Legal Cannabis Latest

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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. This is the month that legal, recreational, adult-use cannabis sales are supposed to begin in New York State. Call it marijuana, call it weed, call it pot, call it cannabis, whatever, but actual legal sales of actual legal product are the latest development in a complicated rollout that began when the state legislature passed and Governor Andrew Cuomo signed a legalization bill back in March of last year. New York does seem to be leading the nation in giving cannabis business licenses to people who are adversely affected in the past by cannabis prohibition, though a very specific subset of those people.

We'll get into that a little bit. We'll ask how it's all going now, plus other developments, including contaminants like E. coli being found in some of the fake legal weed shops that seem to be popping up everywhere and what potential buyers can expect and when, all with the man who should know. Chris Alexander, executive director of the New York State Office of Cannabis Management, a job created for this new era. The New York Times also calls him one of the architects of legalization who helped lead the legalization push in the state. Director Alexander, thanks for coming on, and welcome to WNYC.

Chris Alexander: Thanks for having me.

Brian Lehrer: Just to let our listeners get to know you a little bit, what did you do before becoming executive director of the Office of Cannabis Management? What kind of a career path leads to a job like this that never existed before?

Chris Alexander: [chuckles] That's a great question. Prior to this, I spent some time working in and around the cannabis industry. Prior to that, I was counsel in the New York State Senate where I worked on issues of public protection, including our criminal justice reform issues as well as leading and advocating on cannabis reform. I've also spent a great deal of time in the political world and in the advocacy world working to end the war on drugs.

Brian Lehrer: What of the main steps, what have they been for you to get this new legal industry off the ground? The news hook that everybody knows, I guess, and that is the reason we're having you today is that dispensary licenses have now been handed out for Manhattan. Brooklyn's are tied up in court and there all the other places would go through that. What had to happen first? If they're going to have cannabis to sell, someone had to grow it in New York State, right?

Chris Alexander: That is true. We started this way back when in February when the governor announced the Seeding Opportunity Initiative, where she positioned small farmers in the state of New York to be the first to grow and cultivate adult-use cannabis. Way back when in February when that legislation passed the state legislature and was signed by the governor is really when we got this ball rolling.

I would say even before then, it really starts with the advocates who worked on creating a framework, for licensing a framework, for acknowledging the state's previous approaches to cannabis policy that gave us the tools really to prioritize small farmers and those who've been impacted. A lot of the programs and the ingenuity that we're seeing come from our regulators now is really stuff that came from the law that we're just putting into motion.

Brian Lehrer: The law is that all cannabis sold in New York has to be grown in New York. Is that because it's still federally illegal so you can't ship it across state lines?

Chris Alexander: That is absolutely correct. All current state programs have a similar restriction due to federal prohibition.

Brian Lehrer: Where's that happening? On farms upstate? In greenhouses? Do we have the climate for that in New York for a plant that got famous for coming from places like Mexico and Hawaii and Jamaica?

Chris Alexander: Yes, that was why the conditional cultivated legislation was so timely that gave folks a full growing season. It was taking place on farms all across the state as well as in greenhouses and hoop houses. We had a pretty robust cannabinoid hemp agribusiness market here, where we had folks participating and growing hemp for research and growing hemp for cannabinoid content to create CBD products. Those folks ended up being the first to grow adult-use cannabis in the state utilizing some of the same land. It really was grown across the state and the small farmers that did it did a pretty good job.

Brian Lehrer: Staying on the farms for just a second. I know you gave out the first dispensary licenses to people with priority, to people who've had past criminal exposure from the old marijuana laws, and also people with some business experience. Did this also apply to people in the growing sector in agriculture on the growing side?

Chris Alexander: No, the standards for the cultivation license was much more tied to previous participation in the hemp program and licensure with the New York State department of agri market. It is a bit of a different approach. What I will say is important about that program and about that legislation that authorized those cultivators to start was that it also included a mentorship component, where folks who did not have their own farms or had some horticultural experience but not necessarily positioned right now to have a cannabis business were given access to those small farmers, to their experiences, to really learn about compliance, right? We also are in process of getting ready to launch a compliance program that will provide some direction and will allow other folks to benefit off the experience of the small farmers who started this program just earlier this year.

Brian Lehrer: Listeners, your questions welcome here for Chris Alexander, executive director of the New York State Office of Cannabis Management with dispensaries going online this month. 212-433-WYNC, 212-433-9692, or you can tweet a question @BrianLehrer. How do you regulate safety and quality of the product? That would come under your office as well. I mentioned in the intro some of the fake legal stores that have gone online that are selling cannabis that does not come through this system being found recently in some samples to be contaminated.

I'm looking for example at a channel 7 headline here from yesterday. Marijuana Contaminated with Potentially Harmful Bacteria Allegedly Sold at 20 Unlicensed New York City Stores. These stories are talking about E. coli and other horrible things. How do we know that that won't happen in the legally-distributed product? Is it regulated in a way that the black market isn't?

Chris Alexander: First, I've got to push back, Brian, on the fake legal. These stores, these operations, they're all been selling illicit cannabis, all illegal operations doing so without the authorization of the state and are subject to the consequences from state and municipal governments. Not only does the regulatory framework-- one of the big pushes and reasons for legalization was acknowledging that we could get a safer product to consumers.

Not only controlling the environments in which these products are grown, determining which pesticides, for example, can be used, what type of production standards have to be in place for operators, but also on the back end, the testing, right? That's something that's incredibly important for consumers, folks who care about what they're putting into their bodies. One thing that we've been saying and I've been saying personally since I stepped into this role was that regulation really is a great step in the right direction for folks who care about what they're putting into their bodies.

As these legal operations have started to pop up and proliferate, the education that we've been doing not just to law enforcement but also to consumers, reminding them that these shops are not selling products that have gone through regulatory oversight. Oftentimes, these products are failed. Products have come from another state. We've been highlighting that as much as possible so that consumers are better aware of what they're putting into their bodies.

They're going to suffer and have been suffering the consequences of that decision to operate outside of the regulated market. Our testing standards and what we've had in place here for our medical market has been strong. What we're putting in place for our adult-use market will be equally strong. We're really frustrated with these operators and we have started to take broader action and seize quite a bit of product now. This is definitely an uphill battle here as we take on this really bad proliferation of illegal shops.

Brian Lehrer: Do you need cooperation of the local DAs? I asked one on the show the other day and the response was like, "Yes, we care, but there are other things that are more important." I'm wildly paraphrasing here and I don't want to put words in that DA's mouth, but there seemed to be so many of these stores that I wonder. I don't know if this has happened in all the other legal states because I haven't followed the other legal states, but I wonder if this is actually a threat to the profitability, the viability of the legal dispensaries that are going to pop up and be outnumbered.

Chris Alexander: One, we absolutely need coordination from all parties, right? Even though we pushed to end prohibition and the disproportion enforcement of cannabis laws in the state is something that I personally have fought many years to end, there is still a desire to protect what we're building. You mentioned that we're creating a first-in-nation program of creating opportunities for those who've been impacted. We can't do that without the cooperation of everybody involved.

I'm talking local governments, local law enforcement, as well as additional entities on the state level. What we've started to see already is that cooperation. Of course, there's much more action to be taken, but the partnership of the New York City Sheriff's Office, for example, who has authority over tobacco shops, for example, seizing product in partnership with our office has been a really beneficial engagement.

Really, it's a lot of education as I've been saying that has to start. That has to be the leading because folks are going to continue to buy product until they see reports like the one that came out acknowledging the harmful contaminants in those products. I do believe that while this is a threat to a legal, regulated market, it is difficult for a product that is inherently unsafe to compete with a more quality product that's going to be coming from our small farmers and our producers across the state.

There's always a proliferation of illegal activity. It's not always in the brick-and-mortar sense. Sometimes you get more delivery operations popping up in different states, but there's always some proliferation post-legalization. It's just that because of the unique layout of New York City, it's been particularly bad here. We are taking action and we're working with our partners and need further collaboration across the state to make sure we can do so effectively.

Brian Lehrer: Let's take a phone call. Again, if you're just joining us, my guest is Chris Alexander, executive director of the New York State Office of Cannabis Management, as the first dispensaries are supposed to open this month. Rich in Ithaca, you're on WNYC. Hi, Rich.

Rich: Hey, Ryan. I'm such a big fan. Thank you so much. A longtime listener, first-time question-asker. I have a question about the business side of the industry from a wine and spirit perspective. If you're a winery in New York State, you can sell directly to a retailer. If you're a winery from outside of the state or from another country, you have to sell through a distributor. I'm wondering if the cannabis industry has sorted out this because, for a long time, the distributors have been been trying to get into that side of the business to mirror what they do in cannabis with what they do with wine. I'm wondering where that is or where that's going. Thank you so much.

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Brian Lehrer: Thank you. Go ahead, Chris.

Chris Alexander: That was a great question. A lot of our approach to protecting smaller operators and creating opportunities for small operations is actually based on the alcohol model, where we have two tiers in our system here in New York. It is exactly a similar situation. If you are an in-state operator, particularly under the proposed micro-business license that we've rolled out in our recent regulatory package, you will be able to sell directly to a consumer.

If you are operating as a cultivator or a producer, you do have to move through proper channels and cannot have a direct ownership in a retail operation. We did set up a similar structure where you have to choose which side you're operating on. I did understand the question to also talk about the control that distributors have over the market. What's different about our market is that cultivators are also allowed to distribute their own products so that there won't be that same domination by the same distribution companies that exist in alcohol. It took a lot from alcohol, but also lessons learned from their experience as well.

Brian Lehrer: Interesting. Janet in Brooklyn, you're on WNYC. Hi, Janet.

Janet: Good morning. I have a question. Let's say there was a shop that I think is going to become a marijuana shop. How will I know if it's legal or not? Then there are stores that have been selling marijuana, but only medical marijuana. Will I now be able to walk into the store and buy product? Thank you.

Brian Lehrer: Thank you. Two great questions. With all these other stores selling marijuana, how can you tell a legal dispensary from an illegal dispensary?

Chris Alexander: Well, similar to alcohol and other regulated businesses, every licensed dispensary will have to have its proper authorizations publicized. We're also working up a unique identifier for our regulated licensed dispensaries to distinguish themselves. That'll be more public-facing. We're also going to be distinguishing the illicit shops. Those who we've come in contact with have told to cease and desist operations, have seized product from. Similar to notices that are put on the outside of non-compliant businesses.

They'll also be distinguished as well. On the medical side, we do have medical dispensaries currently operational in the state. I think we have about 38 right now. The medical operators and those dispensaries are going to be allowed to transition into the adult-use market and be able to sell adult-use cannabis products after some time, but the operators themselves will have to choose which of those dispensaries are able to transition into also being an adult-use business.

Brian Lehrer: It's not automatic?

Chris Alexander: It's not automatic, exactly.

Brian Lehrer: Talk to our listeners about the social justice component of who's getting the dispensary licenses because this, from everything I've been reading, is actually a New York State success story, whereas many other states that have legalized recreational adult cannabis sales have talked a good game on it and they never actually done it.

It's still this super narrow slice of the population where not only did you have to have a past certain kind of cannabis-related conviction, but you also have to be a successful business person already. I guess my question is, why was it drawn that narrowly? Why not people who've had the relevant past convictions but want to try their hand at business right now also being eligible?

Chris Alexander: I want to start with why we're different here in New York. It's actually something that interestingly enough is closely tied to the fact that our enforcement was so aggressive, right? Part of what became a guiding principle of the legislation, of the campaign associated, and of the legislators and advocates that were fighting to end prohibition was that there's got to be some recognition of what has happened here.

We've got these five priority groups identified in our law. Disabled vets, small farmers, people who live in communities that have been over-policed, minority and women-owned businesses, but also those who've been impacted themselves. This CAURD, Conditional Adult-Use Retail Dispensary, opportunity is just a tiny segment of the strategies that we're advancing to make sure that those groups are represented in a broader cannabis market.

By leaning into their previous business experience, really we're just identifying and acknowledging transparently that we weren't yet set up in a way to provide the necessary business support to make sure that these businesses are accessible. We have to lean into folks' previous experience. Now, every state that's tried to do this has taken some approach to provide resources or provide priority, but rarely do we see the follow-through and the combination of approach that we're putting forward here. It's not just identifying folks who've been impacted. It's not just making sure that there's representation. It's also making sure that they have the proper support.

By putting forward folks with already established business acumen but who also are in our impacted group, we're ensuring that the resources that they generate is going to be able to then cycle back into our program and fund opportunities and additional training for folks who may not have the business acumen or the business experience but also are similarly situated in terms of their experience with criminalization. It's all about just understanding that this is a continuing ongoing effort. I've been saying, it's a pithy line, but I really like it because it really explains our program. Equity is not a thing. It's the thing. It's a central core component of our law and it's what guides everything that we do here at the Office of Cannabis Management.

Brian Lehrer: Did you say an advantage to be given to anybody from an overpoliced community? Wouldn't that be five million people in New York City?

Chris Alexander: [chuckles] Exactly. When you said it's narrow, yes, a lot of people will be able to experience some form of priority based on the fact that their communities were overpoliced. It's one of the interesting approaches in the law to make sure that there's an acknowledgment that-- A prohibition had a broader impact than just on the individual who was incarcerated. It impacts an entire ecosystem, an entire local economy, so we're acknowledging all that and trying to create strategies to give opportunities to those folks who've been impacted in some way or another.

Brian Lehrer: That's really interesting. I didn't know all those pieces, so I'm glad you shared them. We're starting to run out of time, so just tell people who want to buy legally on a real practical basis what to expect now in the coming weeks. From what I've seen, the locations for the dispensaries have actually not been determined. These 36, if I have the number right, licenses you've handed out, including four in Manhattan and you could go through some of the other locations, but they actually don't have storefronts yet and this is going to start as a delivery service?

Chris Alexander: Yes, so with the authorization to have a dispensary, you're also allowed to deliver your products. Pre-ordered products are going to be delivered and so, essentially, yes. We are waiting for those locations to be finalized. Our partners over at DASNY have been driving that effort. They've been working around the clock trying to secure those locations and get them ready for operators.

That license that we're giving them, they have to complete some additional paperwork with us before being granted final licensure, but their provisional license has been given already. As we work with them, they will be able to conduct some initial delivery services while they wait for the dispensaries to be completed. Folks definitely should stay tuned with us at cannabis.ny.gov and follow our social media, @NYS_cannabis, for constant updates.

As soon as delivery comes online and we have our initial dispensary opened, we're definitely going to be blasting that out and making sure folks are able to frequent these businesses. Reminding folks, of course, that all tax revenue is going to really invest back into communities that have been impacted and to state education as well as the drug treatment and prevention across the state. It's really a full-circle program. We're really excited about getting these sales off the ground.

Brian Lehrer: At first, it's going to be like Grubhub for weed. You go online, you look at a menu of products, and you order from that, and then somebody comes in a car or on a scooter to your door?

Chris Alexander: Essentially, yes. [laughs]

Brian Lehrer: Just give us one word about this lawsuit because you couldn't give out any in Brooklyn yet and I think there's one other county. Tell us what the status of that is.

Chris Alexander: I don't want to go too much into litigation, but there were five regions that were enjoined. Western New York, Finger Lakes, Central New York, Brooklyn, and I think Mid-Hudson as well. We were enjoined by the court of giving licenses out in those areas. We have continued licensing in every other region and we'll continue to do so. We are waiting to hear back from the court on some things. Hopefully, we'll be able to advance the program and do believe that we've taken a really strong approach to make sure that people have an opportunity to participate. That's been our goal from the beginning, making sure that people have an actual opportunity. We're going to keep pushing along that line.

Brian Lehrer: Chris Alexander, executive director of the New York State Office of Cannabis Management. Thank you so much for joining us. We really appreciate it.

Chris Alexander: All right. Thank you, Brian.

 

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