With regulations finalized and cannabis applications opening soon, tears and pleadings at Cannabis Control Board meeting

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New York’s Cannabis Control Board on Tuesday gave final approval to regulations that will govern the state’s legal cannabis industry, as dozens of stakeholders asked board members to stop large multi-state companies from entering the sector this year.

With the CCB’s unanimous approval of the 344-page rules and regulations document, businesses applying for cannabis licenses – including cultivator, processor, distributor, microbusiness and retail dispensary – can begin submitting documents on Oct. 4.

“I know that today is a day of mixed emotions for many who are excited to see the market launch,” said Chris Alexander, executive director of the Office of Cannabis Management. “There are additional items that we will continue to fine tune, as it relates to the regulations.”

Board members passed the regulatory package without debate. A public comment period at the end of Tuesday’s meeting lasted nearly two hours, as licensed growers, processors, retailers and other stakeholders aired concerns, criticisms and defenses of both the newly approved rules and how state cannabis regulators have handled New York’s legal weed rollout.

While most commenters made a point to acknowledge the work OCM has undertaken in an effort to create an equitable marijuana marketplace, many complained that the regulations set strict indoor grow limits for cultivators while allowing medical cannabis Registered Organizations larger indoor grow setups.

Numerous commenters said the OCM and CCB shouldn’t allow ROs to enter New York’s adult-use market until 2025, and noted that these large companies could begin competing against CAURD businesses while the vast majority of these licensees cannot open due to an active court injunction.

Hal McCabe, executive director of the Cannabis Association of New York, said conditionally licensed cultivators – who are in the midst of growing this year’s harvest, despite not being able to sell products they grew last year – are facing ruin. He said the rules CCB approved hamstring these growers, while giving larger companies more latitude to grow indoors.

“One RO’s grow space can replace 10 of our cultivators right now; you’ve got to allow us indoor grow,” McCabe said. “Otherwise, we’re not going to be able to compete.”

Other people who spoke during the public comment period encouraged OCM staff and CCB members to work with state lawmakers and Gov. Kathy Hochul to codify the CAURD program into state law, which they say could alleviate some challenges to CAURD’s legality.

Jillian Dragutsky, CEO of CAURD licensee Astro Management, said she thinks people and organizations will continually file suit against the CAURD program unless the state passes legislation that officially blesses it. The state’s failure to take this action, Dragutsky said, has left her and others feeling abandoned by the system.

“Many of us gave up other real opportunities to pursue a framework that has been halted through no fault of our own,” Dragutsky said.

The situation has gotten so bad for some stakeholders, said Tess Interlicchia of AUCC business Grateful Valley Farm, that cannabis business groups have had to ask law enforcement to do wellness checks on members who have become suicidal. Interlicchia said her company has lost millions, and is currently sitting on weed they grew last year, but cannot sell. She sold her tractor in January to save her farm, and now has nothing left to sell, she said.

Interlicchia criticized regulators for allowing ROs to expand into the adult-use market, and said she thinks these companies will help sink small businesses like hers.

“How can we … sit back and welcome a handful of out-of-state ‘cannabros’ who will destroy our economy before it’s even had a chance to take off?” Interlicchia asked. “How is that OK? It doesn’t seem like social equity to me.”

Others who commented argued that stakeholders should focus on how to support small businesses in a way that will enable them to compete, rather than trying to delay entry of large multi-state companies into New York’s adult-use market.

“Crying about it – hating – that’s not a solution,” said Maur Stringer, CEO of CAURD licensee The Magi Tree.

Stringer recalled a conversation he had with someone at a large multi-state operator who told Stringer that people without money will have trouble opening their stores, but it’s only a matter of time before his company opens, because they have money.

“I was upset, and I left the conversation, but he was right,” Stringer said. “They’re going to move forward – they already opened up a lane for them … I’m not going to fight these folks, I’m going to try to make solutions and pair with these folks.”

Dasheeda Dawson, director of Cannabis NYC, said she agreed with parts of what Stringer said. She added that New York cannabis regulators are creating an equity-focused cannabis market after a century of prohibition, and that advocates should be wary of some people criticizing their progress.

“Be careful listening to the opinions of those who haven’t achieved what we want to achieve,” Dawson said. “If you’ve never fought for equity, how are you standing here talking about it?”

Although the regulations and public comments about them were the highlight of Tuesday’s meeting, board members also approved a cannabis research application, approved a testing lab permit for Dope Diagnostics – while denying another one for Calyxis Laboratories – and greenlit a request from Etain, an RO, to change ownership after the company was acquired by RIV Capital last year.

During the meeting, OCM Director of Policy John Kagia reported that New York’s legal weed market is growing momentum, with nearly $66 million in cannabis sales since the beginning of 2023 – with more cannabis sold in the past two months than the six preceding months.

Ben Sheridan, OCM’s Deputy Director for Strategy and Policy Implementation, touted the success of growers’ showcase events, which the CCB approved earlier this summer. More than 22 of these events have been greenlit, with the participation of more than 70 licensed cultivators, 19 processors and 15 CAURDs. By the end of 2023, Sheridan said, the program could do $12 million in sales.

“It just shows the groundswell of support,” Sheridan said. “We sit here with a ton of optimism that [sales are] going to continue to grow.”

The OCM said goodbye to Axel Bernabe, the agency’s outgoing chief of staff and senior policy director. A holdover from Gov. Andrew Cuomo’s administration, Bernabe has been a key leader at OCM, who has been a strong supporter in establishing New York’s cannabis industry as a two-tier system that strictly divides supply side companies from retailers – similar to alcohol regulations.

In a speech during Tuesday’s meeting, Bernabe praised lawmakers who passed the MRTA, and complemented OCM staffers and CCB members for passing the new regulatory package.

What we’ve done today is put in place probably the nation’s most comprehensive set of [cannabis] regulations,” Bernabe said. “I will forever be committed to this program.”