Joint Session: Diverse Voices in NYS Cannabis

Welcome to joint session, Diverse Voices in New York State Cannabis, where you hear from policy makers, legislators, thought leaders, licensees, advocates, and others interested in the state of the New York cannabis market. In a discussion that is wide ranging and honest, you'll hear from three of my former colleagues at the New York State Office of Cannabis Management, Aaron Gettleman, Benjamin Sheridan, and Matthew Greenberg. From the passage of the Marijuana Regulation and Taxation Act at the March 2021 to the issuance of the report from the Office of General Services Commissioner, Jeanette Moy, this discussion brings you into OCM, our thinking, triumphs, and roadblocks. This is not just an inside baseball discussion. This is a view into New York State government at a particular point in time.

During this period, we experienced the resignation of a formidable governor and the ascension of his lieutenant governor, the creation of a new state agency with a mandate to birth a new industry expected to span sectors of the New York economy that few others do. An industry transitioning from illicit to legal while maintaining a focus on social equity and restorative justice, all while coming out of a worldwide pandemic that counted New York as one of its worst victims. This is all to say, this was an exhilarating time for those of us coming together to work at OCM. I am excited to introduce my next three guests. This is the first time I've done an episode with three other people, and we're all and I I think the word would be alumni.

Right? We're we're alumni. We're all in that founding group of employees at the New York State Office of Cannabis Management. So I'll start first going alphabetically by first name, Aaron Gettleman. Aaron, can you tell us what your title was, your area of responsibility at OCM, and a little bit about where you came from?

Yeah. I was the deputy director of communications overseeing press for New York State's office of cannabis management. I was there for March 2022 to March 2024. Had a background working in nonprofit voter registration communications, then some startup communications, then government communications. And preceding that background in communications, I had a background in cannabis enjoyment, which, started a little before I turned 21 and was just kind of very passionate about cannabis, very passionate about the concept that government can do things and do things well in communicative, responsive, responsible ways.

So when the office of cannabis management was created, it was like, fuck. Where do I sign up? How do I get involved? How do I be a part of it? And most days, I am very grateful I made that decision, and there have only been a couple days in which I've deeply, deeply, deeply regretted it.

Alright. Well, hopefully, today is not one of those days.

Not at all.

Next is Ben Sheridan. Hey, Herb.

Thanks for having us on. This was gonna be a fun one, and I love the podcast. Frequent listener, first time caller.

Thank you. Thank you.

I was a deputy director of policy at the office of cannabis management overseeing strategy and policy implementation, quite a few of us on that portfolio. Had spent a few years in government prior to that here in New York state, and before that, a mixture of political campaigns, nonprofit work, a little bit in that social enterprise space as well. I left the office in February. After two and a half years there, I've been one of the first somewhere between fifteen and twenty three people hired who actually made it over to to work from the infamous, first press release of every of of all the staffers we were gonna hire.

I know because I looked this morning. It was 21. Yeah. You and I actually were in that list of 21, and not all 21 came. I I think it was, like, 17 or 18 of that 21 actually showed up.

Yeah. Including the chief equity officer that had been named and never started.

Anyways, very, very, very well, thanks for having us, man.

Okay. Matt Greenberg. Matthew Greenberg.

Thanks, Herb. Yeah. Matt Greenberg here was a program analyst three at OCM on on Ben's team. Was really for the first couple months I got to OCM in May of twenty twenty two. And until John Kaguya showed up in September, I was really kind of the the top economic voice at OCM and then, you know, played a pretty integral role in helping the office kind of think about the way that that TPI was gonna work and all these other major kind of economic functions that we worked on prior to being at OCM, was in the hedge fund space in the finance world, investing in the cannabis sector since 2017, helped Navy Capital kinda get their investments off the ground in Canada and then went from there to to run my own fund in cannabis.

So that's my quick background.

So you're one of the people either to blame or to give credit for the TPI?

Yeah. I I think, you know, between between me and Ben, we both we both take some of the blame on on that effort.

Alright. And, for myself, I was the director of operations at OCM, began on December first of twenty twenty one, with Ben. And, at OCM, operations was responsible for licensing, compliance, and enforcement. Prior to that, I had been deputy commissioner at Department of Motor Vehicles where I was responsible for all the offices that you're familiar with when you think of, DMV and as well as the relationship with the county clerks who ran half the state's DMVs. So that's, where we come from.

So, again, let's just go back a little bit because it is three years now. And and, you know, people expect that after three years in New York, you'd have this robust, wide ranging industry. But people have to remember that the office was created on 03/31/2021, when it was signed into law by governor Cuomo. At the time, my understanding is from the press reports that I've read, the governor had a favorite to lead the office. It was the governor's favorite, but it was not the favorite of the state legislature that had to approve this particular hire.

So nothing happened. And then the governor got into his, you know, turmoil and resigned. And governor Hochul took office. And in September so now we're talking about six months later, governor Hochul announced the first appointments to the staff. Governor Cuomo had previously announced a couple of board members.

Governor Hochul announced the remaining three board members completing the cannabis control board membership, and then announced the appointments of the actually, chief equity officer. Again, chief equity officer never, began and announced the appointment of Tremaine Wright to be the chair of the cannabis control board and announced Chris Alexander, Christopher Alexander, to be the executive director of the office of cannabis management. So that established the agency. At this point, there's still nothing. Right?

There's no office. There's no copier. There's no printer. There's nothing. The next month, October of twenty twenty one, there's a first cannabis control board meeting.

That meeting is the one where they announced the, you know, nomination of 21 staff members that was passed. That was early October of twenty twenty one. That group did not begin to actually work until December, 2021. Ben, is that your recollection?

More or less for sure. I wanna say nothing, you know, done for, you know, Centimeters at that at that point in October, but certainly, it was a little bit of work taking place across a few different agencies. What would turn out to be pretty fundamental decisions about sort of how the agency would scale and staff being made in those early innings, whether that was, you know, at DOH, it was a loose amalgam of efforts that needed to be tied together under a formal office for sure.

And that's a very good point because when we did begin in December of twenty twenty one, and I should say that between October and December, that, you know, a lot of us that knew we were gonna be named Mhmm. Had already begun to work. Right? And we were having phone calls. We were doing interviews.

You know, there was a lot of work that was going on. But we began December officially December of twenty twenty one. And the work, Ben, I think that you're referring to was one of the things that happened. We walked in, and there was a budget that was already set. Right?

So division of budget had already decide how much money we were going to have to spend on on everything. There was an org chart that was created, and that was that was handed to us. Right? And that was the org chart that we had to follow. I think ITS also had developed, in their minds, a system that they wanted us to use that they were actually going to build, and that was pretty much sort of built out on paper.

But it was something that the ITS, was going to have to program and create with the input of, you know, hopefully, of the people that were coming into OCM.

To collect those requirements, all about the data requirements here.

So, Chris, at the time when he was appointed, you know, very, highly regarded. The governor gave a lot of credit to the experience that he had. The legislature, gave a lot of credit to the experience that he had. Advocates were were supported. Legislature was supported, and the executive office was supportive.

If I may jump in here

Anytime.

Beautiful. I'm sorry. But I think kind of when we talk about cannabis in New York state, I think it's often important to kind of take that step back and see what else was going on politically at the time. Because I I think when you look at the last three years of cannabis in New York, a lot of it and a lot of the decisions, some seemingly deeply arbitrary that have come from the governor's office, often are tied to kind of how else she was utilizing power, how how much power she felt she had, and I think what her top priorities were. When you're you're looking at September of twenty twenty one, governor Hochul was brand new.

She came in. She had not been a creature of Albany. Remember, Andrew Cuomo had been in Albany since he was 21, like, maybe younger, working with his father, then was an AG. Hochul had been lieutenant governor for a couple of years, but she had never been in the state legislature. She wasn't really knowledgeable.

She didn't have deep relations and didn't really have much soft power to swing. So I think when it came to her selecting Chris and Tremaine, both of those picks came from her being a bit deferential to the legislature.

Agreed.

And I think those were, in some ways, olive branches. And I think often, if you don't look at that, other actions she later takes are really confusing because, yes, she nominated Chris and Tremaine. But I think in a lot of ways, she nominated who she felt would have the easiest trip through the state senate for approvals. And when it came to that, I don't think she had a deep relationship with either Chris or Tremaine, which I think, those shallow roots later get exposed during the process. But at the end of the day, Hochul didn't have power, didn't have a political capital to to swing around, wound up going with the the path of least resistance, hoping it would kind of buy goodwill from the legislature and did a couple other things, I think, too to buy goodwill from the legislature only to slowly learn that did not give her more power over the legislature, which has made it tougher for her to govern the state.

I think Andrew Cuomo made being governor of New York look easy because he had he had that power. He had decades upon decades of accumulated power where he knew where the the the skeletons were hidden. He knew where the bodies were buried. He knew how to make sure everybody did what he wanted. And I think governor Hochul has never been particularly good at making people do what she wanted, And I think that's led her to to come from a place of weakness and insecurity very different from how Cuomo covered.

We talked about, OGS, ITS budget. So, Ben, is there anything from your time there where you saw either that they were being, sort of supportive and helpful, or did you see them as being more sort of detrimental and, an obstructionist?

I I don't think,

He's smiling. He's smiling.

You know, I don't think obstructionist is, like, a fair necessarily a a a fair word at the levels that kinda we were maybe in it on a day to day basis. Like, a lot of hard work effort, you know, went into building what was there. And there was a little bit of a sense that, you know, we were building something new, and and, you know, I think it kind of goes throughout the agency. You could see where these learning gaps, you know, may have presented hurdles to getting started and and, you know, just hitting the ground running with a ton of momentum. So, you know, when, you know, you're sitting down with a few folks from the state ITS agency, and they, you know, they ask you in your first week, you know, tell us all the data requirements for this type of procedure for, you know, a cannabis farmer and processor.

And and there's, like, you know, 20 folks in the office who are who are also, you know, doing all these other pieces, I think there's a kind of a collective prioritization that takes place. Would not say that the, you know, the folks on the front line at ITS might have been, obstructionist.

There clearly wasn't instruction from the governor's office to these agencies that were, you know, important to OCM. Right? That, again, civil service, OGS, ITS, and and budget that they should circle the wagon, support, and make sure the agency was getting what the agency needed.

Yeah. And I think, you know, just going to what Aaron was speaking to a minute ago and and kinda how high functioning government sort of works. You know, I think this transition right away, the the Hochul administration is doing a little bit of learning on the go. You know, it's your first month of government. How do you wanna go ahead and build a new state agency?

And they were stepping in you know, kinda stepping out to a moving trend in a lot of ways, with where things were with the development of processes. You know, I think it's fair to say things look substantially different than a lot of those people who have been maybe working on it for a number of months anticipated when they were first told about the project, just given, as Aaron said, like, the direction that OCM went. Mhmm. And then you look at, like, the broader political context in New York, you know, of all the fires that needed to be put out around October 2021. You know, if you were able to get a few good PRs out and show unity and progress and turning the chapter, I think that's makes sense.

And and, you know, that's what they were trying to do. I think this is a particular instance where governing, you know, is really hard. You know, I'm sure across the board it is, but starting a new agency, in this sort of environment, which I'm sure is we'll get into over the rest of our time together, there are so many factors at play here. It takes, you know, not only political power, but in knowledge and and and, perspective on the industry. It takes, you know, listening to experts and, you know, just a lot to get done in a, in a short period of time to meet the expectations of New Yorkers.

Yeah. And I think, like, I don't think anyone was actively obstructionist. I think when it so I was I was that first crop of people getting interviewed late December, early January '20 '20 '1, '20 '20 '2.

Mhmm.

I get my verbal offer in, I believe, January, not able to actually start until late March. I had others on my team who had gotten similar offers and weren't able to start until May or June. And I think I don't think anyone said, oh, we don't care about cannabis. We're just gonna let this sit on the side. I just think at its core, government is a series of bureaucracies where no individual actor is incentivized to go above and beyond and move things and be meticulous.

And I think in government, everybody, whether it's the lowest ranking civil servant on the team, pretty much up to a chief of staff or an executive director is incentivized. And this is beyond just OCM, It's incentivized to do the bare minimum, not in the sense of, oh, be lazy, but in the sense of you can actually create more problems by doing more and going above

and

beyond than if you just sit back and don't do things and let inertia carry things. And I think the weirdest part of the OGS report assessment on OCM is they denigratingly say OCM had a start up culture, which in any other place is actually a compliment. But OCM had people who were working late, who were doing things beyond just the the bare minimum of their job title. And I think that made us a serious outlier within government, which then created all of these cultural differences between how our office worked and how the the folks who are just counting down to to the day they hit their pension operate.

And I was gonna take objection to a little bit of your characterization just because of that. Because at at OCM, we know we did have a tremendous staff. Everyone was committed to the mission. Everyone was committed to each other. Right?

You you didn't wanna be the person that was sort of letting the team down, and that was across the board. And and I remember one of my staff members at one point saying, you know, she remembers being you know, feeling like she was one of the top performers at her prior agency. And here at OCM, everybody was a top performer that she you know, the way she phrased it was that it seemed like OCM had all the first round draft picks. And we did. We, you know, we had people that wanted to be there.

My experience was that, you know, civil service didn't help us at all. They sort of, focused on, you know, Picayune type of reasons why we could not hire people. I mean, I give you my, my, my favorite example, which is an awful one was, you know, when we were trying to staff up our enforcement team, and we had found, you know, the first group that we had pushed to, civil service had, seven individuals from throughout the state, all kinds of, you know, race, ethnicities, language skills, just tremendous, candidates. And and and we submitted the names, and we waited and we waited and we waited. And then there was this one Friday afternoon when we got an email back from civil service, and they all got rejected.

And they all got rejected for various reasons. Like, for example, you know, police officers were not investigators. So we actually had NYPD officers who applied, but since they were not investigators, they were not eligible. So, you know, for reasons like that, we had tremendous, tremendous applicants that just one after another got rejected. And that happened throughout the time that we were there.

Oh, yeah.

And then when we were fortunate enough to get someone hired, as you said, it would take months to bring them on board.

I remember we were hiring for a role on the communications team, and I don't know who wrote these arcane rules, but it it has a list of actually undergraduate majors that are allowed to be hired for this role. And, like, we're hiring somebody. I think it was for a PR role, and we were told somebody whose undergraduate degree in public relations did not qualify them. They needed an undergraduate degree in, like, English or political science.

Exactly.

And, like, I my undergraduate major was in something virtually no other college has. I think it's essentially, what we're dealing with is this arcane unbending institution of government, And we're coming at this with all of this energy figuring out how to burrow under walls, climb over walls, run through walls. And everybody else in the state government's like, well, why are you even trying to do anything? Why don't you just kinda sit back and not do anything? And I think not to jump too much and get into to press, but at the end of the day, most state agencies are not particularly responsive.

I think their hope always is if we are silent, a story will go away. But when you're building something new and you actually wanna convey information, complicated information to people in the market, customers, consumers, businesses, you're gonna wanna answer every question. Absolutely. So I think I got a lot of side eye from the governor's office where they're dealing with the dormitory authority, which is Fort Knox when it comes to answering questions. Nothing leaves.

And it's me asking for them them for approvals two, three, four times a day sometimes, and they were just like, well, what issues must there be if they have to communicate this much? And it's like, no. This is just kind of the bare minimum of the job.

Alright. So despite all of that, you know, it's December, January, February, March. You know, we're hiring. We're finding office space at you know, we started with no office space. We're finding office space.

We're bringing on more staff. At some point, you know, in March, I think we were probably about seventy, eighty staff members. And, Ben, you, you remember some of those car rides up to Albany where we're talking about the agency. We're talking about, you know, how to get this going. And, you know, and already there were news articles, right, that the agency is not doing anything.

So the idea came to have these conditional license categories. Right? And, you were very much involved, the conditional cultivator license.

Yeah. Well, you know, you gotta grow the weed, you know, and then you gotta process it, and then you gotta test it, and then you gotta sell it.

Makes sense.

We were building that from scratch. Obviously, there was a cannabis supply chain in New York, so to speak, not a legal one regulated and tested and and whatnot. So, you know, we were stepping into some headwinds there. Stores were starting to pop up. Bullets at stores, you were starting to kinda hear those first.

Real grumblings about, you know, what are they? Are they you know, it's funny because you had friends early on who were like, so many stores, guys. Congratulations. And I was like, oh oh, no. No.

No. No. Those aren't ours.

And and there really was no thought. I mean, I'm not sure whether this happened anywhere else in the country or anywhere else anywhere else to this extent. The beginning, there was really not a thought that this was going to develop.

Well, I you know, it happened in other jurisdictions, and that's how I think with the playbook to combat them was sort of constructed. And, you know, I'll speak I'll hand it over to Matt who, you know, led some of the work on this effort. Yeah.

No. Look. I I I think the difference between New York and so many other jurisdictions is that we had a problem with bodegas, but our biggest issue ultimately from an unregulated market perspective was delivery. Right? It was people going to your home and and you call a service, and that's what we all got used to in sort of New York City is someone coming to your house.

And and I think that was a unique difference between New York's, you know, legacy market and our unregulated market and a place like California where you basically had, you know, medical stores quote, unquote medical stores that were operating in the unregulated market from day one. Their problem was converting all those unregulated stores to the legal market. From our side, it was, you know, let's convert all these legacy dealers over. And I think what ended up happening was because of the fact that there was no clear enforcement, and, obviously, you guys can go into the background of how that all happened, you know, no enforcement mandate, these stores just started popping up and no one was doing anything about them. And I don't think you've seen that anywhere else.

There wasn't, like in other places, there was a plan from day one to combat what was already a known problem. There were very few places where this sort of thing happened the way that it happened in New York, and I think we're dealing with something incredibly unique as a result. At the end of the day, as Ben points out, I think we can draw on those places that had that issue to begin with to combat it now. But it was not something that we've seen, you know, really happen anywhere else up until New York that you went legal and then had the storefronts pop up. It was usually the other way.

My favorite anecdote from and from the whole legal stores situation, and it's not really a laughing matter. I don't know if there's, like, a favorite anecdote out of it. But, it's not even from New York. It's I think it was Minnesota where they legalized it. And then, like, the next day, they announced their or whenever it was later, they announced the person who was gonna run the office, their version of Chris.

And the next day, that person actually had to step down because they had run a legal store in the state. They were actively running one. In our conversations with California, various Canadian jurisdictions

Yeah. DC as well. I think we when we were having a conversation with DC as well.

Yeah. It's something that that we had heard about. I think the scale and velocity that happened in New York leaves so many questions about, like, well, what what even was that? You

know? Mhmm.

And at the time, the OCM general counsel's opinion was that OCM itself did not have authority to go after unlicensed, retailers, so that we only had authority over licensed retailers. And in a way, it didn't really matter, man. At at the time when this began, we had three people in enforcement. We had the deputy director that I hired, and we had two people that had come over from, Department of Health. And then we had that list, that I mentioned earlier that got rejected by civil service.

So it took a while for us to, you know, just, get additional hires. And when we did that, we did a lot of outreach to local law enforcement to try to educate them about what was going on, but they didn't wanna be involved. Whether it was, you know, big, you know, NYPD or some small town sheriff, none of them wanted to be involved. That changed over time, you know, as the as the news picked up and the governor's attention turned to this, you know, that that did change. But in the beginning, and I'm not I'm not sure whether I always sort of thought of it as a passive aggressive kind of thing.

Like, you guys wanted this. It's your problem. But, in the beginning, there there was no appetite, by any law enforcement to to start going after these guys.

I think this is something we've seen in other states when you talk about kind of the hurt feelings that emanate from legalization that in states that have legalized since New York, those legalizations often include extra budget for law enforcement to to continue to do their job, almost like bribing law enforcement to do their job. Ostensibly, legalization actually would free up resources because they wouldn't be going after kind of petty consumers and this and that. And I think it's not just the hurt feelings because I think there are a lot of other entities that could have stepped up and done things. I think it's similar to anything in politics. This was a tough cookie.

And when there's not a simple solution and a simple victory at hand, Everybody passes the buck to somebody else. And OCM were the only people for one, two years who are even willing to try to do anything. And what we're seeing now in 2024 is New York City Marshall Resources at a significantly greater rate than the state is. It's why we've seen, despite OCM and their folks, they're out there every day trying to shut stores down. The city and the sheriff's office has shut down, what, five or six times as many stores as the state has.

And it's not just that there are a lot of stores in New York City. It's that Eric Adams actually has committed resources and views this as a problem. And I think Kathy Hochul only views this as a problem in as much and can get her press and not actually a problem she's interested in solving or putting in any hard work to solve.

And and by the way, the the last thing I would add is we had a major issue that the reality of it was there was nobody being hurt by this at first in a lot of ways. Right? Like, yes, there's the public health problem. But from an economic perspective, like, there were no retailers. There was no, you know, there was no legal market.

And realistically, this was just the legacy market was getting hurt by it, you know, to some extent. But really, it was helping prop up what was a really struggling New York retail sector at the time. And I think a lot of people looked at that and were like, hey, if we have thousands and thousands of vacant stores in New York and the commercial real estate market in New York is gonna crash, what's the harm in kind of filling this now newly legal pathway for people to to get weed? I think that was sort of at the beginning how this was looked at before it became a bigger problem and and not from an OCN perspective but just broadly in society.

Right. So so in that spring so March of twenty twenty two, the governor announces the seeding, opportunity initiative. Right? So that that is the farmers, and that is, you know, where where things start

to get

really in right. Processors. But then also, the card. Right? Announces card, that that application isn't ready yet.

That'll be later in the summer. But that spring, we're gonna give the ability to farmers to start growing. We're gonna have processes in place to be able to do something with that product.

Yeah. And let's I mean, not just, you know, not just to to catch us back up to our friends at ITS, they're not on board for the speed that the legislature has just told us to go at. So let's just, you know, like, keep in mind. So the legislature hands this law, and they say, put seeds in the ground. And that you know, so you grow it.

And that means by the time it's grown, if there's not a place to sell it, people are gonna have catastrophic loss. So at that point, I think February 2021, there's a little bit of giddy up around everything that needs to be built in order to hit this end of year 2022. Sorry. Twenty twenty two. Everyone's like, oh, wow.

How how long? Nine months? Cool. Okay.

And we should say that, you know, ITS was committed to building this. They didn't have the staff to do it, but they were committed to doing it.

That's why I talked to say their obstructionist. They were like, they were in it.

No. We we went out and, and sourced, some vendors that were actually, you know, doing this, that they had the programs in place. They had the software in place. They were doing this in other states, but we were not allowed to use them. And, again, this this goes to the OGS stuff, that goes to the budgeting and the ITS where they're controlling the agency's, output and the the workflow.

So when some advocates complain about the lack of transparency about how, you know, applicants can't see, you know, where the status of their applications. I mean, these are things that we discussed early. Not brilliant. It's sort of normal, basic stuff, but we didn't have it because we were waiting for it to be built by, by the state, ITS division. So the seating opportunities initiative, one of the major components is CARD and is this effort that is, spearheaded outside of the agency.

It's given to the dormitory authority of the state of New York. And at the time, the head of, DASNY was also a board member of OCM. So I I don't know how this idea began. It wasn't our idea. We were hopeful that we would get some funding to be able to do some grants, some loans, etcetera.

But this, you know, grand scheme to bring in a private equity partner to completely build out and hand over keys, I don't believe that originated, with OCM.

The public private partnership.

Well, conceptually, you know, at a high level, I think there was this effort at creating intergenerational wealth. That was, like, the starting point. How do you develop something and whether or not that's where things ended, that was cards on the table. You know, if you're gonna do a program here, how do we do this in a way that creates value for the people who are given the opportunity?

Well, that was the that was that was the Ben Sheridan that was the Ben Sheridan version of what Oak Park was. I mean, there's a big difference between where where that was and and what the reality of of what the private

Man, politics ends up, you know, like, going through the wood puts these things through the wood chipper, and, like, what comes out on the other side is looks different. I know, you know, at one point, there was you know, speaking again to the issue, like, well, how big are we gonna grow this agency? There was this question out there, like, rumblings around budget season. Like, well, could OCM run this on their own?

Or and

I think at that point, you know, whatever happened at the at the negotiating table, this was seen as something that the market at the time could support a trust in this kind of unique state run program that, was gonna do something that was, you know, different from what had been done before and and met both those equity and, you know, vast financial expectations for for New York.

And you mentioned the the agency being budgeted. Right? So so we at this point, we had about eighty, eighty five people, and the agency was budgeted. So when it was complete, it was, like, a 20 was the total number, you know, roughly around there.

Yeah. Yeah. And and was there there were I remember just, you know, a good example of, like, you know, government's a team sport. Everyone had a hand in, some more than others. I remember, like, early on the conversations with, like, an ESD or, you know, people who did this sort of work for the state.

This is what they do. You know? They

wake up fire state development.

They wake up in the morning, and they they kinda run these programs. And when cannabis was becoming a thing across government, you know, people it took a little bit of time for everybody to to see that kinda team sport element to it. You know, I think folks like the rest of society, you know, greeted with all sorts of different

Could we have said no? Because, you know, I think it it was clear to me and some other people, right, that that this just wasn't it was the wrong agency. Right? This is not what DASNY did. You know, they did major projects.

And, you know, whether they did them well or not, they were usually, you know, late and over budget. This had to be done very nimbly, very quickly, much, much lower scale. Right? And they're not doing big construction. This is small office space.

So we're talking about at that point, it was March when it was announced. Applications went out in August of twenty twenty two. Started reviewing that fall.

Yeah. But but Herb, in in between there, there's this big time period there where

Absolutely.

You've got the farmers are growing. And DASNY has CBRE retained looking for spaces, and there's supposed to be a parallel track there. If you're talking about opening enough doors to be able to support what was gonna be over 270 farmers who had, you know, been given licenses, there was clearly a parallel track of opening a store. And we've seen in the months, you know, in years since that it takes about six months at least to open a store. So in that time period, realistically, if we were gonna get this thing, you know, choreographed properly, Dazzne should have been signing leases starting in, you know, April, May, June of '20 '2 to get those stores built out for, you know, a a December 1 sale.

And I think that's where from the broader OCM perspective and, obviously, I came on in in May, started interviewing in February, so started getting a little bit of familiarity with this. But you start to say, look. There's a massive oversupply problem here relative to the number of doors that we could realistically have open. And I think in those months between March and August before you even open an application, the idea that the state, you know, was gonna be responsible for opening all these doors, it became very obvious that to to OCM folks, that was never gonna happen. And we had enough of a of of visibility into this to say, look, you know, this DASNY run program being the sole way that doors are gonna open in this state is you have to get a lease signed by Dazny and by the fund.

The fund, by the way, whose manager didn't get picked until June. The and to be able to sign leases, you know, in September, October with money that they were gonna raise after that. The the choreography of the whole thing made zero sense and there was clearly no thought given to it. And at a certain point, I think any claim that there was a choreographed kind of thought to this became the, you know, Reuben McDaniel telling a story to the governor that there were gonna be 20 stores opened by December. You know, 20 leases opened by December or 20 leases signed.

And and that just was unrealistic and was never gonna happen. And from the OCM side, I think that's where the maturations of, you know, bring your own store and do, you know, all of these other things started well into the early, early summer of twenty two.

I remember it as B Y O L, bring your own lease. Right? And we were trying to free up the card, licensees to be able to bring their own lease and have the benefit of some of that funding. Right? Some of that funding that the governor had, had put in at the that $50,000,000 amount to to to kick off the fund.

Yeah. I I mean, the bring your own lease was like, let's get Rubin to agree, you know, or Dazen to agree to some sort of use of this 50,000,000 that wasn't just for the fund. But there was at at some point, you got to the point where it was like, I don't even care if these people get financing from the state. Just give them an advantage of some kind because otherwise, you know, 70% plus of these people are gonna be sitting on the sidelines waiting for Dazny to sign a lease that they're just never gonna sign, and these licenses that they've been given are gonna be worthless.

Yeah. For context, the card the card application did not allow individuals applying for a license to bring their own location. They were fully reliant on Basney. And Matt was kind of an oracle this whole time, like, seeing problems, like, three or four months before a lot of others caught them. And in, like, June of twenty twenty two, he turns to me and he's like, hey.

Can folks bring their own lease? And the dormitory authority said, well, if we let some people bring their own location, what winds up happening is the best capitalized applicants will not use our locations, and we will never get the funding we need to get this program off and running. And I think the better question, taking a step couple months back, was the public private partnership ever a good idea? The state senate was willing to kick in 200,000,000 to support this program that wouldn't have required a private partnership, that wouldn't have required PE money or or private equity money. But I think the dormitory authority was more interested in seducing those with big money and building those relationships for themselves than actually running this program as efficiently as possible.

And that's to say if they even cared at all about running this program even remotely efficiently.

Yeah. I mean, look. The the last thing I'll I'll I'll kinda add on this is having sat through that process, having sat through meetings for months with the dormitory authority with CBRE and talking about what we thought were the right places to look for leases and where they should have been targeting. It was very clear that we just had different visions for this program than what the DASNY folks had. They were focused on getting a 50 flagship locations open across the state.

I remember that discussion. I remember and I actually took a tour with, some folks from OCM and some folks from DASNY with together with CBRE. And that's what we were looking at. We were looking at all these, you know, what would be flagship stores and prime locations. Right?

And, you know, my view then was it's not a flagship store to the person who owns one store. Right? It's their store. Right? It's their their store.

And these are not gonna be state stores for us to say these are flagship stores. And, you know, why would I wanna be on Fourteenth Street, you know, and pay the rent at Union Square where I when I could be three blocks away, and people are gonna find me, and I could pay less in rent. Their mindset from the beginning was not sort of almost like a fiduciary to the licensees, where they were going to sort of look out for their best best interest as opposed to and I don't wanna say, you know, what their interest was at Dan's name. I don't know. But there was just no way to be able to execute tens of multiples leases.

Right? 10 leases, 20 leases, in any short amount of time. I remember at the time, you know, this is, again, coming out of COVID, and we had the supply chain issues broadly. And we had ordered a couch. I had ordered a couch, and it was gonna take four or five months to deliver.

It was just just what it was at the time. So I'm thinking, well, how are they gonna build out stores, order all the supplies, the shelving, you know, all that kind of stuff that you need, and get them built out by the time November, December '20 '20 '2 rolls around?

And spoiler alert, they didn't.

Thank you for listening to part one of our discussion, high hopes. Here's a preview of what you'll hear in part two, the blunt truth.

Presentation after presentation for months, were making it clear to the governor's office that we needed to open up this program and and it was, you know, very clear that they were listening to Dazni and to what Rubin was saying and to the, you know, the the kind of just straight up what ended up being mistruths. I don't know if they were lies. I I I don't know if they were exaggerations or lies or whatever you wanna call them, but we had access to the same data that Dazny had access to. It was very obvious that they were not gonna hit the goals that they were presenting as realistic targets to to the governor's office. And we made it very obvious through multiple in multiple points that it was going to happen, that they were gonna come off short of their goals.

The governor's office knew

it. Recognizing the pace of this wide ranging discussion, if you would like to learn more, please see our show notes where we have added many links to articles or press releases representative of the topics covered. I'd like to thank those listeners who have left us ratings and reviews. If you're enjoying the show, please join them in leaving a rating and review on your favorite podcast platform. It does help new listeners to find the show.

Joint Session is produced by me, Herb Waubot, with additional production and engineering by Matt Patterson with Rebecca Malpika on digital marketing and social media. You can find us on Instagram at jointsession.pod. That's one word, jointsession.pod and on LinkedIn at joint session podcast. You can also email me at herb dot joinsessiongmail dot com. Until next time.

This is Herb Balbeau. Thank you.