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Two years in, New York's legal cannabis industry faces delays and complaints

Nebula Haze

New York’s legal cannabis rollout is having a rocky start and has been plagued by numerous problems, including too many farmers licensed to grow marijuana, and too few stores open to sell their products

The adult use of recreational cannabis was legalized over two years ago, and since then the industry in the state has progressed slowly. Just a handful of retail stores have opened to sell marijuana to date.

As a result, around 200 farmers granted growing licenses in 2022 have been left stranded. They have crops that have been harvested but have few places to sell them.

Jeff Jones, who has a state license to grow cannabis in the Finger Lakes region, is one of several farmers who expressed displeasure at a recent meeting of the state’s Cannabis Control Board.

“I am profoundly disappointed in the current direction and deeds of the state of New York and the many entities represented in this room,” Jones told the board members. “Collectively, these agencies are not moving fast enough to create a viable marketplace for small businesses.”

Jeanette Miller, who runs the Eclectic Farmstead in Niagara County, is a founding member of the Cannabis Farmers Alliance, an advocacy group of 25 state-licensed cannabis growers. The group formed in response to what they say are confusing and contradictory state regulations, and what growers believe is a lack of support from the state Office of Cannabis Management.

Miller, who says she is an experienced hemp farmer and holds a master’s degree, says she and the other state-licensed growers are running small businesses that can’t survive for long without the opportunity to sell their crops.

“The only legal cannabis was grown by us. And we need to find out how to work with it to get it out to the consumers, and then move forward so we can have the next batch going into the stores when they're ready,” Miller said. “Because we have the legal cannabis. Everything else is illicit or medical.”

The growers also worry that they will soon have to compete with cannabis grown by the state’s medical marijuana industry, which are better funded and possess large indoor growing facilities. The Cannabis Control Board is creating regulations for the sale of those products but has not yet granted approval.

Assembly Majority Leader Crystal Peoples-Stokes, who sponsored the original bill legalizing cannabis, was also at the meeting. She asked for tolerance, saying no other state has tried to set up a social equity program like New York’s.

“We decided to take a method that was going to invest in the people who've had the most impact on the war on drugs. That's a challenge,” Peoples-Stokes said. Now I'm just going to ask people to be patient.”

The state has provisionally approved over 150 retail licenses, but only around 16 have so far actually opened dispensary stores.

New York gave preference to applicants who were convicted of a marijuana-related charge during cannabis prohibition. They are also required to have successfully operated a business for at least two years.

But the licensees have complained that the program, administered through the state’s Dormitory Authority, has been slow to come through with the turn-key ready locations that were initially promised.

The store locations were to be financed by a Social Equity Fund run through the Dormitory Authority, but a firm contracted over a year ago to raise $150 million for the fund failed to follow through.

A key figure involved in overseeing the equity fund, Rueben McDaniel III, resigned from the Cannabis Control Board in mid-June.

“As of the end of today's meeting, I am resigning from the Cannabis Control Board,” McDaniel said on June 16. “I am proud to have played a role in building a new industry on the foundation of social equity.”

McDaniel is remaining as CEO of the Dormitory Authority.

Several days later, on June 30, Gov. Kathy Hochul announced, in a press release, that a new firm was chosen, Chicago Atlantic, and it had pledged to invest the $150 million.

Karen DeWitt is Capitol Bureau Chief for New York State Public Radio, a network of 10 public radio stations in New York State. She has covered state government and politics for the network since 1990.