NY Cannabis Head Chris Alexander Ousted as State Begins ‘Overhaul’ of Agency

However, a state review of the agency released Friday criticized OCM’s “relatively inexperienced” leadership for all the problems of the legalized cannabis market.

“There are deep-seated issues at OCM, issues that have limited its ability to fulfill its licensing role, a complicated application process for prospective business owners,” Hochul said in press briefing. “And unfortunately, this has overshadowed the excellent work done by hard-working OCM staff.”

But Alexander’s departure has left some of the agency’s staff disgruntled, including its former spokesperson, Aaron Ghitelman, who said OCM has become a scapegoat for the state’s cannabis failures.

“Gov. Hochul is looking for anybody she can point fingers at besides looking at the mirror,” said Ghitelman, who left OCM in March once the state review started. “We’ve heard her blame Andrew Cuomo. We’ve heard her blame the legislature. Now she’s blaming Chris Alexander, and at a certain point, she’s going to run out of people to blame besides herself.”

However, the state review found that OCM’s leadership had “limited depth” and the agency had four different units, instead of one centralized one, to handle reviewing licensing applications. OCM only had 33 of its 180 staffers tasked with overseeing licensing.

It also criticized OCM for creating “complex and obscure licensing requirements” for potential dispensary owners and “did not intend on reviewing all retail license applications it received,” despite collecting the fees.

It’s been a rough few years for cannabis entrepreneurs in New York, who have been bogged down by licensing delays, lawsuits and competition from a constantly growing illegal market. Hochul said she wants to get the state agency that oversees dispensary licensing out of “startup mode.” 

That means bringing the state police in to crack down on illegal smoke shops with a new task force to close “as many stores as possible” over the next 90 days. The plans build on legislation state lawmakers passed last month to allow police to padlock illicit stores.

As part of the changes, Hochul also said she would boost the number of OCM employees, something Ghitelman said was much needed.

There is one player the governor spared from the planned overhaul and that’s the Dormitory Authority of the State of New York (DASNY).

The semi-public agency oversees a $200 million seed fund backed by private investors that would have been the backbone of an ambitious social equity program lawmakers built into the cannabis law three years ago. DASNY said the fund would help cover startup costs for up to 150 dispensary licensees with a past cannabis conviction, helping them get in the door before the state opens the application to other entrepreneurs. 

But thus far, DASNY has carried out very few of its marching orders and the vast majority of licensees have declined the offer of assistance. By the time the first dispensary opened with DASNY’s help in July 2023, more than a year after the fund started, 14 others managed to open their doors on their own.

Meanwhile, Ghitleman said OCM attempted to flag DASNY’s lack of progress, but that went unheeded by the state.

“It wasn’t just that DASNY didn’t deliver what they promised. It’s that many feel that there is no path to profitability for the licensees who are placed in these build-outs,” Ghitelman said.

Despite complaints from cannabis operators, reports and OCM staffers, a spokesperson for Hochul told Commercial Observer there will be “no changes to DASNY.”

Abigail Nehring can be reached at anehring@commercialobserver.com.