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New York’s cannabis regulators approved more than 100 new business licenses and removed some restrictions on marketing during an at-times tense Wednesday morning meeting, which was not attended by the Office of Cannabis Management’s new interim leader.
Members of the Cannabis Control Board unanimously approved amendments to rules for packaging, labeling, marketing and advertising, which have been widely panned by weed businesses as overly restrictive and harmful to business.
The amendments relax some of the most restrictive elements of the packaging and marketing regulations, including bans on colorful packaging, discount programs and other marketing techniques, said John Kagia, the OCM’s director of policy.
“There’s no need to artificially restrict the market on issues that are not compromising public health and safety,” Kagia said on Wednesday. “It’s critical that we strengthen our market’s ability to compete, even as we maintain our focus on public health.”
Some of the most important changes to packaging and marketing regulations include:
- Companies may do limited billboard advertising (but billboards can only include the company’s name, logo, location and contact information).
- Retailers may offer discounts and loyalty programs to customers.
- Retail brands may use bubble letters and bright colors on their packaging (but are still barred from using things like cartoon characters, images of candy or other elements that could be attractive to minors under 21).
- Dispensaries may use up to three outdoor signs at their stores.
Retailers and cannabis industry advocates in New York have long called for regulators to trim down packaging and marketing restrictions, saying they make it difficult to compete against illicit shops, which are often flanked with neon signage that attracts customers.
Shortly after the CCB approved the amendments, Damien Cornwell – president of the Cannabis Association of New York – took a victory lap, noting the time CANY has spent advocating for such a move.
“CANY has long fought for changes to the state’s cannabis marketing rules,” Cornwell said in a statement. “And today, the CCB took the important step to amend marketing and advertising regulations so that discount loyalty programs are allowed as well as an expansion of how we can market our brands.”
Now that the CCB has approved the amended rules, the new regulations will go through a 60-day comment period. Following that process, the CCB can give final approval, after which they would be published in the State Register.
Until the new rules are finalized, the more restrictive set of regulations will apply, Kagia said.
During discussion of the updated packaging and marketing regulations, board member Adam Perry noted the conspicuous absence of Felicia A. B. Reid, the OCM’s interim director, who was recently appointed to the position following the exit of inaugural OCM head Chris Alexander.
The meeting, which began about 30 minutes late, grew tense at times, as Perry asked OCM Chief Operating Officer Patrick McKeage questions about the time it takes the agency to approve a license.
Perry noted that it takes 26 weeks – on average – for the New York State Liquor Authority to approve a license, before asking McKeage how long it’s taking the OCM to process applications. He seemed dumbstruck when McKeage told him the agency takes about 60 days from the time they open an application to approve or deny an application.
“You must be wrong, that information cannot be correct, because I’ve heard that everything has been a disaster,” Perry said, before backtracking. “I believe you’re correct … I just wonder why some people have this impression that it’s just a nightmare, that you’re not granting licenses and it takes forever.”
Following that exchange, Perry noted several times that a 60-day turnaround period for applications is better than many state agencies. Toward the end of the meeting, board member Jennifer Gilbert Jenkins shouted at Perry.
“Adam, you have to stop repeating that!” Gilbert Jenkins said. “We are processing licenses for people who applied in November and December. I don’t care what day they open, we don’t take 60 days.”
Perry responded that Gilbert Jenkins was trying to defame and stifle people from talking about issues they believe are important.
Earlier in the meeting, members approved 109 new licenses, including 21 retailers, 23 microbusinesses, 23 cultivators, 20 distributors and 22 processors.
During an update on New York’s legal cannabis market, Kagia said legal dispensaries have sold over $421 million in legal cannabis products since legalization. June alone saw $71 million in sales, a 54% increase from the previous month.
Kagia and other OCM staff noted that increases in legal sales are partially owed to enforcement efforts, which have padlocked about 160 illicit shops across the state.
“We are seeing very green shoots,” Kagia said. “We have seen material impact on our retailers as we have shut down illicit operators.”