Cannabis Loyalty Programs, Discounts Could Soon Come to New York’s Legal Shops

At the New York Cannabis Control Board meeting on Wednesday, regulators were yet again criticized for application processing times and a lack of communication. 

At a high level, more legal stores are opening and more unlicensed cannabis sellers are being shuttered. Cannabis regulators celebrated the opening of the 150th legal shop. Meanwhile, the enforcement task force has shuttered roughly 150 unlicensed shops, which Board Chair Tremaine Wright called “a problem in so many communities.” 

The Board considered a handful of resolutions, including the approval of more than 100 adult use licenses.

Two distributors were pulled from the list of approvals, Patrick McKeage, the chief operating officer for the Office of Cannabis Management said, due to an “oversight” on the part of regulators. These applicants held previous approvals that would have presented a True Party of Interest violation if they were again approved. 

When it came time to approve a resolution laying out some denials, regulators hit a wall.  

Board member Adam Perry questioned whether the Board should be voting on denials at all and asked for a legal opinion. There was then a unanimous motion to table until legal counsel could chime in. The next resolution, which also dealt with denials, was also tabled. 

Wright said she would “follow up with counsel to get an opinion.”

“Maybe we do need to self-correct,” she said, adding that she hoped to have an update by the next meeting. 

Another resolution dealt with how the Board will respond to municipalities and community boards who provide them with an opinion on applicants within their municipality. They plan to start by responding to the “positive” opinions, and move to “negative” opinions after the next meeting. So far, the Board has received roughly 50 “negative” responses from municipalities for licensees that they’ve ultimately approved, McKeage said. 

John Kagia, OCM’s director of policy, talked about the resolution that included proposed revised regulations for packaging, labeling, marketing and advertising. These changes will open the door to discount and loyalty programs – which some cannabis shops have already moved forward with – and remove restrictions on things like cartoon characters and bubble letters, which were “difficult to adjudicate,” he said. The amendments will also allow billboards to show things like a legal dispensary’s name, location, and contact info. 

“One of the ways in which this is critically important is, for example, if a licensee has a product that isn’t selling — and we’ve seen this a fair amount,” Kagia said. “Our current rules make it challenging for them to discount the products that aren’t doing as well to get them out the door. And so this will provide a lot more flexibility for licensees to operate like much of the rest of the economy, and get these products moving.”

The goal, Kagia said, is to give licensees more “flexibility to compete” and to “build awareness” with customers. 

“It’s critical that we strengthen our market’s ability to compete, even as we maintain our focus on public health and safety,” Kagia said, adding that the changes follow feedback from licensees and recommendations from OCM’s compliance unit. “There’s no need to artificially restrict the market on issues that are not compromising public health and safety. And so we’ve taken that feedback to heart.”

The tone of the meeting was at times tense as Perry demanded answers from OCM on its current pace of licensing. For example, he asked for details on how many applicants from the November queue were contacted or given an opportunity to cure.

“Maybe,” he said, after referencing the “tsunami” of licensing lawsuits regulators have faced, “some concerns that some people have about OCM is because the state Liquor Authority is taking six months to process and grant licenses while we’re doing it, in many cases, in 60 days.”

“We are processing licenses of people who have applied in November and December,” Board member Jennifer Gilbert Jenkins responded. “We don’t take 60 days. Stop repeating that.”

Regulators then gave a series of updates, with McKeage giving the executive director’s report.

Tabatha Robinson, OCM’s director of economic development, gave an equity update, after which Perry asked about the “current status” of Damian Fagon, chief diversity officer. Fagon remains on administrative leave, Wright said, and provided no other updates. Fagon has been on leave since March while the Inspector General’s Office completes an investigation related to claims of retaliation. Perry also asked about the current OCM headcount, which is 180.

The public comment period was again filled with complaints about lack of communication from OCM and the slow pace of licensing. 

Robert Griffiths, a Columbia Care employee, spoke about the company, one of the few to hold both medical and adult use licenses, as it previously served the medical side. Griffiiths’ first concern was related to labor peace agreements, which are required for cannabis operators. Griffiths said that he and other workers organized and held an election last October, but that Columbia Care has done “nothing but attack us and scare us.” The company, he said, has shuttered its Manhattan medical cannabis location to prioritize adult use, and the Brooklyn location is down to such a skeletal staff that when Griffiths got sick, the store couldn’t function. 

Google shows the Manhattan store, doing business as The Cannabist, “permanently closed” as of July 10, and the Brooklyn shop open only on Fridays and Saturdays.

Lindsay Wilson, a Columbia Care spokesperson, confirmed by email that the company closed its Manhattan and Rochester locations “due to lease expirations and are in the process of finding new locations for both.”

In response to Griffiths’ comments about organizing, Wilson responded, “We do have a labor peace agreement in NY.”

“I think this is a travesty because the patients are not being served,” Griffiths said. “Aside from the anti- labor actions they’ve taken, they continue to wholesale the product to adult use retail spots. That does not seem right to me.”

An OCM spokesperson told Cannabis Wire that they are “looking into allegations of anti-union activity.”

Editor’s note: This story has been updated with comments from Columbia Care and OCM.