Off to the Cannabis Recreational-Use “Races” in the New York/New Jersey Region

Sep 3, 2021 | Firm News
Partner

In our most recent cannabis law blog, we highlighted New Jersey leapfrogging over New York in the “race” to establish a functional legal market for the recreational use of marijuana by its adoption of initial (but significant) rules to govern the cultivation, distribution, and sale of personal-use marijuana within the state, effective as of August 19, 2021. Meanwhile, New York had not even appointed members to its own cannabis oversight bodies, the Cannabis Control Board (“CCB”) and the Office of Cannabis Management (“OCM”), much less generated the anticipated regulations necessary to trigger what is expected to be one of the largest legal recreational-use markets in the country. (See here)

Former Governor Andrew Cuomo simply had not made the requisite CCB and OCM appointments a priority, and they still languished six months after he had signed into law the Marijuana Regulation and Taxation Act (“MRTA”). There were several theories speculated as to why Governor Cuomo failed to name appointees to these critical regulatory bodies, but suffice to say, the positions remained unfilled as he stepped down from his governorship as of August 24, 2021.

As we noted previously, there appeared to be “cautious optimism” that the incoming Governor Kathy Hochul “would be more receptive to filling the CCB’s chairperson position” and would make sure that the CCB and OCM would finally be up and running. It turns out that such optimism was well-placed. Within a day of her ascendancy, Governor Hochul’s spokesperson, Jordan Bennett, stated that, “Nominating and confirming individuals with diverse experiences and subject matter expertise, who are representative of communities from across the state, to the [CBC] is a priority of Governor Hochul.”

Shortly thereafter, Governor Hochul summoned New York lawmakers back to Albany for an “extraordinary” special session this week to address several initial matters she deemed critical as she settles in as Governor, and her short agenda included the anticipated naming of her appointees as the chairperson of the CBC and executive director of the OCM. Given all of the potential issues that Governor Hochul could have made a priority as she launches her governorship, the fact that these appointments made her short special session agenda should be some indication of the significance of legalized cannabis for the new administration.

True to her word, Governor Hochul has now announced her nominees to head the CCB and the OCM. Pursuant to the MRTA, she is also expected to name 2 other nominees to the 5-member CCB, with each of the two state legislative houses naming the remaining 2 additional members.

Governor Hochul nominated former state assemblywoman Tremaine Wright to be the chair of the CCB and the state Senate confirmed that appointment this past Wednesday. Wright is an African American, a native New Yorker, and a second-generation Bedford Stuyvesant resident. She is a graduate of Duke University and the University of Chicago Law School who practiced law both for public legal services and notable private law firms. Wright has also been a small business owner as well as a community activist who historically has supported cannabis legalization, particularly from a social equity and criminal justice reform standpoint.

During the state legislature’s special session this week, Chairperson Wright stated that her initial focus would be in getting the CBC up and running, especially as the additional members are appointed, and ensuring the OCM is adequately staffed as it moves towards regulating the state’s recreational, medical, and hemp cannabis markets. She also expressed her desire to assure the development of an “equitable cannabis industry” in the state. As chair of the CBC, Wright will play a critical role in the development of regulations for the licensing, cultivation, manufacturing, packaging, and sale of cannabis and its products throughout New York State. In doing so, she will undoubtedly work closely with the OCM’s executive director.

As to the latter, Governor Hochul also nominated, as confirmed by the state Senate this week too, Chris Alexander to be the executive director of the OCM. Alexander is also an African American and native New Yorker who is a graduate of Syracuse University and the City University of New York School of Law. He previously was a policy coordinator for the Drug Policy Alliance, which is a nonprofit organization focused on, among other issues, U.S. drug reform and marijuana legalization, regulation, and decriminalization. He was also involved in the creation of the MRTA, which legalized adult-use cannabis in New York, which should clearly facilitate the drafting of corresponding state rules and regulations.

Most recently, Director Alexander has been the government relations and policy manager for Vill LLC, a multi-state cannabis company based in Canada. As such, he has been exposed to and involved with both the legislative and business sides of the cannabis industry. As executive director of the OCM, Director Alexander will have the responsibility of working with the 5-member CBC in establishing cannabis licensing, cultivation, distribution, and sales regulations within New York State and coordinating the corresponding rollout of the adult-use cannabis market. Alexander will also have oversight powers over New York’s medical-use and hemp markets.

The nomination of these two individuals with social policy backgrounds to these key positions in New York’s cannabis programs speaks volumes about Governor Hochul’s equal priorities for these programs.

As Kassandra Frederique, Executive Director of the Drug Policy Alliance, has stated about these new appointments: “New Yorkers have been clear that cannabis is a critical criminal justice issue and that the communities that have been most impacted should have a critical role in governing the new market and the larger regulatory institution, which historically has not been the case in other states that have legalized cannabis. By moving swiftly to establish the adult use cannabis program after delays under her predecessor and nominating leaders who have long been involved in the fight for marijuana justice in New York, Governor Hochul is sending a strong signal that the landmark racial and economic justice provisions we fought so hard for in the Marijuana Regulation and Taxation Act will be taken seriously and implemented accordingly.”

Frederique also said, “[Alexander and Wright] both understand the deep harm criminalization has caused to individuals and communities – especially communities of color – across the state. Their past work has reflected a commitment to working with people who have been directly impacted by prohibition and demonstrated a belief in evidence-based policies that center on equity and justice.”

Of course, the appointments of Wright and Alexander are but first steps in the execution of the MRTA and establishment of a legalized recreational-use cannabis market in New York. The additional members of the CCB must be identified and appointed. The OCM needs to be staffed. The critical rules and regulations must be drafted and adopted. There are a myriad of other steps and tasks to be taken. But after six months of seemingly complete inaction in New York in moving the MRTA forward and given the new Governor’s expressed priority towards immediately reversing that trend, the cautious optimist has to feel better that things are finally moving in a more positive direction and that New York is back in the race for establishing a significant recreational-use market. Possibly, just possibly, licensing will begin next year, and the new crops will be planted in 2022.

Barton LLP maintains an interdisciplinary approach to providing answers and advice pertinent to the cannabis industry and its related laws, rules, and regulations. Should you have any questions or require additional information about any of the above or generally with respect to cannabis legalization, please contact Eric W. Sleeper or Christopher J. McNamara.