Navigating the Regulatory Landscape: Updates from the Office of Cannabis Management
Introduction
The Office of Cannabis Management (OCM) stands at the forefront of regulating New York State's rapidly growing cannabis industry. Established under the Marijuana Regulation and Taxation Act, the OCM's primary role is to oversee the cultivation, distribution, and sale of cannabis products. This includes medical, adult-use, and cannabinoid hemp.
The office is committed to ensuring public health and safety, advocating for social and economic equity, and fostering responsible industry growth.
In this article, we delve into the latest regulatory updates from the OCM. These updates are crucial for understanding the evolving landscape of cannabis management. We will explore challenges New Yorkers face under the current Cannabis Laws and recent enforcement actions against illegal dispensary operations, highlighting the OCM's commitment to upholding legal standards.
Additionally, we'll examine broader updates that impact stakeholders across the industry. Our focus is to provide clear, concise information, making complex regulations accessible and understandable. Join us as we navigate these significant developments in New York's cannabis sector.
The Inception of the Office of Cannabis Management
The Office of Cannabis Management (OCM) was established as a central regulatory body following the enactment of the Marijuana Regulation and Taxation Act (MRTA) in March 2021 (1).
This marked a significant milestone in New York State's approach to cannabis, transitioning from prohibition to a regulated system. The creation of the OCM signified the state's commitment to managing cannabis use and sales through a structured and responsible framework.
Implementing the MRTA: The Role of the Office of Cannabis Management
The Office of Cannabis Management (OCM) plays a crucial role in bringing the Marijuana Regulation and Taxation Act (MRTA) to life in New York State.
As the regulatory authority, the OCM is responsible for translating the MRTA's legal framework into practical, enforceable policies and guidelines. This involves a range of activities, from issuing licenses to overseeing the safe and legal sale of cannabis products.
Recently, the OCM has been actively updating its regulatory strategies to ensure a balanced and effective cannabis market. A significant focus has been on curbing illegal dispensary operations.
By enforcing stringent compliance measures, the OCM aims to protect consumers and uphold the integrity of the legal cannabis market. These actions demonstrate the OCM's commitment to maintaining a safe and regulated environment for cannabis sales.
In addition to enforcement, the OCM is also involved in shaping policies that encourage social and economic equity in the cannabis industry. This includes creating opportunities for communities disproportionately affected by previous cannabis laws. The OCM's recent updates reflect a dedication to fairness and inclusivity in the industry.
Overall, the OCM's role in implementing the MRTA is pivotal. Through its recent initiatives and updates, the OCM is not only enforcing laws but also fostering a responsible, equitable, and thriving cannabis industry in New York State.
Recent Regulatory Updates from the OCM
Introduction of New Licensing Categories (2023)
In 2023, the OCM introduced new licensing categories, expanding opportunities for various stakeholders in the cannabis industry. This includes the addition of Processor Type 3 Brand license applications (2).
These new categories are part of the OCM's efforts to diversify the market and make it more inclusive.
Enhanced Public Health and Safety Regulations (Ongoing)
The OCM is consistently updating its public health and safety regulations. This includes setting standards for production, manufacturing, product testing, labeling, packaging, and advertising.
These measures ensure consumer safety and are part of the OCM's ongoing regulatory responsibilities.
Cannabis Growers Showcase (2023)
In 2023, the OCM hosted 141 Cannabis Grower showcase days across 43 cities and towns in New York State. This event, involving CAURD and AUCC Licensees, was a significant step in promoting safe, tested cannabis products and supporting licensed activities.
Adult-Use Cannabis Program Development (Ongoing)
The OCM is actively working on the development and refinement of the Adult-Use Cannabis Program. While no adult-use licenses have been issued to date, the OCM's efforts are geared towards establishing a safe and regulated market for adult-use cannabis.
These updates from the OCM demonstrate a dynamic approach to regulating New York's cannabis industry, with a focus on inclusivity, safety, and economic development. The OCM's actions reflect its commitment to adapting to the industry's evolving needs while upholding the principles of public health and social equity.
Strengthening Social and Economic Equity (Ongoing)
The OCM continues to strengthen its social and economic equity program. This initiative actively encourages participation from communities disproportionately impacted by previous cannabis prohibition policies.
The OCM's commitment to social justice is a continuous process, reflected in their ongoing policy updates and licensing strategies.
Social and Economic Equity
The SEE Program: A Milestone in Equity
On March 31, 2021, with the legalization of adult-use cannabis, New York State's Office of Cannabis Management (OCM) established the Social and Economic Equity (SEE) Program.
This program is a significant step towards rectifying the disproportionate impact of cannabis prohibition on certain communities. It aims to ensure fair treatment, access to opportunity, and advancement for all in the cannabis industry.
Extra Priority Criteria
The OCM has set specific criteria for granting extra priority to applicants. This includes being a member of a community disproportionately impacted by cannabis enforcement, having an income lower than 80% of the median income of the county of residence, and having a personal or family history of cannabis-related offenses prior to the MRTA's effective date.
The Cannabis Hub and Incubator Program (CHIP)
CHIP, an initiative of the OCM, supports SEE individuals in various aspects of the cannabis industry, from license pursuit to operational compliance and growth (3).
It includes the Application Technical Assistance Program, which collaborates with over 75 Technical Assistance Providers (TAPs) to aid SEE applicants. The OCM Academy, part of CHIP, focuses on educational and training support for licensees, with plans to evolve further in early 2024.
Public Health and Safety Measures
The Office of Cannabis Management (OCM) enforces strict health and safety regulations for cannabis products in New York State. These regulations ensure that all cannabis products meet high standards for quality and safety before they reach consumers (4).
This includes -
● Rigorous testing for contaminants
● Accurate labeling
● Secure packaging
The primary goal is to protect consumers from harmful substances and misleading information. By maintaining these standards, the OCM not only safeguards public health but also enhances consumer confidence in the legal cannabis market.
New Yorkers Face Hurdles Under Current Cannabis Laws
In New York, the public's struggle in the cannabis market is marked by the limited availability of legal dispensaries, with only 23 operational statewide (5). This scarcity forces many consumers to turn to the vast network of about 1,500 unlicensed retailers, where the safety and quality of cannabis products are uncertain.
The lack of accessible, regulated dispensaries not only hinders the public's ability to obtain safe, tested cannabis but also perpetuates reliance on the illegal market, posing significant health risks.
In January 2023, Western New York, particularly Buffalo, experienced significant delays in the rollout of its retail cannabis market. This situation, as reported a year ago, brought to light the challenges and frustrations faced by local communities, especially highlighted by Assembly Majority Leader Crystal Peoples-Stokes.
The delays were primarily due to a legal challenge that hindered the state Office of Cannabis Management from approving new cannabis retail locations in several regions, including Western New York. This legal bottleneck left many potential business owners in limbo, despite being ready and qualified to open retail stores. (6)
In Syracuse, New York, a significant crackdown on illegal cannabis sales led to the closure of five retail shops, including two near Syracuse University. This action, taken by state agencies, was due to violations of laws prohibiting the illegal sale of marijuana.
While the closure of illegal cannabis shops in Syracuse may be seen as a necessary step towards regulation, it raises concerns for some residents caught in the crossfire. Consumers accustomed to these local storefronts now face limited options, potentially forcing them to choose between traveling further for legal products or returning to the unregulated market (7). This raises anxieties about safety and accessibility, particularly for those who rely on cannabis for medical reasons.
Reflecting on this situation, it serves as a reminder of the complexities and challenges that can arise in the implementation of new regulatory frameworks, particularly in industries like cannabis retail. It underscores the importance of effective legal and bureaucratic processes to facilitate the growth of new markets while ensuring public safety and compliance.
OCM's Enforcement Action Against Illicit Cannabis Sales
In a decisive move to regulate the cannabis market, the New York State Office of Cannabis Management (OCM) announced a significant enforcement action.
On February 8, 2022, the OCM issued cease and desist letters to over two dozen businesses suspected of illegal cannabis sales, including those engaging in the practice of “gifting” cannabis. This action underscores the OCM's commitment to upholding the law and ensuring a safe, legal cannabis market.
The OCM's enforcement action targets businesses that have been exploiting loopholes in the law, particularly the practice of selling a product or service and including cannabis as a “gift.”
This practice, although creative, is illegal under the Marijuana Regulation and Taxation Act (MRTA). The letters sent by the OCM serve as a stern warning: cease these operations immediately or face substantial fines, potential criminal penalties, and the risk of being barred from obtaining a license in the legal market.
Cannabis Control Board Chair Tremaine Wright emphasized the OCM's obligation to protect New Yorkers and to build a regulated, equitable, and safe industry. Executive Director Chris Alexander highlighted the importance of these actions in building a legal market that ensures product safety and offers opportunities to communities most impacted by the over-criminalization of cannabis (8).
Enhancing Enforcement Powers
Governor Kathy Hochul Proposes Measures to Strengthen Efforts Against Unlicensed Cannabis Businesses
In her 2024 State of the State address, Governor Kathy Hochul unveiled a series of actions aimed at broadening the authority of the Office of Cannabis Management (OCM) and local government agencies to effectively shut down unlicensed cannabis businesses across New York. These measures come as part of ongoing efforts to combat illicit market activity and support the growth of New York's legal and equitable cannabis market (9).
Key Proposals:
Streamlining Padlocking Procedures: Governor Hochul proposes expanding the powers of the OCM to streamline the padlocking process for unlicensed cannabis shops.
Authorizing Local Governments: The proposals include authorizing local governments to execute OCM padlock orders swiftly, ensuring the closure of unlicensed dispensaries.
Establishing Local Registries: The plan involves establishing local registries of licensed cannabis businesses to empower local governments in padlocking unlicensed businesses through their own laws and resources.
Governor Hochul's Vision:
Governor Hochul emphasized the need to continue building the most equitable legal cannabis market in the nation while addressing the challenges posed by illegal operators. The focus is on protecting public health, ensuring community safety, and maintaining the integrity of the State's legal cannabis market.
“These proposals are part of our ongoing commitment to shutting down illegal cannabis stores once and for all, working collaboratively with local leaders to protect our communities,” Governor Hochul stated.
OCM's Perspective:
Executive Director Chris Alexander of the OCM expressed gratitude for Governor Hochul's commitment to expanding enforcement powers. He highlighted the importance of creating a market where law-abiding small businesses can compete and thanked the Governor for her dedication to getting it right.
Collaborative Enforcement:
Local governments, with existing powers, can seek closure orders, sue landlords, and arrest business owners for illegal cannabis sales. The new proposals aim to enhance collaboration between the OCM, local governments, and State agencies to effectively shut down illegal operators.
Recent Enforcement Success:
Throughout 2023, OCM and Department of Taxation and Finance inspectors seized over 11,800 pounds of illicit cannabis worth more than $57 million. Recent padlocking actions, such as the closure of Big Chief Smoke Shop, underscore the State's commitment to enforcing legislation signed with the FY 2024 Budget.
Penalties and Fines:
The enforcement legislation passed in May 2023 imposes fines starting at $10,000 per day for illegal cannabis sales, rising to $20,000 for egregious conduct. Additional fines and penalties under the Tax Law may apply, reinforcing the consequences for violating the law.
Multi-Agency Approach:
The Governor's approach involves collaborations with multiple State agencies, including the Department of Labor and the Workers Compensation Board, to ensure compliance with labor and workers compensation laws.
Governor Hochul's proposals represent a comprehensive effort to combat illicit cannabis sales, protect consumers, and fortify New York's legal cannabis market. As the State continues its journey toward an equitable and regulated cannabis industry, these measures play a crucial role in upholding the principles of public safety and market integrity. We anticipate these actions will contribute to the ongoing success of New York's evolving cannabis landscape.
Take Action Against Illegal Cannabis Operations
Do you have information about illegal cannabis sales or activities? Your report can make a difference in ensuring a safe and regulated cannabis market. Reach out directly to the Office of Cannabis Management (OCM) to report any illicit activities. Send your concerns and information to enforcement@ocm.ny.gov. Your vigilance helps uphold the law and protects public health and safety.
Conclusion: Anticipating the Future with the OCM
As we look ahead, the Office of Cannabis Management (OCM) is poised to continue its vital role in shaping New York's cannabis industry. The OCM's commitment to public health, safety, and social equity sets a strong foundation for future developments.
The journey of the OCM is an evolving story, one that reflects the changing attitudes and needs of society regarding cannabis. As stakeholders in this industry, whether as consumers, business owners, or simply engaged citizens, our participation and feedback are crucial. The OCM's future actions will likely be influenced by ongoing public and industry input, ensuring that the cannabis landscape in New York remains dynamic, fair, and forward-thinking.
What are your thoughts on New York's cannabis industry and OCM's role? Comment below to share your views and insights!
References
About. Office of Cannabis Management. https://cannabis.ny.gov/about-0
Licensing. Office of Cannabis Management. https://cannabis.ny.gov/licensing
Social and Economic Equity. Office of Cannabis Management. Accessed January 8, 2024. https://cannabis.ny.gov/social-and-economic-equity
Office of Cannabis Management. Office of Cannabis Management. https://cannabis.ny.gov/
Chalabi M. Tainted drugs and illegal shops: what’s going on with New York’s weed industry? The Guardian. https://www.theguardian.com/us-news/2023/sep/25/new-york-legal-cannabis-marijuana Published September 25, 2023.
Peoples-Stokes frustrated by cannabis retail delay in Western NY. spectrumlocalnews.com. https://spectrumlocalnews.com/nys/buffalo/politics/2023/01/12/peoples-stokes-frustrated-by-cannabis-retail-delay-in-wny
As state targets Syracuse shops for illegal cannabis sales, city shuts 5 businesses down. syracuse. Published September 26, 2023. https://www.syracuse.com/marijuana/2023/09/as-state-targets-syracuse-shops-for-illegal-cannabis-sales-city-shuts-5-businesses-down.html
Office of Cannabis Management Announces Enforcement Action. Office of Cannabis Management. https://cannabis.ny.gov/news/office-cannabis-management-announces-enforcement-action
Governor Hochul Proposes Legislation to Combat Illicit Cannabis Sales through Improved Enforcement. https://www.governor.ny.gov/news/governor-hochul-proposes-legislation-combat-illicit-cannabis-sales-through-improved
