Scathing Internal Report Exposes New York's Cannabis Agency As Inexperienced, Irresponsible, Ineffective: Heads Are Rolling

Zinger Key Points
  • Some key problems the cannabis agency included erratic changes in licensing regulations, a lack of transparency and ineffective enforcement
  • The report called the agency a "mission-driven" startup rather than a competent government office. The head was fired.

An internal review released Friday revealed significant challenges, to put it nicely, plaguing New York’s legal cannabis market.

The issues are primarily attributed to inexperienced leadership within the state’s Office of Cannabis Management (OCM). The report was blunt, calling the OCM a “mission-driven” startup rather than a competent government office.

Governor Kathy Hochul then proceeded to fire Chris Alexander, the head of the OCM.

The report noted that the OCM was staffed with inexperienced leadership, lacked a transparent process for licensing new dispensaries and had virtually no customer service for licensees.

"The majority of OCM's most senior leadership has relatively limited experience in leading regulatory entities, and the agency has experienced significant turnover in executive roles," the report reads.

"It has struggled to make the transition to a mature regulatory agency," noted the report, which was produced by Office of General Services Commissioner Jeanette Moy and obtained by the NY Post before being released publicly Friday.

See Also: Cannabis Saga In The Empire State: Corruption Or Ineptitude? Private Equity Tramples Social Equity, Report Reveals

The report highlighted "implementation challenges" that "resulted in confusion, difficulties, and delays for well-intentioned line staff as well as applicants," referring to the complicated hoops potential licensees have had to jump through.

Other key problems within the OCM included erratic changes in licensing regulations, a lack of transparency and ineffective enforcement measures. These issues have not only hindered the legal cannabis market but have also fostered the proliferation of unlicensed cannabis shops across New York state. The Big Apple alone has more than 2,000 illicit shops according the local authorities.

Hochul, recognizing the severity of the situation, ordered a comprehensive review in March to address the bureaucratic hurdles and legal setbacks faced by the OCM.

At the time, she called the program a “disaster.”

Despite initial intentions to prioritize social equity by allocating licenses to nonprofits and individuals with prior convictions or those who suffered from the War on Drugs, the process was marred by lawsuits, delays and regulatory inconsistencies.

The OCM's chief equity officer Damian Fagon also happens to be on administrative leave pending an ongoing internal investigation that he retaliated against a Hudson Valley cannabis processor who was critical of OCM.

At this point, with only a limited number of legal cannabis dispensaries operating since late 2022, the illegal market has thrived. Unlicensed retailers who seem to operate with impunity are undermining the legal framework – a situation the OCM seemed incapable of controlling.

The report outlined various policy solutions to address the agency’s challenges, including the recruitment of experienced staff, streamlining licensing processes, and engaging in public outreach efforts to identify and rectify issues.

Photo courtesy of OCM

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Posted In: CannabisGovernmentNewsRegulationsPoliticsTop StoriesChris AlexanderGov. Kathy HochulInternal reportNew York CannabisOffice of Cannabis ManagementStories That Matter
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