NY Gov. Hochul vows reform, leadership shakeup at Office of Cannabis Management

NEW YORK — New York state’s much-maligned Office of Cannabis Management will get new leadership and streamline its torpid permitting process for retailers, Gov. Hochul said Friday, moving to address failures that have allowed a sprawling illegal marijuana market to emerge in the city.

Hochul described the state’s legal cannabis rollout as a “disaster” and said the Cannabis Management Office has been stuck in a “start-up mode.” But the governor promised the office would be transformed into a more efficient agency, a push that comes less than a month after Hochul and lawmakers approved a state budget that includes sweeping measures aimed at penalizing illicit cannabis retailers.

State officials are pursuing a two-pronged effort — padlocking more unlicensed shops and licensing more retailers — to sweep away the nettlesome illicit market that emerged after the state legalized recreational marijuana use in 2021. Today, New York City’s streetscape is speckled with unlicensed smoke shops selling cannabis in open disregard for the state’s licensing rules.

Mayor Adams’ office has estimated there are 2,900 illicit cannabis shops in New York City. Fifty-six legal retailers have opened citywide, according to the state’s Cannabis Management Office. There may be 50 unlicensed shops for every licensed seller.

Many of the illicit stores target children and attract crime, according to officials. At the same time, thousands of applicants for cannabis business permits are waiting to hear back from the state.

“There are deep-seated issues at OCM — issues that have limited its ability to fulfill its licensing role,” Hochul said in a speech in Albany, spotlighting the knotty application process. She said the growth of the illegal market is “absolutely unacceptable.”

Hochul vowed, “We are going to unclog the licensing bottleneck.”

She also said the state would produce a map to assist applicants in finding locations, and to allow New Yorkers to identify licensed stores.

Hochul’s speech came in tandem with the release of a report, commissioned by the governor in March, that examined roadblocks to the licensing process and deficiencies in the Cannabis Management Office.

The report described the Cannabis Management Office’s staff as “well-intentioned” but said the office often uses needlessly complex procedures, including a byzantine application system. The report further criticized the office’s staffing decisions, saying it has not sufficiently manned “the core of its regulatory operations.”

Redundant decision making by leadership in the short-staffed agency has produced “implementation challenges and resulted in confusion, difficulties, and delays,” said the report, led by Jeanette Moy, the commissioner of the state’s Office of General Services.

The analysis said 90% of the applications the office receives require corrections, underscoring the intricate nature of the submission process.

Chris Alexander, the leader of the Cannabis Management Office since its inception in 2021, will leave his post in September, Hochul said. A replacement has not been announced.

The governor said Alexander “graciously agreed to work with us for the remainder of his term to help implement those operational changes.”

Alexander did not immediately reply to requests for comment.

Aaron Ghitelman, a former spokesman for the office, suggested that the governor was unfairly scapegoating Alexander, and that she had not provided Alexander with “the support, resources and help” needed for the permitting process.

He described Alexander as thoughtful and caring, and said Hochul was deflecting blame and “playing political games.” The governor, he argued, was long disengaged with the work of the cannabis office.

“Gov. Hochul is a day late and a dime bag short,” Ghitelman said by phone. “I’m glad she cares about it now.”

In her remarks in Albany, Hochul commended the cannabis office’s “hard-working staff” and pushed back on criticism that she was trying to point fingers at others.

“It’s about pointing OCM in a new direction and implementing solutions that work for everyone,” she said, adding, “Together we’re taking much needed steps — long overdue — to make the cannabis program in New York successful.”