May 10, 2024
Albany, NY

Video, Audio, Photos & Rush Transcript: Governor Hochul Directs Operational Overhaul of the Office of Cannabis Management

Video, Audio, Photos & Rush Transcript: Governor Hochul Directs Operational Overhaul of the Office of Cannabis Management

Governor Hochul: “Now I've been frank with New Yorkers that I'm not satisfied. I even used the word disaster to describe the status quo. Today, I'm here to announce an overhaul of the Office of Cannabis Management based on a review that was recently completed.”

Hochul: “We're taking the illegal cannabis shops that destabilize our neighborhoods, taking them on with the plan that padlocks doors, allows localities to pass laws of their own, and goes after the landlords who knowingly rent to illegal shops. I fought for the authority in my Budget to be able to do all this, because we know the fewer illicit shops, the more room there is for license stores, which are overwhelmingly minority- and women-owned. We want them to flourish and to grow.”

Earlier today, Governor Kathy Hochul directed an operational overhaul of the Office of Cannabis Management. The overhaul follows the release of a 30-day assessment conducted by a team of individuals under the leadership of the Commissioner of the Office of General Services Jeanette Moy, that identified significant structural limitations to the Office of Cannabis Management that have affected the agency’s ability to fulfill its mandate to efficiently establish New York State’s cannabis marketplace. The assessment makes comprehensive recommendations to end the bottleneck of license applicants and improve communication with applicants and licensees – transforming the Office’s capacity to expand safe, legal cannabis operations across the state. Based on the assessment’s findings, Governor Hochul announced a series of immediate actions to reform the licensing processes and increase enforcement against illegal storefronts. The Governor also announced the establishment of a $5 million grant program to help CAURD licensees and previewed next week’s launch of the Cannabis Enforcement Task Force.

VIDEO of the event is available on YouTube here and in TV quality (h.264, mp4) format here.

AUDIO of the Governor's remarks is available here.

PHOTOS of the event will be available on the Governor's Flickr page.

A rush transcript of the Governor's remarks is available below:

Good morning. When New York State passed the Marijuana Regulation and Taxation Act, we were committed to setting up the nation's fairest, most equitable cannabis industry. Those were not just words. We wanted to make sure that those who had been targeted by the failed drug wars of the past were by racially biased enforcement had opportunities to benefit from legalization. It was an approach that no other state has attempted, and I still continue to believe that these goals are worthy and just. But it's fair to say that New York's emerging cannabis industry has had plenty of challenges before it. Some of them, beyond our control, like litigation from out of state mega corporations trying to undermine our goals – that set us back for at least nine months. And actually some are related to challenges within my administration.

Now I've been frank with New Yorkers that I'm not satisfied. I even used the word disaster to describe the status quo. Today, I'm here to announce an overhaul of the Office of Cannabis Management based on a review that was recently completed. I'm proud today to be joined by Commissioner Moy of the Office of General Services, and First Deputy Superintendent Chris West, who will lead our Cannabis Task Force within the New York State Police.

Let me be clear – there are deep seated issues at OCM, issues that have limited its ability to fulfill its licensing role – a complicated application process for prospective business owners. And unfortunately, this has overshadowed the excellent work done by hard working OCM staff. And I do want to commend the rank and file public servants who have put in countless hours, evenings, weekends, all committed to standing up this groundbreaking equitable approach. Now the report they're releasing today to the press and the public will be used as a guide to make much needed reforms at the Office of Cannabis Management.

My team has shared these findings with Executive Director Chris Alexander, who is a key player in drafting the original legislation and served as OCM's first ever Executive Director. We're grateful for the work he has done to stand up this new agency and this new market. He agrees there is a time for a new direction at OCM and has graciously agreed to work with us for the remainder of his term to help implement those operational changes and he told us he intends to pursue other opportunities at the conclusion of that term, which is in September.

In a few moments, I will outline some of the operational changes we intend to implement going forward. But first, I want to explain who we're fighting for. In the new report, you'll see testimonies from individuals who've been directly harmed by the operational problems that we've identified like one applicant for a retail dispensary in Central New York, a Latino service disabled veteran who's been paying more than $5,000 a month since November and has invested over $40,000 overall. This individual states that they've not received any communication from OCM since they submitted their application six months ago. And since then, they've watched other cannabis stores open, indeed an illegal one, just 1,000 feet from their operation. This is not only discouraging for them – it's absolutely unacceptable for me. So, to that applicant, and the many others who've been let down, I want you to know we are starting to fix this right now. Because these are the people the law was intended to benefit. And they are the New Yorkers we're fighting for. The actions we're taking today fall into three buckets.

First, we're going to unclog the licensing bottleneck and immediately review hundreds of applicants who've simply been waiting for an answer. Applicants who are required to apply with a lease, a paid for lease, are still paying rent, hoping their license comes through. We're going to streamline the application process, assign each application one point person and shepherd through the process, communicate with the applicant and ensure that applying is as open and transparent and painless as possible.

Second, we'll improve the communications with the entrepreneurs trying to gain access to this budding industry, many of whom are justice involved individuals or veterans or MWBEs. Soon, OCM will launch a OCM cannabis map to help applicants find locations for their stores and allow the public and the State to verify that a store is legal. We're going to produce regulatory bulletins to inform the public of policy changes and hold statewide listening sessions to understand even more ways to improve.

Finally, we're going to transform OCM itself. It's past time for OCM to move from a startup mode into a fully operational regulatory agency – one with stronger internal controls and a reconceived organizational structure. We're going to prioritize hiring and training new staff capable of strengthening key agency operations, fill senior roles focused on agency operations, customer service, internal controls. And as the market grows, so will the need for compliance and enforcement. So, we plan to grow those teams as well. Now those measures will significantly enhance OCM's ability to serve New Yorkers. And they're building on actions that we've already taken.

We're taking the illegal cannabis shops that destabilize our neighborhoods, taking them on with the plan that padlocks doors, allows localities to pass laws of their own, and goes after the landlords who knowingly rent to illegal shops. I fought for the authority in my Budget to be able to do all this, because we know the fewer illicit shops, the more room there is for license stores, which are overwhelmingly minority- and women-owned. We want them to flourish and to grow.

We're also launching a task force to go after illegal suppliers. And I'm proud to announce that the State Police will take a leading coordinating role with this operation beginning on Monday. This task force will deploy teams of investigators and analysts all across the State. We'll work closely with OCM enforcement with the aim of closing as many illicit stores as possible over the next 90 days.

We're not just cracking down on the bad actors, we're working to support the good ones as well. Just last month, the Cannabis Control Board approved a further 101 adult use licenses, bringing the total number of approved licenses in 2024 to over 400. And today, we've made even more progress, having approved over 122 more licenses bringing the total for this year to 541.

Let me say this: today is not about pointing fingers. It's about pointing OCM in a new direction and implementing solutions that work for everyone – from New Yorkers eager to open their own legal shops, to growers who've waited too long for a market for their harvest, to the New Yorkers who are sick and tired of the unlicensed retailers who've taken over their neighborhoods.

I'm grateful to Commissioner Moy and her dedicated team who will continue to be a trusted advisor to me as we implement the report's recommendations. And to my team in the Executive Chamber, they will take a larger role in this process in the interim. So together, we're taking much-needed steps, long overdue, to make the cannabis program in New York successful and work as promised. We promise to deliver prosperity and opportunity, and we know it can do equitably, officiously and effectively.

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