ALBANY – Key players in New York’s push to establish its marijuana market are encouraged that Gov. Kathy Hochul, who took office on Aug. 24, has said her nomination of cannabis regulators is a “priority.”
The appointment of those who will oversee the state’s fledgling retail cannabis industry is considered a critical first step in meeting the rollout timelines that had been established when the drug was legalized for adult-use at the end of March.
“I think she does see our vision here, and I don’t see any reason why she would delay any longer than she needs to,” said Assembly Majority Leader Crystal Peoples-Stokes, a strong proponent of adult-use legalization.
Peoples-Stokes said Hochul had taken the initiative to ask explicitly about the majority leader’s priorities for the rollout of the state’s cannabis industry, after the drug was legalized under a bill signed into law by ex-Gov. Andrew M. Cuomo.
The Assembly majority leader said she hopes the new governor’s posture on moving the industry forward will be different from her predecessor’s, adding that Hochul seems to have a “broader view of the economic potential.” She asked the incoming governor to move swiftly on nominating a chair of the Cannabis Control Board and the executive director of the Office of Cannabis Management, two positions which need to be confirmed by the Senate.
In the months after the Marijuana Regulation and Taxation Act (MRTA) was signed into law, some observers remained perplexed about why Cuomo was slow-walking the nomination of candidates for the cannabis oversight roles. That delay occurred as Cuomo was facing investigations on multiple fronts. A number of cannabis industry sources told the Times Union his administration had long ago circulated names of contenders for those positions, but never advanced nominees. Proponents of the retail market contend the delay in regulations and licensing guidelines is hampering the industry’s potential.
Members of NY Cannabis United, a coalition of over 30 partners ranging from a New York City community board to the state chapter of NORML, worry the delays have put the state behind schedule. The process to get legal cannabis grown and sold in New York was already projected to take at least a year and a half without the slowdown. In a July letter, the group wrote that the additional regulatory stalemate encouraged municipalities to opt out, delayed redress to the communities most harmed by the war on drugs and left the legacy market of illicit dealers going strong.
Imani Dawson, a coalition member and the owner of TCC Media, added that “the people with information (were) also the people with the privilege to hire lobbyists that have inside connections.” She said outsiders had no insight on potential nominees or on the progress of the legalization rollout. Dawson said NY Cannabis United is heartened by Hochul’s “commitment to the process,” but hopes that the new administration lives up to her day-one promise of transparency.
For would-be adult-use cannabis farmers, the state’s regulatory timeframe could make the difference in whether they produce crops next year. Allan Gandelman, a hemp farmer and president of the New York Cannabis Growers and Processors Association, said plants for outdoor grows need to be in the ground by May due to New York’s climate.
“Now we’re racing against the seasons, we’re racing against New Jersey, which has already released its regulations, and we’re racing against the federal government, which is trying to legalize cannabis and allow for interstate commerce,” Gandelman said.
With a growing anxiety in his own community over the lack of clarity on the industry’s direction, state Sen. Jeremy Cooney, D-Rochester, introduced legislation in July that would allow for provisional licenses for growers, in case new regulators don’t have time to establish processes before the spring.
“If Gov. Hochul wants to utilize the bill that I’ve written in terms of giving her flexibility … it’s there for her to use,” Cooney said. “If she wants to put forth a (nominee’s) name next week, even better.”
The senator said that under Cuomo, many conversations about potential nominees for the regulatory roles were happening at a high level, with Senate Majority Leader Andrea Stewart-Cousins’ office among others. But in the majority conference, senators had discussed how “there wasn’t a good faith effort by the Cuomo administration to put forth a candidate that would meet the expectations of our conference.”
Once Hochul puts forward her nominations for the cannabis positions, Stewart-Cousins will have to call a special session for the Senate to move forward with a confirmation vote.
“This new administration is a breath of fresh air on this issue,” said Mike Murphy, a spokesman for Stewart-Cousins. “She understands the importance of moving quickly on this.”
Will statements turn to action?
Hochul has made her commitment to a smooth nomination process public, with her office saying she wants to start the regulatory process “as soon as possible.” She also highlighted issues that have been central to the rhetoric of the legislators behind the MRTA: ensuring industry access for small businesses, communities disproportionately impacted by the war on drugs, and legacy operators who want to be above-board.
“The governor is committed to appointing individuals with diverse experiences and subject matter expertise who are representative of communities from across the state,” said Haley Viccaro, Hochul’s spokeswoman.
The pledge of urgency aligns with Hochul’s past involvement in New York’s cannabis industry. Previously, the state had legalized cannabis for limited medical purposes, as well as hemp – a cannabis plant with a low percentage of the psychoactive component THC that can be grown either for consumption or for fiber.
“FINALLY! Adult-use cannabis is legalized in New York,” Hochul said in a tweet on March 31, the day recreational legalization was signed into law. “Not only will this help correct an unjust system that targets marginalized communities, it will create jobs & invest in those who have been historically underserved.”
She was involved in promotion of the hemp industry years earlier, in her role as Cuomo’s former lieutenant governor. In 2018, Hochul tweeted a “flashback Friday” on “420,” a day of celebration for many cannabis users which falls each year on April 20. It featured a photo of her and Assemblywoman Donna Lupardo flanking a towering hemp plant during the state’s first ever Hemp Summit in 2017.
“I know that she’s supportive of this emerging industry,” Lupardo said. Though the new governor has a lot of pressing issues, Lupardo said she “would be surprised if we don’t see some action after Labor Day.”
“She and I have talked about this on many occasions. This matter will be in good hands,” Lupardo said.
Besides the adult-use cannabis hopefuls, existing businesses in the medical and hemp extract industries whose programs now fall under the still-to-be-formed Office of Cannabis Management are eager to see an accelerated implementation of the MRTA.
“There’s a provision in there to expand the medical program with some of the same kind of equity provisions around the licensing that are being applied to adult-use. I just hope we can actually see that momentum,” said Ngiste Abebe, president of the New York Medical Cannabis Industry Association.
“I think it’s good to have fresh eyes,” said Ryan Lepore, the interim executive director of New York City’s NORML, a cannabis advocacy group. “But the second that Cuomo was stepping down, a lot of groups that have lobbyists in place were already setting up meetings with her administration.” Lepore said that it’s unclear who may be seeking to influence Hochul’s decisions on the industry.
There is a lot of flexibility in the statute legalizing adult-use cannabis, including how many licenses will be given out and to whom. David Feldman, an attorney who focuses on clients in the cannabis business, said Hochul’s nominees could have a dramatic impact on how the industry rolls out.
“From what I understand, Gov. Hochul is very much in favor of this legislation, and sees the job creation and the tax revenue, and in particular is focused on the social equity benefits,” Feldman said. “Gov. Cuomo was a reluctant supporter.”
He pointed out that as recently as 2017, Cuomo was opposing the push to legalize marijuana, calling it a “gateway drug.” That’s the same year that Hochul spoke at the first-ever Hemp summit and was photographed with Lupardo — a photo that Hochul later promoted in support of the industry.
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