NY Cannabis Control Board Approves 100+ Licenses at Contentious Meeting

A somewhat stressed out but productive New York Cannabis Control Board held a monthly public meeting on Tuesday, July 10 – aka 7/10, a cannabis concentrates holiday – to address a full agenda of items that included over 100 applications for cannabis licenses seeking final approval, a list of applicant denials up for a vote, and a proposition proposed by the Office of Cannabis Management to begin the process to make necessary changes to packaging, labeling, marketing and advertising regulations for cannabis products.

The meeting, which started 30 minutes late, was held minus the attendance of the new interim Executive Director of the OCM but with a full quorum of board members under the direction of Board Chair Tremaine Wright, who conducted the meeting in the apparent spirit of getting it over and in the books as quickly and non-dramatically as possible. It was not to be. For reasons that were not obvious to even a regular observer, the meeting was punctuated by verbal jousts among members of the board that included a few tense exchanges and an accusation of personal defamation by one member to another.

The outbursts did not flare up into larger conflagrations thanks to the calmative influence of Chair Wright, but they clearly indicated that the recent scrutiny on the cannabis regulatory process and the changes to process and staff being made as a result have at the very least put undue pressure on the individual members of a program that has been mired in mistakes and subject to intense public scrutiny from the get-go.

That said, this meeting, like most of the CCB’s recent meetings, was productive in the sense that it not only continued to move the approval process for applicants in the right direction but began the process of improving the regulatory scheme for existing businesses by making much needed changes to existing prohibitions on advertising, labeling, and marketing that have hampered them as they compete with unlicensed businesses.

Interestingly, however, this tangible progress was combined with the Board’s failure to approve two resolutions up for a vote that would have finalized the official denials of CAURD and adult-use applicants that had not met the required thresholds. Despite the Board having previously voted to approve similar denials, this time Board member Adam Perry objected so strenuously that both propositions were shelved until a legal opinion can be obtained whether the CCB is required to vote on such matters. Considering the confusion over this matter, one wonders how these resolutions made it as far as an imminent vote, but it required Perry’s objections to bring it to light.

But that was not the Board member’s only issue, to be sure. One LinkedIn commenter said that Perry all but hijacked the meeting, which is a fair assessment considering the number of times Perry interrupted the flow to ask questions during the hearing – but the perturbed Board member through his questions seemed to be trying to drive the point home that the regulatory process is being unfairly maligned by critics both outside and within the CCB.

To that very point, he was fixated on the amount of time it takes to process an application from beginning to end, settling on 60 days, a number provided by CCB staff member Patrick McKeage during the hearing when pressed by Perry to specify an amount of time. At one point later in the meeting, Board member Jennifer Gilbert Jenkins asked Perry to stop using the 60-day metric, which she said was inaccurate, setting off as brief tiff between the two, yet another sign that divisions and disagreements simmer just beneath the surface of the regulating body, and they sometimes bubble to the surface.

Still, against that stressful backdrop, New York is seeing steady progress not just in approving licenses, but in approving licenses that are about as evenly distributed as any state can claim. As OCM Director of Policy John Kagia explained during his presentations on the progress the program has made, “53 percent of adult-use licenses across the supply chain are social and economic equity. This keeps us ahead of our statutory goal of 50 percent.”

Other numbers proffered during the meeting by OCM COO Patrick McKeage presented an operation that continues to finalize applications at a steady but increasing pace. “This is our sixth cohort of adult-use applications from the October 2023 application window, which closed on Dec. 23, 2023,” said McKeage of the list of adult-use applications before the Board for approval. “In this packet there are 109 applicants being considered for approval, 21 retail dispensaries, 23 micro-businesses, 23 cultivators, 20 distributors, and 22 processors. The office is also in the process of issuing an additional 12 provisional licenses that have been approved through that process.”

The resolution was approved unanimously and without comment or questions, but the following two resolutions denying certain CAURD and adult-use applications hit a snag in the name of Adam Perry.

As the Chair was calling the vote, he objected. “I have a comment on this resolution and the entire issue of denials before the vote,” said Perry. “My understanding from reading the statute is that the Board is not required to – nor is it empowered to – vote on denials, but only on recommendations for approval by the Office. I have asked for a legal opinion on that, and no one has been able to explain to me how the statute requires this to occur. So, I am objecting to the entire process of voting on denials, especially denials where we have situations where somebody has applied three times and we’re granting one of the application but not the others, or denials where applications have not been filed with the requisite fee or some other kinds of deficiencies.”

Chair Wright dealt swiftly with the matter and shut down the vote on the CAURD denials. “We’ll try to address that before our next meeting,” she said. “Motion to table the discussion was approved.”

Next motion to consider adult-use denials was not seconded, did not even get a vote, and was also tabled until a legal opinion can be secured. Why that opinion was not secured beforehand is perhaps the most salient question remaining.

The remainder of the meeting was mostly uneventful but for the update presentation on the progress of the OCM in terms of licensing and enforcement, which Kagia went to great lengths to claim was already a significant factor in improving economic performance for existing legal businesses and provided several slides to illustrate his contention.

Kagia also described in detail the changes being proposed by the OCM following months of deliberation to labeling, advertising, and marketing regulations for cannabis products. The changes, which are both small and large in scope, are solely intended to combat the ability of unlicensed stores to engage in visible advertising that legal shops have been prohibited from doing by loosening up the prohibitions.

The loosening now allows the use of billboards, but as Kagia explained in response to a question from Perry, billboards are considered separate from advertising, and will only be allowed as directionals. The thought was that rural legal shops need all the help they can get directing people to them rather than unlicensed stores. Therefore, billboards will be allowed, but they cannot contain normal advertising.

Specifically, the proposed language reads:

Only licensees authorized to conduct retail sales or delivery to consumers may use [advertise] outdoor [using] signs and billboards provided such signs:

(1) are informational only and for the purpose of alerting individuals to the name and/or location of a licensed retailer [dispensary] authorized to sell cannabis products to consumers, unless otherwise specified in this section;

(2) are limited to, at a maximum, the licensee’s logo and the following information:

(i) licensee’s name, entity name, or doing business as name;

(ii) dispensary address, if any, and licensee phone number, email address, and website URL; [and]

(iii) directions to [nature of] the business; and

(iv) the licensed activity;

(3) are not attractive to individuals under twenty-one as defined in subsection 128.1(c) [are affixed to a building or permanent structure];

(4) are not on vehicles, except for licensee’s vehicles that are required to contain certain identifying information in order to comply with other laws or regulations; [and]

(5) are in compliance with all federal, state, and local rules and regulations; [do not total more than two in number per licensed premises.

The hearing also included public in-person testimony from 18 individuals, but the audio provided for them was so poor that maybe one word out of ten was discernible. One only hopes the Board members could hear what they were saying. That said, and as contentiously productive as this meeting was, pressure on OCM/CCB to continue approving licenses and fighting the illicit market will certainly endure through the next meetings, in August and September, and until the queues are emptied and the New York market is running at full tilt.