state officials all but said they expected hundreds of more stores to open soon — but that hasn’t happened.

In a recent example, OCM was expecting to approve more licenses at its January meeting. When its agenda was published showing it would act on just three applications, Hochul’s office canceled the meeting.

“I'm very fed up with how long it has taken to get these approvals,” Hochul said in January. “My team got involved and says, ‘No, go back to the drawing board, work harder, get this done.’ And no, I'm not satisfied with the pace.”

The revamp was announced days after the New York Cannabis Insider publication reported the agency had retaliated against a marijuana processor after she complained about delays. The processor said OCM issued a recall for her products — a first for the state, according to the report — and her business temporarily shut down. A top OCM official has been placed on leave.

Another huge issue triggered by the slow rollout: Proliferation of thousands of illegal marijuana shops.

Efforts to slow the spread have been ineffective because fines are too low, court orders to close shops are slow to execute and no single agency has enough staff to enforce the license and tax laws.

Advocates are asking the State Legislature to pass a statute giving licensees the right to sue and shutter illegal shops, Newsday has reported.

By Yancey Roy

yancey.roy@newsday.com@yanceyroy