New York Governor Eyes Marijuana Regulator Leadership Change Amid Growing Frustration Over Licensing Delays

New York’s governor is eyeing potential leadership changes within the state’s marijuana regulatory apparatus as she reiterates her frustration with the turbulent legalization rollout—an issue that state senators are also raising with officials in a new letter telling them to “do better.”

It’s no secret that Gov. Kathy Hochul (D) is losing patience with the slow process of licensing cannabis retailers. In recent days she has said she’s “very fed up” with the “disaster” of a delay that’s limited the number of regulated cannabis shops, at the same time that illicit storefronts have proliferated.

To that end, the governor is proposing to expand enforcement authority so that officials are better positioned to respond to unlicensed shops, but she complained that she’s “operating with within the constraints of this law” that was enacted before she took office.

“We have to have the power for localities in the state of New York and our sheriffs and the Department of Finance and Taxation to be able to go in and padlock the stores that have set up this entirely illegal market, which is even competing with those as we’re trying to open a whole new industry,” Hochul said on Monday. “So I’m not satisfied. I want more enforcement. I am looking at leadership. I’m looking at opportunities to make major changes.”

While she’s placed some blame on regulators for the protracted implementation process—and also intervened when she learned that the Cannabis Control Board (CCB) only planned to approve three additional licenses at a since-cancelled meeting last month—the governor has also recognized that part of the problem is litigation from “greedy, out-of-state” operators that blocked licensing for months until an injunction was lifted last December.

“We’re going to work through this,” said in response to a question from CNY Central. “We will look back at some point and say there was a lot of growing pains. It was hard. But right now, I think it’s harder than it should be. And I’m taking this very seriously trying to find solutions.”

A coalition of state senators who are members of a cannabis committee that discussed problems with the legalization rollout in October also sent a letter to the head of the CCB last week, expressing their “concern with the timeline for licensing of adult-use cannabis dispensaries.”

“The consistent delays in licensing due to legal and bureaucratic challenges have resulted in a backlogged supply chain, financial and mental distress among applicants, and a thriving illicit market,” the letter, signed by six senators, said.

“We owe it to New Yorkers to do better,” they wrote. “We believe an adult-use cannabis program turnaround is fully possible, but there must be a more aggressive licensing timeline, increased agency transparency, and consistent communication with applicants and licensees. Working together, we can create the most equitable cannabis marketplace in the nation.”

Meanwhile, the governor released a budget plan last month that calls for the elimination of a THC potency tax, aiming to reduce costs for consumers in a way that could make the regulated market more competitive against illicit operators.

Officials were also set to consider proposed rules allowing home cultivation of cannabis for adults at last month’s meeting that was cancelled.

Also, as New York works to expand the state’s marijuana market, a bill filed in the Assembly last month would empower individual municipal governments to shut down unlicensed cannabis businesses and seize their products.

Over a dozen new cannabis retailers opened in December alone following a settlement agreement lifting an injunction that had imposed a months-long licensing blockade.

Separately, the state’s Department of Labor in December published dozens of sample job descriptions for positions in the legal industry, which officials said are intended to help companies streamline hiring processes and allow prospective employees to assess their qualifications to work in various roles within the emerging cannabis industry.

Hochul, meanwhile, signed legislation in November that attempts to make it somewhat easier for financial institutions to work with state-licensed cannabis clients. She also signed a separate bill that’s meant to provide tax relief to New York City marijuana businesses that are currently blocked from making federal deductions under an Internal Revenue Service (IRS) code known as 280E.

While Hochul signed an earlier budget bill in 2022 that included provisions allow state-level cannabis business tax deductions—a partial remedy to the ongoing federal issue—New York City has its own tax laws that weren’t affected by that change. The new measure is meant to fill that policy gap.

Hochul also recently vetoed legislation that would have allowed hemp seeds to be included in animal feed for pets, horses and camelids such as llamas and alpacas.

In September, 66 state lawmakers—about a third of the entire state legislature—also wrote to Hochul urging her to sign a bill that would allow licensed marijuana producers to sell products to tribal retailers. The plan would offer a release valve to hundreds of cannabis farmers who are currently sitting on surpluses but have no place to sell their products. Last month, however, Hochul vetoed that bill.

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Photo courtesy of WeedPornDaily.