The person guiding New York’s legal sales of cannabis says while the launch has been rocky, he still believes the state’s first-in-the-nation experiment with social equity will eventually be a success.
Capitol Bureau Chief Karen DeWitt spoke with Chris Alexander, executive director of the New York Office of Cannabis Management. Here’s an excerpt from that interview:
Karen DeWitt: New York has gone further than other states to try to right the wrongs created by the years-long prohibition on cannabis. First preference for growing and retail licenses were given to people who’ve been directly impacted through a marijuana-related criminal conviction, as long as they can show they’ve run a successful business for two years.
But the path has been anything but easy, and two years after the program began, just a fraction of the anticipated retail stores have opened. Progress on most of the social equity license applications have been halted due to a court injunction.
On Oct. 4, New York opened up the retail store licenses to anyone who wants one and can meet certain qualifications. The Office of Cannabis Management’s Chris Alexander says social equity groups, including service-disabled veterans and distressed farmers, will still be given priority.
Chris Alexander: We'll continue to work to make sure that those who were impacted by prohibition either through a conviction or some other impact, you know, have space to participate.
KD: The retail store openings have been rocky, I guess, to say the least. You're far behind schedule. I think there's just 24 shops now; there are supposed to be like 400. We mentioned the court injunction that's halted.
CA: I clarify, just in terms of you know, what's supposed to be open. Again, you know, just like any business, you know, business operators have to find appropriate locations, build them out, design them. That all takes time, right? What we found in tracking our operators from licensing to opening is that it's about seven months or so that it takes for folks to kind of really get going.
Now, we anticipated being a little further, but ... the injunction did stop that progress. And so we have a bunch of licensees that now are ready to open now because the time has elapsed, they've had the time to do what they needed to do. But they are still being held up by the injunction. So we're optimistic that we get through that process, and we're able to clear them all to open.
KD: But even so, it's far below what the initial expectations are. We've heard from a number of growers, and many of them aren't wealthy, that have been unable to sell their product, and they're going bankrupt. Some people in the industry are so upset and discouraged that they've called for your resignation. They think you should step down. What do you think about that? Do you think you're still the best person to do this job? And how do you gain the trust back from some of these people who become disenchanted?
CA: Well, I think you got to start from the beginning. We are the first state that decided not to rely on existing operators to start our market. Most states — not most states, all states — decided to start their market with those who are most well-capitalized and well-resourced. We took a chance on New York small farmers; we gave them opportunities to run, to grow the first crop and to build what will be the most successful cannabis market in the country. There have definitely been frustrations in rolling out retail, this is a supply chain that we're creating. And so, if one end is messed up, or one end is slowed up, it impacts everybody. What I would say, you know, is my clear instruction, my clear mandate has been to ensure that we're building and designing a market that's accessible, and that is not easily subjected to monopolization, which is what we've seen across the country. And so far, we've done that.
We've issued hundreds of licenses to small, independent businesses. And we have been able at this point to ensure that the first opportunities went to those who in other markets have been left behind and left out. And so you know, that's been my commitment.
I'm very confident in what will become of this moment as farmers move in and transition to indoor spaces to mixed-life spaces, (and) able to produce more crop and not be so reliant on a single crop.
But you know, it has been tough. And so I'm absolutely sensitive to the challenges that farmers have faced. But what I have also to say is they've been incredibly resilient. They grew amazing products, and those products really became super high-quality products in the dispensaries that we did have operational.
And the dispensaries that we have been able to open and have shown the demand for high-quality cannabis in New York is very high, because those dispensaries are performing incredibly well. And so we got a snippet, we've got a little preview of what New York's cannabis market can be. And I'm excited to keep working to bring the vision to life.
KD: Sounds like you're staying. You're committed to this.
CA: I'll be here.
KD: The report (by the website NY Cannabis Insider) that showed that there are a number of toxins and harmful materials in the cannabis that's being sold … should people who buy cannabis at the retail stores that are open now, should they be worried about that? Because that does seem a little concerning.
CA: Yeah, the report I believe you're referencing was one that was full of inaccuracies. We do have some of the most stringent product testing going on here in New York than anywhere else in the country, we do test every single lot of cannabis products for heavy metals, for inappropriate pesticides.
The nuanced issue that I think folks have talked about is total yeast and mold content, which in New York, is not a pass/fail, but it's something that is fully disclosed to a consumer. The reason that we have a higher total yeast and mold content in our products is because we were the first state to have an entirely sustainable outdoor crop. And outdoor cannabis has more mold than indoor cannabis. That being said, because those standards did not exist, we tracked, we measured, and now we will update standards to reflect where that product has come out. But there's a lot of this stuff that we're doing.
In terms of our actual product quality, the quality of the product in New York is of the highest quality that you will find in the country. That one outlier of that total use and mold content only is reflective of the fact that we had an outdoor crop and not entirely purely an indoor crop. And there were no standards across the country for that content. So we had to develop them ourselves.
