Joe Rossi, the cannabis practice group leader at Park Strategies, is advocating that New York’s cannabis entrepreneurs attend the meeting, in person or virtually, to speak out on issues affecting the state’s cannabis rollout. Attendees may sign up here.
Rossi wrote about some of the issues for Syracuse.com.
He discussed three primary criticisms of the cannabis rollout with Capital Tonight, including the inclusion of a lottery to determine which of the 1,457 applicants will be picked for the 250 licenses the Office of Cannabis Management (OCM) will issue.
“In the law, there was never a lottery,” Rossi said. “In the original draft regulations, there was no lottery. In the final regulations passed in September, it does mention that a lottery process can be used. (But) the CAURD program was not a lottery. The Conditional Cultivator licensing was not a lottery. The Conditional Processor licensing was not a lottery.”
In other words, according to Rossi, applicants were surprised by the inclusion of lottery system in the licensing process.
But according to Damian Fagon, the Office of Cannabis Management’s chief equity officer, the original adult-use regulations released in 2022 clearly stated that qualified lotteries as a pathway to licensure was something that the regulator was exploring.
Another issue facing some of Rossi’s clients is the evolution of the marijuana law.
While he acknowledged that there is no stated preferential treatment in law for applicants who own their own brick-and-mortar location, or who are paying rent on a retail outlet, he told Capital Tonight that many interested New Yorkers who read the law understood something very different.
“To New Yorkers that read the [marijuana law], it was incumbent on them to have a location and it was basically mandated to have one in order to get a license,” he explained. “So, a lot of New Yorkers went out and signed leases on locations, paid monthly rent or bought and are holding a deed for months if not years.”
Fagon argued the law was passed four years ago.
“I don’t believe there are many people who bought properties in 2021 in March that are upset now. In both adult-use regulations and in the law, there is language that allows for provisional licensing in lieu of having a location,” he said. “In the current application period, we created both pathways: People who have a location and people who do not have a location.”
Rossi’s primary grievance is that the Office of Cannabis Management is only issuing 250 licenses when there are over 1,500 people people who have applied, and a clear market for recreational cannabis.
“They (CCB) can issue a lot more than 250 licenses,” he said.
Fagon disagreed, saying that opening up the marketplace too much, too fast will hurt small businesses.
“When you over-license a market too early on, it creates market distortions that are harmful to mom and pop businesses,” Fagon said. “And we’ve seen that with the imbalance with our current farmers where we have 270 farmers and limited shelf space for them.”
When asked about OCM’s position that too many licenses could upend the market, Rossi was skeptical.
“With all due respect, the market is already upended,” he said.
