Since recreational cannabis was legalized in New York in March 2021, the state regulators have so far awarded 36 retail dispensary licenses.
New York state cannabis agency gave priority to people who have been harmed by the war on drugs and nonprofits that assist those with histories of cannabis-related arrests or incarceration. The process hasn’t always been smooth. Unlicensed sellers have been operating in legal gray areas, creating stiff competition for shops recently approved by the state. The rollout has been slow, and a court case that temporarily barred a batch of licenses has created more confusion.
How have cannabis regulations in New York unfolded?
The Times’s Ashley Southall is tracking the cannabis industry and its regulations as it tries to find its footing. Ms. Southall, who covered policing for The Times for six years (and was the police bureau chief for two of them), pushed for months to dedicate a beat to cannabis. This September, she began covering the subject full-time as the city cannabis correspondent and has since reported on the scramble for licenses, their distribution and the challenges local retailers continue to face.
In an interview, Ms. Southall discussed the difficulties, successes and realities of the nascent industry. This interview has been edited.
Were those the issues that motivated you to take on the cannabis beat?
The problem with cannabis is that there hasn’t been a lot of regulation. When it was legalized in March 2021, the Legislature and Andrew Cuomo were in a squabble for six months over who was going to lead the new cannabis agency. It wasn’t until he resigned that Kathy Hochul was appointed the leadership.
So now you’re in September and October 2021 and you’re building an agency from scratch. Although cannabis sales were the most anticipated part, it’s the last in a long line of the regulatory formation. That was part of the frustration. The regulations are still in draft mode. But at the same time, those conversations also set the expectation that it’s legal. That demand being left unmet, officially, propels the rise of these unlicensed shops.
Do you find it tricky to keep track of the nuances of the regulations?
It’s not unlike the fall of alcohol prohibition — a historic moment that deserves its own chronicling. I covered policing and saw many arrests for cannabis, mainly of Black or Latino people; they helped build the underground industry in New York that the state is now trying to absorb. One of my goals is to chronicle that history.
One thing that’s unique about New York is that equity is written into the law. And the state has a goal of making sure that 50 percent of licenses go to people harmed by the drug war, women, distressed farmers, veterans — all populations who face significant obstacles in accessing capital and real estate. The whole equity provision is controversial because it lumps a lot of groups together who have different political needs.
Coming from the cops beat — an established industry with many laws — I think it’s a lot easier. I find cannabis to be an easier monster to wrangle just because it’s new cannabis. There’s really only one law that I had to read:
The Marijuana Regulation and Taxation Act, establishes not just what’s legal, broadly, how this is going to work. That’s something that I can print out and put on my desk. Because the rules are still being set, there are still regulations coming down that need to be parsed.
The challenge with cannabis is that it’s a state program. The growers are mostly upstate; the manufacturers can be pretty much anywhere, and there will be sales anywhere. Although it’s New York City-based, there’s still a significant portion of the industry that’s outside of the city — people who have been engaged in an activity that was criminalized for decades. A lot of people aren’t sure if they want to come out of what they call the legacy market into the legal market. There’s a very deliberate effort to incorporate social equity into the regulations and the machinations of the cannabis system.
“Just as the Empire State is poised to achieve that significant goal,” the industry association said in the report, “new illicit operators have sprung up, latching on to the coattails of the respected pre-existing legacy market and threatening both public health and safety and the long-term success of legal operators.”
Medical dispensary operators have long expressed frustration about being shut out of New York’s retail market while illicit storefronts operated without regulation and with impunity.
The report amounts to an attempt to add pressure to the authorities to curtail illicit sales as the medical industry seeks changes to proposed regulations that would require them to pay a minimum of $3 million to enter the retail market.
Does that effort seem sincere?
It depends on the person. The executive director of the state’s Office of Cannabis Management, Chris Alexander, was one of the architects of legalization and helped lead the push in New York. And now he’s one of the top bureaucrats leading the process to turn activism into law — an executed plan for social equity that they hope will become a model across the country. Activism is very different from lawmaking. Their agency is still staffing up. They don’t have a general counsel to advise them on legal matters, and that’s going to be a huge issue for any agency. It’s very risky. Where passion meets competence is where the rubber hits the road.
What does your work look like going forward?
My focus is the city. Of course, I will be looking at the state because it is a statewide program. For the most part, though, the part of the war on drugs that focused on marijuana in New York played out overwhelmingly in the city. The problem with the unlicensed stores is a statewide problem, but it’s particularly acute in the city because this is where the market is. That’s an example of taking a statewide story and really focusing on an impacted place — and that will always be New York City.