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NY’s top cannabis regulator steps down

Plus, a new front in hemp versus cannabis battle

Tuesday, May 28, 2024

Good morning.

We hope you had a restful Memorial Day weekend (for our American readers) and that you got some time off to unplug.

In this one, we have details on New York’s top cannabis regulator stepping down, New Hampshire’s “Soviet-style” legalization proposal, as well as the next battle in the hemp versus cannabis tit-for-tat. 

-JB & JR

This newsletter is 1,389 words or about an 8-minute read. 

💡What’s the big deal?

Top New York cannabis regulator will step down

What happened: New York’s top cannabis regulator will step down from his position in two weeks, after he lost the confidence of Governor Kathy Hochul.

Chris Alexander, who was appointed as the head of the Office of Cannabis Management in 2021, has submitted his resignation and will leave the agency in under two weeks. 

“I have been reluctant to write this email due to the deep connection and commitment I have to this work and to this Team. And while I planned to serve out the remainder of my term, I no longer have confidence in my ability to do my job and lead this team effectively under current circumstances,” Alexander wrote in an email to his team, per The City NY

“It would be disingenuous for me to not acknowledge how difficult the last several months have been.” 

Back up: Alexander’s departure comes on the heels of an investigation commissioned by Hochul — who called legal cannabis in New York a “disaster” earlier this year — into the delayed rollout of cannabis licenses in the state and the ongoing challenges posed by the illicit market.

The investigation was led by Jeannette Moy, the commissioner of the New York State Office of General Services, who released a 31-page report earlier this month detailing some of the agency’s missteps under Alexander. 

What they’re saying: Some former OCM staffers have taken to social media to provide their support for Alexander.

“Chris Alexander will be remembered for launching the first equity driven cannabis market. Full stop,” Freeman Klopott, who formerly ran communications for the agency, said on X

“Damn shame she never supported him do the job she hired him to do. He’s better off without dealing with Hochul’s bs and NY is better off thanks the work he did accomplish,” Aaron Ghitelman, a former communications staffer at the OCM said on X

Both Ghitelman and Klopott joined Cultivated Live to discuss their work at the OCM and where New York cannabis goes from here in recent weeks. 

And: The Cannabis Regulators of Color Coalition, a national advocacy group, said Alexander leaving the agency “poses a grave threat to the progress and integrity of equitable cannabis regulation in New York State.”

Our take: I’ve spoken with many people inside and outside of New York’s cannabis industry in the past few days. All say Alexander was a principled leader. But perceptions of his tenure at the top of the OCM vary. 

Some blame Hochul for not setting his agency up for success. Others say that Alexander may have been too young and inexperienced to accomplish the ambitious goals he laid out.

Many will view New York’s tumultuous cannabis roll-out as evidence that centering social equity in cannabis legalization doesn’t work. I would say that it’s a learning experience that other states should look toward. 

What Alexander tried to do was hard: Legalize cannabis, deal with the regulatory hornet’s nest and rough and tumble world of New York State politics, all while fending off well-heeled corporations vying for a piece of what could potentially be the biggest cannabis market in the country. 

Centering social equity in that equation makes the job of setting up a licensed, regulated, and well-functioning commercial cannabis market even harder. 

And as we’ve said before, these goals can only be accomplished if average consumers are able to buy the products they like conveniently and at the right price point. 


💬 Quote of the day

“It’s amazing to me the number of stories I’ve already read that this is Biden’s plan to be able to win the election is to get more people to smoke marijuana,” Oklahoma Sen. James Lankford told Ask a Pol. “I was like, okay, well, that’s quite a plan, ‘I can only win the election when more people smoke marijuana.”

“I think it’s a bad idea, and I think it sends all the wrong message about the drug use in our country.”

New Hampshire’s Senate passes a state-run cannabis bill

What happened: New Hampshire’s Republican-controlled Senate passed a contested bill by a margin of 14-10 that legalizes up to 15 state-run dispensaries in the state.

But the bill needs to be rectified with a far less restrictive bill that has passed the state House twice, before it gets sent to Governor Chris Sununu’s desk who has said he wouldn’t veto the state-run model bill.

Sununu has long favored a limited, state-run model, similar to the state’s liquor sales, though the House — and most New Hampshire voters, it seems — favor a more commercial model similar to neighboring states. 

But unlike other Republican governors, Sununu says he’s somewhat open to limited cannabis sales, or at the very least, won’t veto a bill. 

Virginia Governor Glenn Youngkin outright vetoed legal cannabis in his state earlier this year, and Florida Governor Ron DeSantis said he will actively campaign against a cannabis legalization ballot measure in November. 

What they’re saying: Cannabis advocates called the bill a “Soviet-style” vision for legalization. 

"We're just asking all 239 members of the House that voted for this, if it comes back this way, to change their votes to 'no' votes and stop this in its tracks," said Daryl Eames, of the New Hampshire Cannabis Association. "If you talk to residents of the state, they don't want this."

And: Rep. Erica Layon, the sponsor of the House bill, told Marijuana Moment that “every move they make away from the House position makes it less and less likely to pass.”

“It is going against so many principles they have, just like this crony model goes against Republican principles,” she added as to why Senate Democrats agreed to certain amendments in the bill, such as misdemeanor charges for public consumption. 

What happens next: The bill will be sent back to be renegotiated in the House before it ends up on the governor’s desk. 

If passed in its current form, the bill would delay the legalization of possession until 2026 once the state-run dispensaries are up and running. 

But with looming negotiations between the House and Senate over the hotly contested bill, expect the final bill to look different.


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Quick hits

In the latest tit-for-tat between the intoxicating hemp and traditional cannabis industries, the Drug Enforcement Agency said hemp derived THCA — which, when heated, turns into the bio-available THC, doesn’t “meet the definition” of legal hemp per the 2018 Farm Bill. The 2024 Farm Bill is being debated in Congress, where new definitions of hemp — and how to regulate hemp-derived intoxicating cannabis are pertinent questions. 

David Tully, the owner of “I’m Stuck,” a chain of illicit dispensaries in New York, was fined for $15.2 million as part of the state’s broader crackdown on illicit stores. State Attorney General Letitia James said unlicensed cannabis shops are “hurting our communities,” in a statement

Minnesota lawmakers passed a bill outlining new rules for cannabis businesses in the state, including social equity rules, hemp-derived intoxicating drinks, and more. Green Market Report has what you need

A proposed bill that would give existing medical cannabis companies first crack at the Delaware market is facing opposition in the state’s House, WHYY reports

New York City police found “several million dollars” worth of illicit cannabis products in a Brooklyn warehouse, after the state said it would ramp up enforcement. 

Nicki Minaj’s Manchester, England concert was delayed after police in The Netherlands found cannabis in her bag after searching it. Despite the country’s permissive attitude toward cannabis use, the drug remains illegal.

📊 Chart of the day

Cannabis industry leaders say compliance costs, wonky federal laws, and overbearing taxation are the biggest challenges facing their business, according to MJBizDaily’s factbook:

🤓 What we’re reading

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