Chris Alexander On Building Gotham’s Legal Cannabis Market
As more legal operators open up shop, the head of the Office of Cannabis Management expects illicit retailers to go up in smoke.
Behind every legal cannabis shop opening in New York City stands one man: Chris Alexander.
The executive director of the Office of Cannabis Management (OCM), the state agency formed in 2021 to manage New York’s legal weed market, might be one of the city’s busiest public officials. On top of managing the opening of New York City’s first three legal dispensaries in the East Village and Greenwich Village, Alexander had his second child (a girl) in January.
Alexander, a native of Hollis, Queens, got his start in politics as an advocate, working at the Drug Policy Alliance (DPA). He’s stewarded the OCM since its creation, to date hiring roughly half of the 300 staffers the organization needs to support the city’s legal weed market as illicit shops abound.
The New York City Police Department, the New York City Sheriff’s Office and even the Manhattan District Attorney’s office have attempted to shut those illegal pot shops down, and they’ve had their hands full. Manhattan District Attorney Alvin Bragg sent 400 letters to illicit smoke shops in February alone, warning them it will instruct their landlords to kick them out.
As this has been happening, OCM has been working to clarify the regulations for legal retailers, approving 66 retail license permits and ensuring that those previously discriminated against during the war on drugs benefit from the nascent market. But progress has been slow, with only three shops open as of Feb. 21. The OCM allowed retailers to make marijuana deliveries in December in a bid to get sales moving faster, though no operator has used the model yet, according to an OCM spokesperson.
Still, Alexander is confident that as more legal shops open, the illegal market will be phased out. And while the system might seem slow to shoppers eager to get their hands on legal goods, Alexander is proud of OCM’s accomplishments in its first two years of existence.
This interview has been edited for length and clarity.
Commercial Observer: How did you get involved in cannabis advocacy?
Chris Alexander: I started in political organizing, running political campaigns at the state, local and federal levels. I decided I wanted to commit myself to issues as opposed to [candidates], and having come from where I came from — Southeast Queens, where there’s always been a strong police presence — it was an issue that I cared about a lot about as a young person. I came into contact with the Drug Policy Alliance [(DPA)] and was able to transition that passion project to full time.
I ended up going to the State Senate [as associate counsel] after my time with DPA to continue to work on the bill [the Marihuana Regulation and Taxation Act] and negotiate it during the Andrew Cuomo administration. We didn’t get very far, but the conversation started to occur. And so, I really took it on from the campaign to this seat.
How is the OCM doing in terms of staffing? Previously you planned to hire around 300 people, is that still the case?
We have been growing. We’re currently around 150 or 160 [employees]. This fiscal year we’ll grow to about 240 and then the following we’ll end up around the 300.
NYC’s third legal operator opened Monday Feb. 13. How do feel about the pace of the legal rollout of cannabis stores?
This is New York — nothing’s ever fast enough, and we know that. But we’re really thankful to have been able to spend this last year developing the rules of the road and getting quality operators in the space.
In a couple of months, as we continue to roll them out, we’ll forget about how long it took. Even though — I always like to point out — we have moved incredibly quickly. In [the past 12 months], we’ve done so much more than other states have done in their initial year of operation, in not just building the agency itself, but writing the rules of the road, as well as shaping our medical and public health programs and really changing the public dialogue as well.
We’ve launched two massive public education campaigns. We’ve been running all around the state talking about this program and what we’re doing so I think when you really put it all together, we’ve done a lot in this year. But yes, we could go faster and we’ll pick it up.
Do you have a goal for the number of operators you’d like to get up and running before the end of the year?
That’s really hard to say, [but] as we issue licenses, they’ll still have a year or so to do everything they need to do on their end to get up and running.
We obviously have our [Conditional Adult-Use Retail Dispensaries] CAURD licenses that are rolling. We’re going to be opening applications for additional licenses in the second half of 2023.
Why should New Yorkers buy legal weed? Will that market be able to compete with the illegal market?
They absolutely will be able to compete. What we’ve seen across the country is as we roll out a broader, more accessible program with more high-quality products that are safer, people will choose to transition from the illicit space into the regulated space. In terms of our campaign, and where we are focusing on, we’re trying to connect and make sure people understand the underlying mission behind what we’re doing. The operators that we’re putting in place as well as the dedication of revenue, and all these things that I think also make the market very attractive.
The illicit market, particularly in how it’s operating now, [the customer doesn’t] know where the product is coming from, where the revenue is going, [but] you know it’s not contributing to the communities in which it operates. So, conversely, you’re just not getting the same output from the unregulated market as you will be getting from the market that we’re building.
Speaking of the unregulated market, Eric Adams’ administration has cracked down on the illegal cannabis market through the NYPD, the Sheriff’s office and, most recently, by asking landlords to evict illegal operators. Do you think these efforts will be effective? How do you see the state’s role in protecting legal operators?
We’ve been seizing the products for the last several months. [We’ve been] effective at getting these products off the streets, but not effective at shutting these businesses down permanently.
Now, in terms of the additional action announced by the DA [on Feb. 7], I think it’s going to be effective as well, because the truth of the matter is, these folks are not operating in silos. There’s a landlord that owns that space that’s allowing them to be there. Even though we’re not necessarily targeting the landlords, I think coming to the landlords with some directive in terms of the action that must be taken due to the illicit business happening on their property is a necessary step.
We also are increasing our own capacity to take enforcement action. And I think that’s also important. We’ve been seizing products, but we have to take the next step in shutting these spaces down, and our law enforcement partners have to take the next step and make sure that folks aren’t selling products to minors, which remains a felony offense on the state penal law.
Does the OCM have a role in terms of penalizing illegal operators? You mentioned increasing your own capacity for enforcement.
As we have been hiring, we only have so many folks who can take on this activity. We’ve been needing enforcement across the state with our local partners, but again, we’re not hitting [the same] folks every day. And so we haven’t yet been able to do that, but we’re increasing our resources and the governor has given us some additional resources to do that. And I’m speaking specifically about employees.
Are there other solutions that you’re considering to shut down illegal operators? Is there any long term solution to fix this big illegal market?
We’re going to have the most success when we open up more stores.
When asked to choose between a store like Smacked, which is run by somebody who was formerly impacted by prohibition and enforcement, run as a family business that is dedicating its revenue back to the community in which they operate, versus, some corner bodega where it’s unclear where the product came from and who’s operating. We have to open more stores, as we’re committed to doing, we just have to pick it up in the next couple of months.
What do you think the greatest challenge to the OCM will be in 2023?
I mean, obviously, the illicit market is a significant one. But I think [a greater challenge] might be in making sure that the opportunities that we’re creating are ones that folks can take advantage of. That’s the goal, to make sure that we continue to really do what the law has dictated that we do, in creating the most equitable, accessible market in the country, as we open to new license types like a cooperative, like a micro-business — all these nuanced license types that we’ll have to have different approaches than what we did for CAURD or the seeding opportunity initiative that focused on small farmers. We have other individuals in our equity definition that have to be given access. Making sure we live up to that is the biggest challenge, but it’s something that I think we’re definitely ready for.
Are you concerned at all about what it will be like for social equity applicants once bigger players are allowed to apply for licenses?
New York has never been prohibitive in terms of our market. We’re not prohibitive towards big business. The big operators have a place in New York and the market that we’re building. They’re going to be here, right? So there’s going to be competition.
We’re not saying that our CAURD licenses don’t have to compete, we’re saying give them a chance to compete by not initially handing off the entire market to the most well-resourced and well-capitalized. So I want to turn that on its head because we’re going to have bigger operators. This is New York. It is the capital of the world and it’s going to be the capital of weed as well.
Everybody’s going to come, and we want them all to come. But we want them to be able to compete with the small businesses that were creating, the small brands that can be independent in New York, where otherwise in another state they may not have that ability, or the space to do so.
Speaking of space, the Dormitory Authority of the State of New York has been in charge of finding retail space for operators. Have any operators gone with a DASNY space?
We have a lot of locations that are in process working with the fund and the Dormitory Authority. We only have one open currently, which is Smacked on Bleecker Street. That was the second dispensary to open. But we have plenty of other folks who are in our licensing pipeline who are working with the fund in real time to either design and build out a location or who have already identified locations that’s already been preliminarily designed and is being built out currently. So there’s progress being made there.
Like the rest of the program, we’re doing something that’s never been done. This whole exercise has never been done. That could be moving faster as well in terms of the location-side, but I think the biggest thing is that we had a commitment as a state to provide support to operators. And that’s what we’re doing.
Do you see any risk of these operators being a target of crime as potentially lucrative businesses? A handful of illegal operators have been targeted in the last two years.
That’s also part of the nature of illicit activity generally, understanding that there’s oftentimes violence, crime, et cetera, around these illegal operations, but [historically legacy operators] have operated outside of a physical location. That’s historically how things have been. As they have now transitioned to the storefronts, they’re [experiencing] that in real time. What we’ve been warning all folks about is understanding that there’s a broader need outside of just the product to take action against some of these shops. There’s crime around these illicit operations that happens on the street that’s happening with these shops.
But in terms of our operations, there actually has been proven data and reports that where legal dispensaries open there’s less crime in that area. Now, I’m not saying that regulated business causes that exactly, but what I can say is that when you bring in operators who are from a community, who have a connection to a community, who are giving back to a community, a community can receive them differently.
When do you think the city will see the tax benefits of having a legal market, and how impactful do you expect the legal market to be in terms of tax revenues?
As you can see from the first couple of operations, the demand is high. That’s going to continue.
Right now, there’s a dedication of 40 percent of that revenue to what we call the Community Grants Reinvestment Fund. There’s additional revenue dedicated to public education and drug treatment. There’s going to be quite a bit of revenue to go around.
It’s hard to say exactly where the mature market lands because we’re really all over the place in terms of our estimates, but I think it’s going to be a $5 billion market so we can expect hundreds of millions dollars coming back to the community.
Is there anything else you want to add?
About the CAURD licenses — it’s not just the count that matters of how many we’re rolling out, but the quality of these folks is also important to point out. These folks have been impacted by prohibition, but these are also business owners. And I think that’s something that really makes this program unique. We’re prioritizing folks who’ve been impacted, but we’re also making sure our program is going to succeed through folks who already have the business acumen to be successful in a market like this.
Celia Young can be reached at firstname.lastname@example.org.