Stakeholders across New York’s broken recreational cannabis industry have had it.
Cannabis farmers, processors and retailers have advocated separately since recreational marijuana was legalized in 2021 — but have teamed up for the first time hoping to make progress to get New York’s legal market off the ground.
They lobbied lawmakers in Albany hard this week, pushing them to take up a dozen proposals they say must be prioritized this session to help fix the state’s delayed rollout of recreational marijuana.
They want $300 million in the next budget to help distressed farmers who trusted state leaders who promised farmers if they grew enough cannabis, the state would keep pace with opening dispensaries. Cannabis cultivators across the state say they need aid to stay afloat after many have closed or faced bankruptcy as hundreds of thousands of pounds of cannabis flower rots in storage without enough stores.
“We are asking for help,” Cannabis Farmers Alliance President Jeanette Miller said. “The farmers have been in dire straits since we got here. …We are asking for our government, our Legislature, our governor to make this right and to fulfill the promises made to cannabis farmers and to the other stakeholders in this industry who promises were made to as well.”
Gov. Kathy Hochul told The Buffalo News editorial board the state’s rollout of recreational marijuana is “a disaster” that will be difficult to fix. With 59 open legal dispensaries across the state after nearly three years, few would disagree.
Nic Fera, a Cannabis Farmers Alliance board member, said the $300 million fund is far less than the millions of dollars the state will lose in tax revenue if nothing changes with thousands of illegal dispensaries statewide.
“We need immediate financial relief,” said Nic Fera, a Cannabis Farmers Alliance board member. “The state has caused this injury to this segment of the market and the state needs to do something immediately — we’re talking within this budget session. It has to happen. If we don’t have relief by April 1, people aren’t going to be planting this year.”
The alliance recently surveyed the state’s 289 licensed cultivators, and about one-third responded. Fera says 97% of the 90 farmers who responded say they’re operating at a loss.
Assembly Agriculture Committee chair Donna Lupardo said Wednesday she’s working to educate her legislative colleagues that cannabis is a field crop that loses its color, aroma and potency. Lupardo sponsors a bill for New York to classify cannabis as an agricultural crop.
“It’s a huge learning opportunity to explain the role farmers are playing, and the crop actually does, in fact, go bad and that they cannot sustain the financial losses they have experienced,” Lupardo said.
The bill passed the Assembly last year, but died in the Senate.
Growers, processors and retailers alike applaud Hochul for proposing to repeal the cannabis potency tax in her budget. The governor also proposed language in the budget to allow municipalities to set civili fines for illegal cannabis sales and reinvest the money to bolster enforcement in local communities in efforts to crack down on the number of illegal shops.
Two new lawsuits were filed against the state Office of Cannabis Management within the last week that threaten to bring the industry to a standstill again after past lawsuits forced the Cannabis Control Board to cease issuing new licenses or opening new stores for a combined nine months in the last two years. Members of the Cannabis Farmers Alliance, Association of NY Cannabis Processors, the Black Cannabis Industry Association and the state Cannabis Retail and Medical Cannabis Industry associations want lawmakers to codify the Conditional Adult-Use Retail Application program, which prioritized licenses for people with past marijuana convictions, to prevent additional legal challenges.
The groups also will fight to repeal the medical cannabis excise tax, create a refundable tax credit for licensed processors, recognize medical marijuana patients from other states, require OCM to release demographic data about who they issue licenses to, among other items on their agenda.
“We are a holistic entity,” said John Vavalo, president of the Association of NY Cannabis Processors. “We need to all work together to promote everything going smoothly.”
Hochul has started to become more vocal with her displeasure at the Office of Cannabis Management and the speed of approving licenses in past weeks, giving advocates and lawmakers hope the Executive Chamber will get more involved as the board drags its feet approving licenses, and plans to award a few hundred of thousands of waiting applicants.
The governor’s staff pushed the Cannabis Control Board to cancel last week’s meeting after members only prepared to approve three new retail licenses. Hochul said she expected the board to consider 400 licenses for retailers and cultivators.
“My team got involved and said ‘No, go back to the drawing board, work harder, get this done,'” she told reporters in Buffalo last week. “And no, I’m not satisfied with the pace.”
Advocates argue board members had months they were legally barred from issuing licenses to review applications and prepare hundreds for immediate approval while waiting for a settlement.
Senate Cannabis Subcommittee chair Jeremy Cooney said he is equally frustrated by the slow timeline, and urges Cannabis Control Board to prioritize applicants who already have a retail space because they are best poised to combat the overwhelming black market. He wants more funding in the budget to be earmarked to shutter illegal stores.
“We see the illicit market moving faster than we ever thought, we see money being poured into New York state to support the illicit operations like we never expected,” Cooney said Wednesday. “So we just need to fight fire with fire. Let’s do it right: Let’s prioritze social equity, but let’s move faster and meet the expectations of New Yorkers.”
Last year’s state budget allocated $5 million to the Office of Cannabis Management for the department to hire 37 additional workers to focus on illegal dispensaries and enforcement. OCM has the budget to hire a total of 64 employees that focus on enforcement.
OCM did not answer questions Wednesday for an update on how many of the positions the agency has filled since last spring, or how many people currently work in the department targeting illegal shops.
Cooney sponsors legislation to remove marketing restrictions to allow dispensaries to better advertise cannabis products. Retailers have argued the state’s current rules are counterproductive to their success, and they should be permitted to display advertisements similar to the regulations for alcoholic beverages.
“What OCM, the Cannabis Control Board and the governor has done to prioritize social equity is the right move — it’s also the harder move,” Cooney said. “Things that are right are harder to do. So let’s recognize that and celebrate that, [but] at the same time, you see the unintended consequences of slow movement.”
When marijuana was legalized in spring 2021, top budget officials projected the state would net $20 million in revenue from adult-use cannabis taxes and licensing fees in Fiscal Year 2022-23, and $115 million in FY 2023-24.
The state collected $3.7 million the first year as legal challenges prevented the first dispensary from opening until late December 2022.
Budget officials Wednesday said the state is on track to receive $70 million in revenue from recreational cannabis through the end of the fiscal year, which ends March 31.
