New York: Enforcement ongoing, farmers may lose big, and regulators lectured

The New York marijuana rollercoaster continues. All in the headlines for just a single Monday in early February: Crackdowns against unlicensed sales are still ramping up, legal marijuana farmers stand to lose a quarter of a million pounds due to a lack of legal shops, and regulators took heat from state lawmakers for the entire mess.

Busted

In January alone, state agents seized $3.3 million worth of illegal marijuana goods from 60 shops that were selling without proper permits, the New York Office of Cannabis Management said in a press release. While state law gives OCM agents the ability to levy fines of up to $10,000 a day for unlicensed marijuana sales, it’s not clear if any such citations were issued during the January inspections.

Supply is high

Also on Monday, MarketWatch reported that New York farmers could be forced to “throw away” up to a quarter million pounds of cannabis goods because there are only 61 operational legal retailers thus far, which is not nearly enough to handle the amount of inventory available thus far.

While eye-opening, the number isn’t necessarily surprising. The state estimated in August in court filings that there was still 582,000 pounds of harvested cannabis from 2022 still waiting to be sold, which was a motivating factor for the temporary marijuana farmers markets held across New York through the fall and up until New Year’s Eve. But the retail bottleneck – and the harsh market conditions overall – have led some farmers to already reportedly exit the trade.

Do better

To round out the beginning of the week, New York cannabis regulators also got a lecture from lawmakers on Monday, when half of the state Senate Subcommittee on Cannabis sent a letter to the Cannabis Control Board urging the agency to “do better.”

Six of the 12 subcommittee members signed the letter, which excoriated the board for only having planned to award three new cannabis retail licenses and two microbusiness permits at a Jan. 24 meeting, the Times Union reported, instead of 250. That CCB meeting was canceled at the last minute, however, reportedly at the behest of Gov. Kathy Hochul, who last week blasted the New York recreational marijuana market rollout as a “disaster.”

“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. … We owe it to New Yorkers to do better,” the lawmakers wrote. “There must be a more aggressive licensing timeline, increased agency transparency, and consistent communication with applicants and licensees.”

The senators compared New York’s rollout to New Jersey’s, which hit $320 million in its first year of adult-use cannabis sales compared to just $150 million in the Empire State, and wrote, “They are projected to close out 2024 with a billion dollars in sales; we can and should be beyond that.”

The senators also noted the immense backlog of retail applications the OCM is sitting on – more than 1,800 with retail sites locked down as of Nov. 17, and a total of over 4,300 applications submitted as of Dec. 18 – and lamented that the OCM this week was celebrating the opening of just the 50th brick-and-mortar dispensary opening. (There are a total of 61 licensed retailers as of Feb. 5, including deliveries, according to the OCM website.)

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