The New York adult-use cannabis program has faced challenges, including sparse enforcement and lack of transparency, leading to frustration among program participants. A conference hosted by NY Cannabis Insider sought to provide solutions to these issues. Here are some highlights from the conversations:

Unlicensed Enforcement

New York’s Office of Cannabis Management has been slow to shut down unlicensed operators, leading to frustration among program participants. Comparison was made with the quick shutdown of non-compliant liquor stores and bars. Lack of staff may be a cause of the slow enforcement. The group also raised concerns about legacy operators being lumped together with unlicensed stores, which they said are the number one threat to CAURD applicants. CAURD applicants also complained about the lengthy delays of acquiring licenses.

Suggested Solutions:

One suggested approach is for Governor Kathy Hochul to request assistance from California in better enforcing legal products before they are diverted from there. Another solution is to wait for the tax revenues to grow in the state so that a crackdown on unlicensed operators may be done.

DASNY

The Dormitory Authority State of New York (DASNY), which helps the CAURD applicants acquire real estate locations and fund buildouts, was criticized for lack of transparency. Concerns were raised about DASNY forcing loans without providing clear terms and offering high rental prices for their locations. There were also concerns about potential conflict of interest issues between DASNY and the OCM board.

Possible Solutions:

Stakeholders suggested resolving issues through better communication and transparency about the social justice fund. Also suggested was decoupling the OCM from DASNY, with McDaniel resigning from the OCM board. An audit of DASNY was also proposed to account for the $50 million designated for CAURD applicants.

Anticipated Timeline

May 31: Proposed rules and regulations will be available for public comment for 45 days. On July 15, the OCM will review received comments and decide whether any further amendments are needed. Adoption of the final rules is anticipated to occur in August-September, with the application period opening in October-November. The OCM plans to award the first general licenses at the beginning of 2024.

True Parties of Interest

Concerns were raised about the True Parties of Interest rule’s complexities. The revised rules had some discrepancies that are being attributed to typos, but vendors potentially being named TPIs was extensively discussed. The rule excluded landlords, lawyers, comp-based sales, and financial institutions, with passive investors owning less than 20% having no limit on the number of stores they can invest in.

With many persisting issues, NY’s adult-use cannabis program must address these concerns before the market can reach its potential.

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