Gov. Kathy Hochul’s cannabis agency ripped as office’s head is ousted over ‘confusion, difficulties, and delays’: damning report

This is some blunt criticism.

The top leader at the state’s Office of Cannabis Management is being ousted as a damning internal report from the Hochul administration has ripped the agency to shreds.

The report found that the office was staffed with inexperienced leadership, lacked a transparent process for licensing new dispensaries and had virtually no customer service for licensees.

“It has struggled to make the transition to a mature regulatory agency,” says the report, which was produced by Office of General Services Commissioner Jeanette Moy, and obtained by the Post before being released publicly Friday.

The report highlighted “implementation challenges” that “resulted in confusion, difficulties, and delays for well-intentioned line staff as well as applicants.”

In the wake of the damning study, Hochul confirmed Friday that OCM Director Chris Alexander will not be reappointed after his term is up in September, saying that he plans to “pursue other opportunities.”

Alexander’s exit comes after the licensing process for shops, processors and growers was continuously hampered by an onslaught of legal challenges and missteps, including a proliferation of gray-market shops flooding the state.

The office’s Chief Equity Officer Damian Fagon is also still on administrative leave pending an ongoing internal investigation that he retaliated against a Hudson Valley cannabis processor who was vocally critical of OCM.

Hochul acknowledged that the investigation is ongoing, but would not confirm any separate actions being taken to remove Fagon.

The new report blasted OCM’s leadership for not focusing on its core responsibility of issuing licenses for the budding legal cannabis market. And it said many officials in the organization had little knowledge of the market.

“The majority of OCM’s most senior leadership has relatively limited experience in leading regulatory entities, and the agency has experienced significant turnover in executive roles,” the report reads.

OCM lacks a suitable internal mechanism to track applications and even the agency’s staff are confused by the complicated hoops a potential licensee has to jump through — leading the office to have “little credibility.”

“This lack of transparency contributes to deep public mistrust, applicant frustration, and an inability to easily dispel concerns of potential impropriety, and confusion about the process,” the report reads.

Applicants are also don’t have clear ways to communicate with OCM. This differs from other states, such as New Jersey, where pot sellers are assigned a single person at the agency to handle their paperwork.

OCM currently goes out of its way to conceal staffers’ phone numbers, forcing applicants to direct all their inquiries through a hellish bureaucratic “black box” that’s monitored by entry level staffers who relay messages.

Despite the past mistakes laid out in the report, Hochul tried to put the focus on the future Friday.

“Today is not about pointing fingers, it’s about pointing [the Office of Cannabis Management] in the right direction,” Hochul said at a quickly arranged briefing in the mostly empty capitol.

Hochul has committed to what she deems an “overhaul” of OCM, including clearing licensing bottlenecks, implementing customer service in the application process, and beefing up staff within the agency’s regulatory arm.

Critics say Hochul is deflecting blame after not taking a more active hand in the agency until this point.

“I believe Chris [Alexander] is being made out into a fall guy, after Hochul tried to make Andrew Cuomo the fall guy, this after she tried to make the legislature the fall guy,” Aaron Ghitelman, OCM’s former deputy communications director opined to the Post.

“Sooner or later she’s going to have to run out of fall guys,” he added.

Alexander didn’t immediately respond to a request for comment.

Ghitelman– who also touted the successes of OCM, such as ramping up the number Black-owned dispensaries – was disappointed to see Hochul frame the sector’s rollout as a complete disaster.

“I don’t see this as being in service to the licensees and applicants who make up this market,” he said.

State Sen. Liz Krueger (D-Manhattan), who sponsored the legislation creating the new legal cannabis market in New York, told the Post “much of this could have been avoided.”

“I wish the governor had asked for the review a year ago, since I know that OCM leadership was begging for more staff and guidance and was ignored,” she added.