Cannabis agency head out following bombshell report

Gov. Kathy Hochul’s audit of the Office of Cannabis Management resulted in a shakeup in leadership and a change of operations for the embattled agency. She announced Friday that the time had come for the embattled agency to move out of its startup phase, and said that state Office of General Services Commissioner Jeanette Moy’s report on the agency had shed light on inefficiencies, opaque procedures and a lacking accountability within the Office of Cannabis Management.

“Today is not about pointing fingers,” Hochul said. “It's about pointing OCM in a new direction and implementing solutions that work for everyone, from New Yorkers eager to open their own legal shops, to growers who waited too long for market for their harvest, to the New Yorkers who are sick and tired of the unlicensed retailers who have taken over their neighborhoods.” 

Hochul’s remarks Friday didn’t single anyone out for the agency’s legal and regulatory missteps, but Office of Cannabis Management Executive Director Chris Alexander will leave in September, and the office’s Chief Equity Officer Damian Fagon is expected to be removed from his post following a formal investigation into his conduct.

While Fagon has come under fire for questionable interactions with license applicants, Alexander has his defenders.

“No cannabis law in the nation is as thoughtful or ambitious as New York’s law, authored by the brilliant young attorney Chris Alexander, whose vision was unfortunately not backed by resources and experience to realize the goals of this reparations-through-capitalism experiment, the successful pursuit of which should not be abandoned,” a former state business regulatory official said.

But others, like the long-suffering cannabis farmers who have struggled to find placement for their wares, were pleased with the move. 

"Today the governor took some long overdue steps to right the state's cannabis market. And although we applaud these efforts, we remain concerned that absent relief for cultivators, cannabis farmers will be unable to enjoy this progress,” said Cannabis Farmers Alliance President Joseph Calderone. “We look forward to working with the governor in implementing her much needed reforms."

Under Alexander’s leadership, the Office of Cannabis Management has been beset by endless litigation that has compounded issues with processing licenses and roadblocks to crack down on competition from the illegal market. Moy’s report describes a nebulous web of operations within the agency that lacks centralization beyond Alexander, leading to chronic inefficiencies and a lack of oversight. 

“There is no clear, single line of sight or accountability for all activities needed to open an adult-use cannabis retail business below the Executive Director,” the report said. 

The Dormitory Authority of the State of New York received little scrutiny in the report, despite its questionable management of the Office of Cannabis Management’s social equity fund, which is meant to kick start new dispensaries, and its reliance on private equity funding. 

Moy told reporters that the focus and intent of the report was to reduce the license bottleneck that the agency faced. She said that following her review of the Office of Cannabis Management, there are plans to streamline the way that the office handles data and to increase the staff headcount to get more licenses approved. 

After passing new enforcement measures for illegal pot shops in the state budget and shaking up Office of Cannabis Management’s leadership and operations, Hochul appeared confident that the cannabis industry would right itself. 

“We know it can and do so equitably, efficiently and effectively,” she said.