
Columnists don’t like to dwell on any subject twice because one column should be enough to cover any issue. But somehow the state’s handling of the licensing of cannabis products, continues to be a disaster and complaints from the governor haven’t sped up the process.
Let’s start with the initial rollout of the program. After years of disagreement over the legalization of cannabis in New York, the state Legislature agreed that New York should join some 20-plus states that allow the legal sale of weed. Starting any complex plan takes time and at the outset everyone interested in the business gave the state the benefit of the doubt.
Commissioners were appointed and a small staff was hired. It was expected that after about 18 months, an initial plan would be put in place. The first licenses were given to growers, because you can’t sell anything without it bearing fruit. This was followed by the granting of licenses for laboratories, which would certify that the product met state standards.
It was always understood that the first batch of licenses would go to people in communities that had been impacted by excessive sales and consumption of illegal drugs. The commission decided that all licenses to sell would go to individuals who had a prior pot conviction. The idea had merit, but the process was a massive headache. By law it was required that people with pot convictions would be eligible for some form of state assistance to launch their businesses.
A program was set up using Wall Street financiers and the state Dormitory Authority. Weeks turned into months and the moneys for startups never became available. Those people who had the funds were told where they would be required to start their business. This formula was supposed to guaranty that the retail locations would be spread around the state. It was a good idea but a license holder from Brooklyn didn’t want to be told that they would have to open a store in Buffalo.
While the program dragged on, thousands of unlicensed stores opened all over the state. By last count there were about 12,000 of such stores. The state had hoped to earn some major revenues from pot sales, but the illegal shops were not going to be the source of funds. The clock continued to tick and the only thing that happened was that multiple lawsuits were started against the commission, challenging their preference for licensees with pot convictions.
Up to the beginning of 2024, it was estimated that about 89 licenses had been issued, but many of the lucky license holders didn’t have the funds to open their doors. In addition, the few local governments that allowed cannabis sales, began passing laws making it even harder to find a location to set up a business. Here on Long Island there are only three towns that allow cannabis sales, which only permits a handful of stores to open.
While all of the licensing headaches were going on in Albany, a new problem emerged. Numerous licenses had been given to growers who began growing early in the process. Once their cannabis crop was ready for the market, there were only a few retail outlets that could buy the product. Many growers were forced to dump their cannabis at the lowest possible price. To date a number of the growers have gone bankrupt, unable to find customers.
In recent weeks, Gov. Kathy Hochul has expressed her total frustration with the commission’s slow pace and has demanded that they accelerate their issuance of licenses. Upset with the slow pace, she ordered a commission meeting canceled because of the few licenses being granted.
At this point there are multiple forces expressing their unhappiness with the commission’s conduct. The Legislature is upset, the governor is angry, the licensees are howling for lack of funds or the bureaucratic slowness of the state’s staff and at least one new lawsuit has been commenced.
Over the past 50-plus years, the state has created numerous agencies that issue a large variety of licenses. But no rollout has matched the cannabis fiasco, which has caused the state headaches that will last for many years to come.