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Officials Highlight Areas of Failure as Cannabis Program in New York Is Overhauled

Major changes are being made at the Office of Cannabis Management (OCM) in New York State after the governor directed that a review be conducted. The review, as ordered by Governor Kathy Hochul, led to the discovery that New York’s rollout of legalized recreational cannabis had been a failure.

One report, released last week, cites an underspent budget and inexperienced leadership as some of the errors by the office. According to the report, a total of $26 million, which could have assisted in clearing application backlogs, remained unused.

In her statement, Hochul announced that the director of the OCM, Chris Alexander, would be resigning later this year year. She explained that the overhaul involved ensuring new license applications were completed in 90 days, clearing up application backlog, solving the issue with internal license processing and establishing an enforcement task force focused on shutting down illicit marijuana stores.

Figures from the report show that there are more than 120 licensed marijuana shops across the state. However, in New York City alone, there exists more than 2,900 illicit marijuana stores. Additionally, the report shows that at the end of April, there was a backlog of almost 4,900 applications that hadn’t yet been reviewed.

Hochul noted that the crackdown on illegal stores was focused on stabilizing neighborhoods, creating an environment for localities to approve laws of their own and pursuing landlords who knowingly rented out their premises to illicit shops.

New York state police’s first deputy superintendent, R. Christopher West, stated that the department’s target was drug traffickers, who were flooding the state with illegal marijuana by supplying shops in different parts of the state. The department is also working to eliminate factors that disrupted the legal market.

Attorney Benjamin Rattner, who represents individuals seeking legal licenses, thinks that while this crackdown will take time, it’s a good thing. Dispensary applicants are expected to keep up with changing processes, even after the report determined that 90% of them hadn’t yet received their licenses.

One applicant, Iris Ladao, made her application to launch a legal marijuana dispensary in Brooklyn in November 2023. Since then, she has received no communication regarding when her application may be reviewed. This is despite the fact that she’s been paying rent on a still-empty store because it is mandatory that a lease be included in the application.

She is one of the many applicants who have been navigating the licensing process for a while now while getting dragged along with zero feedback.

The faltering start to New York’s marijuana legalization program is likely to be disappointing to the marijuana industry, including enterprises such as Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF), which thought that the state would be stabilized by this time after implementation of adult-use sales commenced.

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