A startup-like culture at the state's cannabis agency has contributed to “confusion, difficulties and delays” in the rollout of the state's legal market, according to a report to be released Friday.
The report of a state task force that investigated a licensing backlog at the Office of Cannabis Management found that inexperienced agency leadership, constantly changing policies and guidance, and a lack of transparency were among the internal problems that hampered the ability of hindered the agency's ability to issue more licenses and help more people. businesses opened.
The review, ordered by Governor Kathy Hochul in March after she labeled the rollout a “disaster,” paints the clearest picture yet of a licensing process that has been criticized as opaque and opaque. It also outlines ways to remove roadblocks that have helped the illicit market steal the benefit the state intended for small businesses and people harmed by the war on drugs.
Only 122 licensed recreational dispensaries have opened in the entire state, while officials say the number of illegal stores has nearly doubled to 2,900 in New York City alone. At the end of April, almost 4,900 applications for retail and craft businesses were still awaiting assessment, some as early as August 2022.
Jeanette Moy, the commissioner of the Office of General Services, who led the investigation, said that 90 percent of cannabis business applicants had failed to obtain licenses, a staggering figure that she said indicated significant shortcomings in the way the agency operated.
“To make equality work, policies are important, but operations are critical,” she said in an interview. “We have to improve the process. We have to clear the backlog. We need to get these legal cannabis stores off the ground.”
The waiting list includes 1,200 businesses that applied last fall and spent thousands of dollars to secure properties where they planned to set up shop. Regulators promised them an expedited review, but that was impossible because the cannabis agency had the capacity to review only 75 applications at a time, Ms. Moy said. Regulators also rejected another 309 applications without notifying applicants, some of whom waited nearly two years for a decision, the report said.
The report recommends doubling the number of staff dedicated to licensing, developing a public dashboard to display the status of licensing, and issuing formal denials rather than leaving applicants in the dark.
The Office of Cannabis Management appears to already be making some changes based on the evaluation. For the first time, the agency is recommending its board vote on denying some licenses, with the vote scheduled for Friday. And it has proposed a policy to clarify the review process for applications submitted in the fall.
The report acknowledged that the agency, which was created when recreational cannabis was legalized in 2021, faced significant challenges beyond its control, such as a tight labor market that made it difficult to recruit and retain employees. But while regulators worked quickly under difficult circumstances to get the legal market up and running again, the report cited the “perceived uniqueness of the agency's work” as “a major cultural roadblock to the willingness to adopt processes and systems that have proven successful elsewhere'.
As a result, the state has lost months and millions of dollars spent developing various software systems that could have been adapted by other agencies, the report said. One consequence was that those applying for permits in the fall faced delays and had to determine whether the locations where they planned to open dispensaries or craft businesses were suitable.
The report details how responsibility for vetting permit applicants is divided among four units of the agency, each with its own spreadsheet for tracking applications.
While most other licensing agencies have one person assigned to each license, the report says at least nine staff members handle each cannabis application. But no one is responsible for seeing it through to completion. This means that applicants do not have a single point of contact to address problems or resolve shortcomings. Instead, they are forwarded to general email addresses.
Higher up the ranks, there are eight senior officials who report directly to the Executive Director, who heads the agency. But the bulk of the agency's activities, including enforcement and licensing, fall under just two of them.
Ms Moy said she was confident that implementing the report's recommendations would help everyone involved in the process, from applicants to regulators.
“Let's make sure we're clear about the work that's happening and that we provide that clarity to everyone who is part of the process,” she said. “It's a little boring, but it's super important.”