A group of 18 organizations including New York civil rights organizations, small business supporters, cannabis social equity leaders, and drug research advocates today sent a letter to Governor Kathy Hochul expressing serious concerns about the administration’s pivot away from the equity commitments outlined in the Marijuana Regulation and Taxation Act (MRTA).

The letter was signed by a diverse group of advocacy organizations including the NAACP NY State Conference, Black Cannabis Industry Association, Minority Cannabis Business Association, Service Disabled Veterans in Cannabis Association, Drug Policy Alliance, NYC NORML,  and VOCAL-NY.

“Since the Office of Cannabis Management’s inaugural executive director was forced out, the OCM, under the leadership of its interim executive director who is novel to both cannabis and economic markets, has pursued efforts in service of big corporations at the expense of small business and equity outcomes,” wrote the coalition. “To ultimately restore confidence in the future of New York’s cannabis market buildout, OCM’s leadership must change to reflect expertise in cannabis, economic market development, and regulatory licensing.”

The group believes that the state has moved away from its equity-centered vision. It cited the following concerns:

• A shift toward corporate interests at the expense of small businesses, justice-involved entrepreneurs, and Conditional Adult-Use Retail Dispensary (CAURD) licensees who are directly impacted by a prior marijuana arrest.
• Short-sighted regulatory changes, such as the expansion of the November licensing queue, which sidelines smaller, less capitalized businesses that were part of the December licensing queue.
• Reduced oversight of equity efforts following changes to the scope of the Chief Equity Officer role.
• Chronic delays and underfunding in support programs for equity licensees.

OCM leadership complaints

While the letter didn’t specifically name Felicia Reid who was appointed the Acting Executive Director of the NYS Office of Cannabis Management (OCM) in June, the group was disappointed at her lack of cannabis experience. Reid came to the OCM with a decade of experience in State government and spent the last six years at the Office of Children and Family Services. The Governor cleaned house of the original OCM leadership amid accusations of self-dealing and the haphazard launch of the adult-use program. A damning report from the Office of General Services exposed numerous problems with the organization and running of the department.

The cannabis industry is unlike others and has numerous unique challenges which take time and experience to understand. It was well known in the state that many executive-level applicants with cannabis experience applied for the position but were overlooked in favor of someone who could give the OCM a more familiar government-style organizational structure.

The letter urged the Governor to appoint an Executive Director for OCM with the following qualifications:

• Expertise in cannabis markets, economic development, and regulatory licensing.
• A demonstrated commitment to equity and small businesses.
• Proven ability to engage meaningfully with impacted communities.

Social justice deprioritized

The social justice applicants known as the CAURD licensees have struggled to create viable businesses. Delays in location and license approvals, along with a lack of promised financial support have caused many of these operators to face extreme financial pressures.

The letter stated that the new licensing review had deprioritized the previous review of those with Social and Economic Equity Group (SEE) status and kept justice-involved entrepreneurs in the CAURD program waiting in the balance for location approvals. They also point out that the OCM changed the job description of the Chief Equity Officer role to ensure the next Chief Equity Officer held less decision-making oversight of licensing and market regulations with cannabis equity in mind.

While the letter didn’t specifically state the moves that favored corporate cannabis, the state has approved adult-use licenses for the original medical licensees called Registered Organizations or RO’s. Many of these companies were multi-state operations, thus the corporate cannabis name was applied. However, the price tag for these licenses was $20 million which could be paid in installments. Several ROs have claimed they couldn’t afford the fee, but the state did approve an alternative payment schedule that allows qualified ROs to split the initial $5 million fee into three installments over 18 months. As of November, only 217 CAURD licenses were approved in 2024 out of a total of 1,311 licenses.

The letter closed by saying “The MRTA was enacted to ensure that New York’s cannabis market prioritized health and safety, economic and racial equity, and sustainability. To achieve and sustain this effort, we implore you to heed our concerns and requests. We appreciate your attention to this critical matter.”