NY cannabis director out as Hochul announces ‘overhaul’ of troubled office

ney cannabis ocm chris alexander

*This article first appeared on TimesUnion.com

Chris Alexander, the executive director of the state Office of Cannabis Management, has been asked by Gov. Kathy Hochul’s administration to step down following a review of his handling of the troubled rollout of New York’s retail marijuana industry.

Alexander, who as a state Senate counsel had helped write the legislation legalizing marijuana, is expected to stay through Sept. 1, when his term as executive director would have been up for renewal.

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His impending departure comes as the governor announced Friday afternoon that a month-long review that she had directed Jeanette Moy, commissioner of the state Office of General Services, to conduct of the cannabis agency’s operations had revealed widespread problems that will lead to an “overhaul” of the embattled agency.

“We’re going to transform OCM itself. It’s past time for OCM to move from a startup mode into a fully operational regulatory agency,” Hochul said, after invoking the story of a cannabis applicant, who is a Latino and military veteran, who has spent more than $40,000 in six months trying to obtain a cannabis license but could receive no information from the Office of Cannabis Management — a common complaint.

“Today is not about pointing fingers, it’s about pointing OCM in a new direction,” the governor said. “We’re going to prioritize hiring and training new staff capable (of handling) key agency operations.”

The governor said the overhaul of the troubled cannabis office will include improving communications with stakeholders.

“We’re going to produce regulatory bulletins to inform the public of policy changes and hold statewide listening sessions to understand even more ways to improve,” Hochul added.

Alexander’s tenure as the head of the newly formed Office of Cannabis Management has been rocky from the start. A mountain of litigation, regulatory missteps, allegations of favoritism for some retail industry applicants and repeated missed deadlines all have overshadowed the rollout of an industry that — more than three years after marijuana was legalized — has seen just more than 120 retail shops open across the state.

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Earlier this year, the top equity official at the state Office of Cannabis Management was placed on administrative leave following allegations of improper retaliation against a Hudson Valley cannabis processor. Damian Fagon, who was appointed as the state cannabis agency’s chief equity officer in 2022, was placed on leave pending an investigation into the allegations that remains ongoing.

“As a regulatory body, we take questions about the integrity of our systems seriously,” Alexander said. “To ensure a transparent, thorough investigation into the allegations made, the Office placed Mr. Fagon on leave. We remain committed to building a sustainable, equitable cannabis market and protecting our integrity and credibility during such a pivotal moment for our market.”

The rollout has been further harmed by the proliferation of illicit marijuana shops that have exploded across the state. They have been fueled, in part, by the lawmakers’ decision to immediately legalize marijuana possession when the law was passed in April 2021 — long before the retail market would begin taking shape. Many law enforcement agencies have been reluctant to target those shops or street sales because of the decriminalization of the drug and criticism that marijuana arrests for decades had unfairly impacted minority communities.

Some law enforcement officials had noted privately that state regulators were essentially asking them to prosecute their unregulated competitors.

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But some officials who left the Office of Cannabis Management have told the Times Union that the blame being placed on the illicit shops has been a red herring to distract from what they said has been mismanagement as well as questions some employees had raised about Alexander’s lack of experience in running a state agency — especially one that had to be built from the ground up.

Others, however, have support Alexander and the office’s leadership, casting blame at the Office of General Services for not more quickly filling vacant positions. They also alleged the Dormitory Authority of the State of New York, which had been tasked with finding and financing retail spaces for new shop owners, had bungled that role.

The Cannabis Control Board on Friday adopted updated regulations intended to strengthen enforcement efforts against the thousands of unlicensed shops. The new rules empower the Office of Cannabis Management to work with police agencies to seize illegal product, issue fines or close shops that are not in compliance.

Two years ago, more than 200 licensed cultivators grew cannabis in New York, and about 80 of those farms produced “significant” amounts of marijuana — roughly 300,000 pounds. Much of that crop has been rotting because there were not enough processors and retail shops to sell it.

Brendan J. Lyons