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The head of New York’s Cannabis Advisory Board said the group needs a staff and budget to function properly, and noted the board hasn’t been as involved with the state’s legal weed rollout as the cannabis law prescribes.
Board Chair Joseph Belluck said at the start of the Tuesday meeting that the Cannabis Control Board hasn’t yet reached out to him or other members, and noted that the CCB recently passed a slate of regulations without consulting or seeking advice from the advisory board.
“We come to these meetings, we get very thorough updates, but our ability to make recommendations and to fulfill our role in the statute has not come to fruition,” Belluck said. “We have a much broader role that’s in the statute.”
The Marijuana Regulation and Taxation Act tasks Cannabis Advisory Board members with deciding how the state spends much of the tax revenue from its legal weed industry. Under the MRTA, 40% of the revenue from cannabis taxes and fees will pay for revitalization projects in communities most harmed by the War on Drugs.
In addition to advising OCM and CCB on policy, advisory members will decide how to spend this reinvestment fund.
On Tuesday, Belluck pointed out that the advisory board hasn’t been consulted on issues including the number of licenses the OCM will dole out or aspects of social equity programs – both of which the MRTA says the CAB “shall” provide advice on.
“When you see the word ‘shall’ in the statute, it’s a directive to do something, it’s not an option,” Belluck said.
OCM Executive Director Chris Alexander acknowledged regulators haven’t done much to loop in CAB members. He said the OCM is planning to assign a dedicated staffer to process grants for the state’s community reinvestment fund – which will be bankrolled via taxes on cannabis products.
“I absolutely agree, there’s so much more that this body can and should be doing; and that’s on us,” Alexander said.
Alexander and members of OCM’s leadership spent much of the meeting updating advisory board members on the agency’s progress on multiple fronts, and addressing their concerns.
The executive director also said he expects the CCB to issue more than 1,000 licenses in the coming application period.
“This is the largest rollout of licenses to date, in any cannabis market,” Alexander said.
OCM Director of Policy John Kagia told advisory board members that the state’s total legal sales have reached $66 million so far this year, with $34.1 million of that purchased in July and August.
Kagia also delved into the Cannabis Grower Showcases, which are approved events at which Adult-Use Conditional Cultivators and Adult-Use Conditional Processors may sell their products. The OCM has approved 26 of these events across the state, Kagia said, adding that the program has generated customer interest and boosted sales.
Related: NY’s Cannabis Growers Showcases making a ‘dent’ — but they’re not a total fix-it
“The Cannabis Grower Showcases have presented an incredible opportunity for consumers to access legal, regulated cannabis at non-standard storefront locations,” Kagia said. “It also provides a really unique opportunity for cultivators, in particular, to connect with consumers.”
Advisory board member Marc Ramirez brought up concerns he’s heard about medical cannabis Registered Organizations being able to expand into adult-use retail earlier than the OCM initially planned. Alexander said the change was born out of necessity and the realization that keeping ROs out of retail wouldn’t do much to protect small business.
When the OCM presented its first draft of regulations for New York’s adult-use market, they proposed requiring ROs – most of which are large multi-state companies – to wait at least three years to open recreational dispensaries. However, final regulations the CCB approved this month allow ROs to expand into adult-use sales immediately.
Alexander said on Tuesday that the OCM wanted to keep ROs out of adult-use retail for a significant amount of time so that small and mid-sized weed retailers had time to establish their businesses. But the state’s retail rollout has taken longer than expected, and right now the state needs more dispensaries so that licensed growers have more places to possibly sell their products.
“Our retail rollout was moving slowly and we needed some opportunities to ensure that the supply chain that we had begun with our small farmers was able to have enough” retail outlets, Alexander said.
“Additionally, the intent of creating the space and the runway to guard against market domination by the largest players wasn’t actually going to be protected by that three-year delay.”
Alexander said ROs will be able to apply for adult-use expansion on Oct. 4, the same day OCM plans to start the application process for cannabis business license types including cultivator, processor, distributor, microbusiness and retail dispensary.
OCM Chief Equity Officer Damian Fagon previewed four programs the agency will launch over the next six months. They include a program that will help people fill out license applications, a program to help distressed farmers transition to the legal market, an incubator program to help licensees plan their businesses, and an investor outreach program to connect financiers with weed companies.
Related: Let’s keep New York cannabis jobs, profits, and innovation in New York (Guest Column)
In a subcommittee meeting before the full board met, advisory board member Allan Gandelman highlighted the issue of out-of-state brands being sold at legal New York dispensaries. The brands are using local cultivators to produce these branded products in-state – a setup known as “white-labeling.” However, Gandelman said, some of these brands are also being sold at illegal shops.
“If the legal brands are to follow those rules, we will have to address the brands on the legal shelves who are not following those rules on the illicit side,” Gandelman said. “It will create a disadvantage to the small brands who are based in New York, and do not have an out-of-state supply chain that they can sell to the illicit shops.”