New York's Cannabis Program Cleared To Launch, But One Expert Says It's Back To The Drawing Board

Tuesday’s unanimous approval of rules and regulations that will oversee the rollout of New York’s severely delayed cannabis program was met with relief as the Cannabis Control Board board members passed the regulatory package without debate.

“I know that today is a day of mixed emotions for many who are excited to see the market launch,” said Chris Alexander, executive director of the Office of Cannabis Management (OCM). “There are additional items that we will continue to fine-tune, as it relates to the regulations.”

Additional items that need fine-tuning?

Practically since recreational cannabis became legal in New York, the program has been besieged by numerous lawsuits related to one of the program's major tenets that enables social equity applicants, or those who have been affected by the war on drugs, to be moved to the front of the line for licenses to operate retail shops. While a noble cause, the social equity program has moved at a snail’s pace and is viewed by just about everyone involved as inefficiently executed, hence the lawsuits.

See also: New York Expands Cannabis Licensing After Legal Delays And Tug Of War Between David And Goliath

Todd Harrison, founding partner and CIO at the cannabinoid-focused investment firm CB1 Capital told Benzinga founder Jason Raznick on The Raz Report that New York went about the situation the wrong way.

“I think they went to war with the MSOs”, Harrison said, referring to multistate operators that have been functioning in NY as medical marijuana providers for several years. 

Indeed, numerous attendees at Tuesday’s open cannabis control board meeting insisted that MSOs should not be allowed to enter the market until 2025. They argued that these large marijuana companies would be competing with social equity retail shops of which less than two dozen have opened since recreational sales launched in December 2022.

Harrison says MSOs are not necessarily big businesses.

“They are the entrepreneurs who have done it better than others to get to this point. We used to celebrate those kinds of people in America, not disparage them,” he said adding that there is a big difference between criminal justice and social justice.

“I don’t think people should be in prison for a plant but I don’t necessarily think those same people should be at the front of the line...especially for a metropolis like New York where you have companies that have been spending years and millions of dollars building toward that day so they can get safe, regulated products at scale, so the marketplace can generate tax revenue.” 

Harrison pointed to states like Missouri and Maryland where existing cannabis companies made the switch to adult-use retail shops thus keeping illicit weed vendors at bay. In New York, tens of thousands of illicit shops openly sell cannabis, especially in NYC, noted Raznick to which Harrison replied.

“Most New Yorkers think that is the legal framework because they see them on every corner,” said Harrison who concluded that New York essentially needs to go back to the drawing board. “They might have to start over And that’s not going to be good for anybody.”

No doubt we'll be talking about New York, which is expected to generate billions when its legal program is up and running. And you'll also get a chance to meet Todd Harrison at the Benzinga Cannabis Capital Conference in Chicago on September 27-28. All information is available on bzcannabis.com

Watch the full episode.