New York Gov. Kathy Hochul Calls Special Session to Make ‘Long Overdue’ Decisions For Cannabis Program
New York Gov. Kathy Hochul calls for a special session during a press conference Aug. 31.
New York Office of the Governor

New York Gov. Kathy Hochul Calls Special Session to Make ‘Long Overdue’ Decisions For Cannabis Program

The new governor will nominate Cannabis Control Board appointees when the state Legislature convenes at noon Sept. 1.

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September 1, 2021

It’s been five months since former New York Gov. Andrew Cuomo signed the Marijuana Regulation and Taxation Act (MRTA) but little headway has been made on adult-use cannabis legalization.

Kathy Hochul, who became New York’s first female governor last week—after Cuomo resigned following months of sexual harassment allegations—plans to change all that by jumpstarting the state’s legal cannabis market through nominating appointees to the state’s management office and control board.

During a press conference Tuesday evening, Gov. Hochul called for a special session of the New York Legislature to begin at noon Sept. 1. The session will deal with freeing up the state’s “long overdue” cannabis program, as well as addressing the state’s rent and eviction crisis, she said. It will also address the state’s Open Meetings Law to allow more access to meetings.

When Hochul was sworn into the governor’s office last week, she said one of her top priorities was to get rental relief to families in need. But she said Tuesday that getting the cannabis program up and running is also one of her first concerns.

“I also have an agenda item that’s very important to me and that is to jumpstart the long overdue decisions pertaining to establishing cannabis in the state of New York,” Hochul said. “I’ll be appointing my nominations to start the process to legally produce and distribute cannabis in the state of New York.”

Hochul is tasked with nominating an executive director for the new Office of Cannabis Management (OCM) and naming three appointees, including a chairperson, to the Cannabis Control Board (CCB).

“There is no reason why simple announcements in terms of who the executive director is and who the chairperson is were not done in time, but I’m going to make up for that lost time and I want those decisions made,” she said. “And I’ve made the decision as to who I want, but they need confirmation from the Legislature.”

The OCM is the day-to-day administration and enforcement arm of a comprehensive regulatory structure that was created to oversee medical cannabis, adult-use cannabis and cannabinoid hemp within the state. It was set up to be governed by the five-member CCB—in addition to the governor’s three appointees, the state Senate and Assembly reserve one appointment each.

But until that regulatory structure is developed, New York’s adult-use cannabis program is at a halt without the oversight for licensure, cultivation, production, distribution, sale and taxation.

Cuomo was expected to issue his nominees for OCM executive director and CCB chairperson in June but never did after locking horns with the Senate over his candidates. The Senate must confirm the governor’s appointments.

The five CCB members will be appointed to three-year terms and must be New York citizens and permanent residents, according to MRTA legislation text. While the chairperson will receive an annual salary appropriated by the Legislature, the remaining board members will be compensated at $260 per day when performing work of the board.

Although CCB members are prohibited from having any interest, whether direct or indirect, in any entity licensed by the OCM, the CCB chairperson will have clout to steer the industry, Harris Bricken Attorney Simon Malinowski wrote in June. A managing attorney for the law firm’s New York office, Malinowski helped establish the firm’s cannabis practice.

“With so much leeway in issuing the industry’s rules and regulations, the chairperson has the ability to really prioritize social and economic equity applicants, decrease the early head start that could be held by the existing ROs [registered organizations], and establish a sustainable licensing process,” Malinowski said. “The chairperson is also, technically, the individual who makes the preliminary determination as to whether a given license should be issued.”

Adult-use cannabis legalization in New York is projected to create more than 60,000 jobs and spur $3.5 billion in economic activity while generating an estimated $350 million in tax revenue once fully implemented.

Installing the regulatory structure is the next step toward realizing those impacts.