New York Cannabis Leader Resigns Following Critical Internal Review

In a dramatic turn of events for New York’s cannabis industry, Chris Alexander, the Executive Director of the State’s Office of Cannabis Management (OCM) has resigned. This decision comes in the wake of a thorough examination of his oversight of the tumultuous rollout of New York’s adult-use cannabis market. Governor Hochul had previously announced that Alexander would step down at the end of his term in September 2024, but on May 24, Alexander resigned. He will leave his position on June 7, 2024.

Alexander’s involvement in shaping New York’s cannabis landscape stretches back to his days as state senate counsel, where he played a pivotal role in crafting the Marijuana Regulation and Taxation Act (MRTA) that ultimately led to the legalization of adult use cannabis in the state. Unfortunately, his transition to the role of Executive Director at the OCM has been riddled with challenges, including missed deadlines and alleged favoritism in the licensing process. 

In March, Governor Hochul ordered an audit of the OCM led by a task force coordinated by Commissioner of the Office of General Services, Jeanette Moy. The Governor’s announcement that Alexander would not be reappointed at the end of his term and his imminent departure coincides with the release of Moy’s report which reviewed the organizational structure of the OCM and ways to improve the licensing process. The task force identified systemic issues within the office, including inexperienced leadership as a contributing factor to the agency’s dysfunction.

One of the central issues brought to light in the report was the OCM’s neglect of social equity applicants. Despite investing significant resources and effort into securing cannabis licenses, many of these applicants found themselves sidelined by bureaucratic inefficiencies within the agency. In November 2023, four disabled veterans were awarded licenses in a settlement after they sued the OCM, alleging that they were wrongfully excluded from social equity licensure. Similarly, in January 2024, seven female-owned cannabis companies filed suit in an Article 78 action– a type of lawsuit that scrutinizes an agency’s regulatory procedures– arguing the OCM failed to inform applicants that specific social equity applicants (disabled veterans, people from certain locations, and distressed farmers) would receive three spots in the licensing queue. The plaintiffs’ attorneys stated that if their clients had been aware of this information beforehand, they might have opted not to apply in the first round. However, the lawsuit was disposed.

The report highlights an understaffed licensing team that has left certain applicants waiting nearly two years for status updates. In response, the report suggests doubling the number of staff members dedicated to licensing and creating a dashboard to display license statuses, rather than leaving applicants uncertain. Only 122 licensed adult-use dispensaries are currently operational throughout the state, despite the state receiving more than 6,900 applications between October and December 2023. Meanwhile, officials estimate that the number of illicit cannabis storefronts in New York City alone has reached 2,900. The report also revealed that 309 applications were rejected without notifying the applicants, leaving some in limbo for nearly two years – potentially paying to retain properties that will not be able to be used.

Governor Hochul has pledged a comprehensive overhaul of the OCM in an effort to address long standing concerns, including improving communication with stakeholders, expediting the hiring process for vacant positions, and ensuring fairness and transparency in the licensing process.

While some of Chris Alexander’s supporters claim he is being wrongfully scapegoated for the larger problems of the agency, his resignation marks a turning point in New York’s quest to establish an efficient regulated adult use cannabis industry. As the state grapples with the consequences of an admittedly weak rollout, Governor Hochul now seeks to rectify the mistakes of New York’s cannabis sector.

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