Gov. Kathy Hochul is ordering a full audit of the state’s Office of Cannabis Management after saying recently she’s “fed up” with the pace of the legal market’s rollout. Unlicensed dispensaries in New York City continue to far outnumber legal shops.
The probe aims to identify areas for improvement in the licensing process, with the ultimate goal of speeding up the time it takes to get from submitting an application to getting a legal cannabis business up and running, according to Hochul’s office. New York has given out about 500 dispensary licenses since November 2022, but only 83 of those businesses have opened retail storefronts or delivery hubs so far, according to state tallies.
New legal dispensaries have been getting up and running at a faster clip since New York settled a lawsuit in November that had prevented new storefronts from opening for several months. But throughout the licensing effort, applicants have said that the state’s bureaucratic red tape also contributes to delays.
Jeanette Moy, commissioner of the state’s Office of General Services, has been tapped to lead the audit and will be embedded within the Office of Cannabis Management for 30 days.
“There are certainly many, many steps from the time that you submit that application until the time that you’re able to open that business,” Moy said. “And so with the team [at the Office of Cannabis Management], we’re going to start mapping out those areas. We’re going to try to figure out, where are those impediments?”
Hochul oversees the Office of Cannabis Management and appointed the first members of the state’s Cannabis Control Board. But she has recently started to place blame on the agency for the legal market’s shortcomings. Hochul said in January the agency wasn’t moving fast enough to process license applications.
“I’m very fed up with how long it is taking to get these approvals,” Hochul said at an event in Buffalo.
This past fall, the state opened up cannabis business applications to the general public for the first time. Before that, dispensary licenses were reserved for people with past marijuana convictions and their family members, who had to apply through the state’s Conditional Adult Use Retail Dispensary, or CAURD, program.
The Office of Cannabis Management has 32 people to process the nearly 7,000 applications for cannabis business licenses that were submitted last year, according to the New York Times. The agency said in December it expected to issue nearly 1,500 new licenses in the coming weeks, although the exact timeline was unclear. It has so far announced 109 new licenses, including 38 for dispensaries.
But the pace of licensing is not the only problem. Many of the more than 400 businesses that have been licensed through the CAURD program since November 2022 still are not up and running.
That includes a delivery service called Rush Buddies. Christopher Kim is the company’s vice president of business and legal compliance. He said the company consulted with the Office of Cannabis Management about a location before signing a lease for a warehouse in Harlem, but was later told it was too close to a school.
“We’ve been trying to get this resolved with them since the first week of February and we are just getting the runaround,” Kim said. “People aren’t responding.”
He added that he doesn’t have any animosity toward the Office of Cannabis Management, but is concerned about losing money as the opening is delayed.
Other retail license holders have also said they’ve had difficulty ensuring their locations are compliant.
Some of the criticisms of the rollout have been leveled at the state Dormitory Authority, which was supposed to secure real estate for CAURD licensees. Only 10 of the shops open so far have received real estate and financial assistance from the state, the New York Times reported.
Moy said her audit would not extend to the Dormitory Authority.
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