State senators grilled top officials of the Office of Cannabis Management at a joint subcommittee hearing in Albany on Monday, honing in on the agency’s efforts to manage the proliferation of thousands of unlicensed shops across the state since legalization.
OCM executive director Chris Alexander acknowledged the severity of the problem in his opening remarks, but senators were still critical of how effective the agency’s efforts, pointing out that the agency had paused its own enforcement hearings, as first reported by THE CITY, while struggling to extract large fines from shops caught selling pot without a license, or to keep those stores closed following raids by state investigators.
“These are not just challenges, these are problems that need to be addressed and corrected,” said Sen. James Griffo (R-Rome).
Sen. Brad Hoylman-Sigal (D-Manhattan) rattled off a number of incidents involving illicit stores in his district on the west side of Manhattan including shootings and alleged sales to minors who attend nearby schools. “As much as this undermines the legal market — this is a public health issue, particularly for young people,” Hoylman-Sigal said.
“Absolutely,” Alexander agreed. “We want them closed as bad as you do. I’d love for a more efficient process.”
But despite that admission, there were few solutions offered from cannabis management officials over two hours of testimony. Sen. Liz Krueger (D-Manhattan), who also has a number of illegal shops in her district, questioned what it would take to actually deter shops from operating illegally.
While OCM now has the power to levy steep fines on any business that continues selling pot without a license after it’s been caught doing so, Alexander — who told community boards earlier this month that “It was never OCM’s mission to do this type of enforcement” — testified that he was skeptical those would help.
‘“Even at the $20,000-a-day limit, for some of these folks who own multiple operations across the city or state — it is still the cost of doing business at times,” said Alexander. “I don’t know what the exact number may be to fully deter.”
Still, the agency’s director of enforcement, Daniel Haughney, praised the efforts of the agency and its cooperation with the state Department of Tax and Finance (DTF) as well as local agencies.
“That cohesive enforcement mechanism between OCM and DTF has been instrumental to the success of what we’ve been able to do in the field so far,” said Haughney. “It’s an outstanding cooperation between agencies that is not something you see throughout the state very often.”
When one senator asked Haughney how many officers were involved in the raids, the enforcement director declined to answer, citing operational security.
In response to questions about the agency’s indefinite pause in enforcement hearings, Alexander said the move, which began without any public announcement, was intended to make OCM stronger.
“The pause really is recognition that we are still doing some fine-tuning of that process, working to make sure that we get the largest fines possible for the illicit operators,” Alexander told the subcommittee.
Outside the hearing, Alexander told a small group of reporters that he expected the enforcement hearings to restart in a matter of weeks, rather than months.
At the close of the testimony from the cannabis agency, Alexander told the subcommittee that it would take continued coordination to address the problem of unlicensed shops, pointing out the agency’s efforts to incentivize landlords to evict tenants who are selling pot without a license.
“This is an all-hands-on-deck problem,” said Alexander. “We need everybody participating in helping with this effort. This is not something that we ourselves will be able to shut down.”
