NY Cannabis Control Board’s jam-packed meeting 🗽

NY, NY
New faces, product recalls, and more at the New York CCB meeting 

What happened: New York’s Cannabis Control Board (CCB) welcomed new leadership, while giving outdoors growers and aspiring retailers in hostile towns a new way to compete during a meeting on Friday. 

The CCB oversees the Office of Cannabis Management, New York’s chief regulatory agency. 

Driving the news: New York’s cannabis market continues to grow and evolve. Regulators, now under new leadership, need to navigate that growth if it wants to avoid the same market crashes that have hit older state cannabis markets. 

What they’re saying: "Please continue to listen to the critical voices on the outside as well as the inside, because as Milton Friedman once warned, one of the great mistakes is to judge policies and programs by their intentions rather than their results," Tremaine Wright, the first and now former chair of the CCB, said in a farewell speech.

Letting growers come in from the cold: The CCB voted to allow outdoor cultivators to convert to indoor, in order for them to better compete with the increasing market share held by Registered Organizations (ROs), which are mostly big, publicly traded companies that first operated in the state’s medical cannabis market. 

Prior to the change, ROs were the only producers allowed to use indoor grows, while everyone else was beholden to seasonal grow cycles.

Converted licenses will be for up to 12,500 square feet of canopy, so as not to flood the market. The recommendation for the change comes from the OCM’s 2024 market report.

"The goal is to keep the amount of supply proportional," OCM Director of Policy John Kagia said.

So far, the CCB has approved enough licenses to produce about 8.1 million square feet of canopy, which could accommodate about 183% of next year's demand. That total jumps up to 14.7 million square feet, or 480% of the anticipated annual product demand, when adding in all open cultivator applications,

Unreasonably impractical: The board also approved new guidelines for approving dispensary locations that include a process for the state to override local denials for dispensaries if they are deemed “unreasonably impractical.” 

This change could directly impact areas in Long Island where local government has so far been successful at staving off cannabis retail, making it the least-concentrated region in the state.

New faces: This was the CCB’s first meeting with new chair Jessica Garcia. The board also nominated and approved incoming Chief Equity Officer L. Simone Washington.

Last month anonymous OCM employees released a letter calling on Gov. Kathy Hochul to replace leadership at the agency. The prior Chief Equity Officer, Damian Fagon, resigned last fall following an internal investigation into unsubstantiated claims that he abused his authority.

Product recalls: The OCM ordered a recall on 28 products from IndoGrow LLC for elevated pesticide levels and inversion — meaning, selling either out-of-state or illicit cannabis via the legal market. 

Nine other product lots were already recalled from IndoGrow LLC earlier this month after lab testing found too much pesticide in the products.

The CCB approved 53 new licenses:

• 1 cultivation. 

• 12 retail.

• 14 microbusiness.

• 5 distribution.

• 21 processor.

• 1,785 licenses approved so far. 

November and December queues still waiting: There are still 361 applications from November 2023 that are under review and a portion of the 361 denied applications will go back to review, following a court order from earlier this month.

"I think we can anticipate that a chunk of those will be put back into processing," Kagia said.

Once the November applications are finished, OCM will be able to get started on the 2,706 retail applications submitted in December 2023.

“It’s going to take us until the end of the year to get through the November queue before we can begin the December queue, at least for retail.” Kagia said.  

-ZH

Sales per store — a key metric both regulators and operators watch — has declined in New York since last summer. It’s primarily the result of increased competition. 

If the Office of Cannabis Management (OCM) were to approve every pending retail application and they were all able to open for business, the state would have one shop for every 4,160 people. OCM presented the charts above and below which show how licensing continues to impact total sales. 

"I’ve spent most of my adult life in public service — as governor of Texas, U.S. secretary of energy and a proud veteran. And few things have moved me like what I’ve witnessed with a psychedelic drug made from a shrub in Africa." Rick Perry said about ibogaine in the Washington Post. 

Perry helped lead the political effort that recently culminated in Texas committing $50 million to research ibogaine. Perry founded Americans for Ibogaine, an advocacy group, and said he’s dedicating the rest of his life to study the drug. 

Athletes including Mike Tyson and Kevin Durant call on Trump to pursue cannabis reform 🥊

A group of athletes including Mike Tyson, Kevin Durant, Ricky Williams, and Allen Iverson called on Trump to reschedule cannabis, provide clemency, and enact cannabis banking reform. “After making sweeping promises to voters in 2020, former President Biden failed to deliver on his pledge to address marijuana-related injustices…” they wrote, as reported by Fox News. Tyson runs a cannabis brand, and frequently posts on social media about his advocacy efforts. 

Trulieve reportedly will pay Matt Gaetz up to $2 million to push rescheduling with Trump 🤔

Florida cannabis giant Trulieve is paying former congressmen and scuttled Attorney General pick Matt Gaetz up to $2 million to lobby the Trump Administration on cannabis reform, including rescheduling, reports The Daily Beast, after a TikTok user noticed Gaetz reading the contract on his laptop on a flight. Per the contract, Gaetz will be paid $250,000 “if the matter resolves,” as well as a “Super Success Fee,” of up to $2 million — the guess is that applies to moving cannabis from Schedule I to Schedule III. While in Congress, Gaetz was a strong supporter of cannabis reform and maintains close connections to Trump. Trulieve didn’t immediately respond to a request for comment. 

Gov. Newsom joins push to avoid California cannabis tax increase 👍

California Gov. Gavin Newsom said he will sign a proposal to stop the coming excise tax increase for cannabis, reports SF Gate. The tax is set to increase from 15% to 19%, which the state’s beleaguered cannabis industry says could put many out of business. A proposal to halt the increase was shot down before it made it into the state’s final budget last week. If the increase isn’t stopped, it’s set to go into effect on July 1. 

Nebraska judge dismisses lawsuit seeking to overturn medical cannabis 🤝

A Nebraska judge dismissed a lawsuit filed by a former state senator, John Kuehn, who was seeking to overturn the state’s voter-approved medical cannabis law. Over 70% of Nebraskans voted in favor of medical legalization. Read more from the Nebraska Examiner.

Illicit Oklahoma cannabis bust leads to deportations 👀

Law enforcement busted multiple illicit cannabis grows in Oklahoma, leading to charges for a 35-year-old Chinese national. US Immigrations and Customs Enforcement (ICE) detained 15 people found working at the facilities. Authorities seized nearly 41,000 cannabis plants. Illicit cannabis grows in Oklahoma and other states have been linked to Chinese crime syndicates, authorities say.

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Cannabis seeds in space study fails 🚀

A rocket carrying cannabis seeds provided by Martian Grow — a citizen-funded science project seeking to grow cannabis and other crops on Mars — crashed into the Pacific Ocean last week, Gizmodo reports. The rocket was launched by SpaceX, with a reentry capsule provided by The Exploration Company, failed during reentry. The capsule, Nyx, was also carrying the remains of 160 people as part of a test by memorial spaceflight company Celestis. Probably the wildest story we’ve read this weekend…

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