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Head of New York’s Cannabis Regulator Ousted Amid Damning Report Into Troubled Adult-Use Rollout

The head of New York’s cannabis regulatory body, Chris Alexander, has been forced to resign immediately amid an ongoing overhaul of the troubled legalization project.

On Friday (May 10), a damning report into the rollout of New York’s legal adult-use cannabis industry was published, calling the Office of Cannabis Management’s  handling of the process into question.

It comes after the state Governor, Kathy Hochul, ordered the commissioner for the New York State Office of General Services, Jeanette Moy, to conduct an internal review of the entire organization in March, dubbing the situation a ‘disaster’.

In a press conference, Hochul stated that the review was not about assigning blame, but about ‘pointing the OCM in a new direction’.

However, she confirmed that Alexander, who was the architect of the legalization bill passed in 2021, will step down in September when his three-year term comes to an end.

The ‘top down’ report also highlighted key issues within the organisation, stating its culture had led to ‘confusion, difficulty and delay’ in its rollout, which has been plagued with lawsuits, the proliferation of illicit businesses, and the frustration of those trying to operate legally.

It also highlighted the inability of the understaffed licensing team to keep up with the more than 5600 applications that have been submitted, some 90% of which reportedly require corrections, laying bare the complexity and confusion surrounding the process.

This has led to a situation where just 122 licensed adult-use dispensaries have opened across the state, in comparison to an estimated 2900 illicit store.

Other findings of the report included:

  • OCM underspent its FY 2023-24 budget by $26 million despite claiming the need for more funding.
  • The agency prioritized developing a new mapping application over using an existing one, causing delays for applicants.
  • Lack of transparency: OCM did not provide sufficient information to applicants and the public about application processing.
  • Failure to fill vacant positions: OCM did not request the posting of 13 vacant licensing-related positions, resulting in staffing shortages.
  • Multiple licensing systems: At least six different licensing systems were developed by OCM since Q1 2022, potentially causing confusion and inefficiency.
  • Lack of reporting and oversight: OCM failed to provide required internal controls documents to task forces and the Division of the Budget.
  • Potential conflicts of interest: Concerns raised about individuals and units involved in crafting policy also being involved in processing applications, posing potential conflicts of interest.

The report has drawn criticism from some who’ve accused it of painting an unclear picture. Notably, it fails to address the state’s failure to deliver on low-interest loans and leased storefronts for 150 dispensaries.

As the fund failed to secure enough investment, the OCM was forced to pivot and issue more licenses than initially planned, driving numerous businesses to sue the organization.

 

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