Yesterday morning New York Governor Cuomo announced his resignation (which will take effect in 13 days), a week after a report from the New York State attorney general concluded that Governor Cuomo sexually harassed nearly a dozen women. Lieutenant Governor Kathy Hochul will then be sworn in as the first woman to hold the position of New York’s Governor.
Lt. Governor Hochul stepping in as New York’s governor should have an immediate and, in our view, positive impact on New York’s cannabis industry. We expect to see a lot of developments over the next two weeks, all of which we will be discussing during our upcoming webinar on August 17, 2021 with New York City Council Member Keith Powers (Register here!).
Before we get into the details, a brief refresher on the governor’s power pursuant to New York’s Marijuana Regulation and Taxation Act. New York’s cannabis industry (recreational, medical, and hemp) will be in the hands of the Cannabis Control Board, a governing body which we have been waiting to be formed since the MRTA was signed into law on March 31, 2021. The CCB will be responsible for all aspects of cannabis, including the allocation of licenses, licensing regulations and requirements, and general oversight of the industry.
The CCB will be comprised of a 5-member board, with the governor appointing three members and the Assembly and Senate each appointing one member. The CCB’s chairperson will be nominated by the Governor.
As we have previously noted, it is difficult to overstate the importance of the CCB’s chairperson. The chairperson will have an outsized influence on the direction of New York’s cannabis industry. With so much leeway in issuing the industry’s rules and regulations, the chairperson has the ability to actually prioritize social and economic equity applicants, decrease the early head start that could be held by the existing ROs, and establish a sustainable licensing process. The chairperson is also, technically, the individual who makes the preliminary determination as to whether a given license should be issued.
Which begs the question: why hasn’t (didn’t) Governor Cuomo nominated anyone for either the CCB or the Executive Director for the Office of Cannabis Management before the end of New York’s legislative session on June 10, 2021. The overwhelming sentiment is that Governor Cuomo’s expected choice of Norman Birnbaum for Executive Director of the OCM was not going to be approved by the legislature. So in typical fashion, Governor Cuomo took his toys and went home. Here at the Canna Law Blog, we believe that the only reason Governor Cuomo reached a compromise with New York’s legislature on the MRTA as quickly as he did was because he needed a political win during the various political controversies enmeshing him early in 2021.
So where does Lt. Governor Hochul ascension leave us? She has openly pushed for the legalization of adult-use cannabis in New York and emphasized its potential to generate “much-needed revenue for New York.” In public appearances, she has highlighted the importance of an effective social equity program. Crucially, she also hails from Buffalo and has been an ally of Assembly Woman Crystal Peoples-Stokes, one of the sponsors of the MRTA.
There is so much political capital to be gained by swiftly nominating a chairperson for the CCB and getting the ball rolling on New York’s adult-use licensing process that it would be surprising if Lt. Governor Hochul delayed the process. We will continue to keep tabs on news coming out of Albany and again remind you to tune in to our upcoming webinar for an in-depth discussion of the current state of New York’s cannabis industry.