Has New York Reached a Breaking Point?

Cannabis industry executives and aspirants once salivated at the possibility of selling marijuana in one of the most populous markets in the world, but New York has morphed into a total quagmire, with not a single stakeholder clear on what the path forward now is.

After a state judge completely froze the legal retail marijuana licensing system with a court injunction, many of those who have conditional adult use retail dispensary licenses are calling for New York state lawmakers to return to Albany for a special session in order to right the ship.

“Our beloved conditional adult use recreational dispensary program is on the verge of collapse, and we can’t let it happen,” wrote Jayson Tantalo co/founder and VP of Operations of the New York CAURD Coalition on LinkedIn. Tantalo then called on others to hammer Gov. Kathy Hochul’s office with demands to “codify the CAURD program and prevent its destruction.”

But Speaker of the Assembly Carl Heastie ruled that out in mid-August, saying at the time that he prefers to let the issue work itself out in the courts before the legislature intervenes.

“I think it’s always difficult when there’s a pending court case to ask the Legislature to fix something,” Heastie told North Country Public Radio. “When you don’t know what the resulting decision won’t be by the courts.”

Heastie added that the 2021 Marihuana Regulation and Taxation Act – which is at the heart of the lawsuit that stalled retail permitting – was “really to try to help those communities that were over-policed, over-incarcerated.”

“It wasn’t trying to exclude other people,” Heastie said.

But exclusion is exactly what many stakeholders – including the 11 “registered organizations” that are licensed to sell medical cannabis in New York – say is happening.

Four of the RO’s – Acreage Holdings, Curaleaf, Green Thumb Industries, and PharmaCann – sent their own missive to Hochul this week, complaining about the state Office of Cannabis Management and what they called “a demonstration of ‘worst’ practices rather than best.” The quartet argued the Empire State’s marijuana market is “in dire need of a new direction.”

“OCM has put New York’s cannabis program on a clear course for failure,” the four companies wrote, and begged the governor to order the OCM to allow them to “begin adult-use cultivation and dispensary operations without delay.”

Currently, the big medical marijuana companies have to wait until December to begin recreational retail operations, and it’s unclear when the OCM will be allowed to resume licensing.

The two intertwined lawsuits are both scheduled for a conference on Sept. 15 in Albany Supreme Court under Judge Kevin Bryant. That includes the March lawsuit filed by the Coalition for Access to Safe and Regulated Cannabis (CARSC), which is backed by the same four multistate operators that sent the letter to Hochul this week, and the August lawsuit filed by four service-disabled military veterans.

There may be some clarity offered three days before that, when the state Cannabis Control Board holds its next meeting, since regulators were ordered by Bryant to finalize adult-use regulations so that so-called “universal” licensing could begin in October.

But overall, the situation has left every stakeholder wondering what will happen next and how regulators may get ahold of the market, which is currently being run by thousands of unlicensed businesses, smoke shops, bodegas, and delivery services, with little in the way of enforcement to crack down on bad actors.