Hochul finally calls for overhaul of NY’s botched legalized pot program: ‘What took her so long?’

Gov. Kathy Hochul has finally called for an overhaul of the state agency overseeing New York’s cannabis industry after even she admitted its roll-out was a “disaster.’

The move — fueled by a top-to-bottom review of the state Office of Cannabis Management that began Monday — came as a key New York weed regulator was placed on leave after being accused of retaliation by a pot supplier for her criticism of the program.

Hochul tapped her Office of General Services Commissioner Jeanette Moy to conduct the 30-day examination of the program to try to streamline its licensing operation and the opening of new pot stores — a directive seen in and outside the weed industry as a belated attempt to stem a full-blown crisis occurring on the governor’s watch.

Gov. Kathy Hochul has called for an overhaul of the state’s embattled Office of Cannabis Management. Office of Governor Kathy Hochul/Flickr
Gov. Kathy Hochul has called for an overhaul of the state’s embattled Office of Cannabis Management. Office of Governor Kathy Hochul/Flickr

“What took Hochul so long? It’s hard to imagine something worse than we have right now — it’s a major blunder,” said Queens City Councilman Robert Holden, who is fighting to close unlicensed pot shops in the heart of his district, Metropolitan Avenue in Middle Village, to The Post.

A new legal pot shop that just opened on Metropolitan Avenue, The Cannabis Place, is currently surrounded by six unlicensed shops within a few blocks’ radius, said company CEO Osbert Orduna, who previously operated a delivery shop at another location.

State Sen. George Borrello (R-Jamestown) called the state’s legalized-marijuana program an “abject failure.

“From the beginning, it was a failure of identity politics  — of giving people with pot convictions preferences for licenses over law-abiding citizens,” Borrello said.

That same lenient ideology also allowed unlicensed pot shops to sprout up like weeds unchecked before the legal market could take hold — and it’s high time Democrats in charge snap out of their daze and do something, he said.

The New York City Sheriff’s Office raiding an illegal marijuana shop in Queens on March 5, 2024. Council Member Robert Holden
The New York City Sheriff’s Office raiding an illegal marijuana shop in Queens on March 5, 2024. Council Member Robert Holden

“Nothing is going to change until Democrats in Albany get a spine and pass a law to put illegal pot operators in prison,” Borrello said.

Hochul on Monday promised a turnaround.

“Today, we take the first step in revamping New York’s legal cannabis industry to ensure its long-term success,” the governor said.

“I have full confidence in Commissioner Moy’s ability to identify areas that need improvement, establish standards and processes across agencies, and jumpstart the next phase of New York’s legal cannabis market.

As news of the shake-up surfaced, Damian Fagon, OCM’s social-equity director, was placed on leave after Jennie Argie, owner of upstate cannabis edibles supplier “Jenny Loves Me,” claimed he was behind state regulators closing her business in retaliation over criticism.

“As a regulatory body, we take questions about the integrity of our systems seriously. To ensure a transparent, thorough investigation into the allegations made, the Office placed Mr. Fagon on leave,” said OCM Executive Director Chris Alexander.

The problems with the state’s budding cannabis program are deep-seated, and some of them self-inflicted:

  • There are 83 licensed operators to sell cannabis in the Empire State, 38 of which are in New York City.

But city Sheriff Anthony Miranda and Mayor Eric Adams estimated up to 2,000 stores are illegally selling cannabis.

Damian Fagon, OCM’s social-equity director, was placed on leave. Photo by Michael M. Santiago/Getty Images
Damian Fagon, OCM’s social-equity director, was placed on leave. Photo by Michael M. Santiago/Getty Images

State lawmakers failed to approve measures to address the black market when they legalized the sale of marijuana in 2021.

Hochul is pushing the legislature to pass her proposal that would give local authorities more power to shut down unlicensed shops.

In its budget bill, the state Senate recommended a staggering $126 million bail-out to prevent farms from going belly up, while the Assembly proposed $80 million to keep cannabis suppliers afloat until the market builds out.

  • Frustrated applicants have complained of waiting two years to obtain a license.

Orduna, The Cannabis Place CEO, said cracking down on the black market is the most pressing issue that Albany needs to address.

“This is what the governor has proposed. The ball is in the legislature’s court,” Orduna said.