Former New York OCM spokesman critiques agency’s turbulent transition

After two years of having to get permission to talk about the inner workings of the New York Office of Cannabis Management, Aaron Ghitelman quit his government post to enter the private world of cannabis public relations.

Now the former spokesman for the agency is he’s speaking up about the inner workings of the OCM after a scathing report from the New York Office of General Services was released last month.

Ghitelman told Green Market Report recently that there were basically no decisions made at the OCM in which Hochul didn’t have a say-so and chalked much of the agency’s ongoing transition to “political games” being played by Hochul to save face in light of the turbulent market rollout.

The following interview has been edited for length and clarity.

Broad strokes, give me your thoughts on what stakeholders may see change in the wake of the Office of General Services report last month and the departure of Chris Alexander. 

Ghitelman: After the really tough year of 2023, New York’s cannabis market has been growing, stores have been opening, product is moving, and it’s growing in a real way, partially thanks to (New York City Mayor) Eric Adams who, the minute he got more authority to shut stores down, actually committed resources to shutting stores down in a real serious way.

The big questions for me are around those who have already put in applications for licenses, and how quickly can the governor’s office can actually implement this – and are they interested in implementing their suggestions in a real way? Because I think a big part of this report wasn’t actually about the function of the state or about the function of the licensing team at the OCM.

The report was more about a political concern of Gov. Hochul wanting to remove Chris Alexander from his position, and kind of creating what she must have felt like was the necessary landscape to allow her to remove him. I think they were looking for corruption, which they didn’t actually find. All they found is the same inefficiency that plagues every other agency that licenses anything in New York State.

At the core, they want to restructure the touch points and make things more transparent to applicants. But a big part of it is bringing on more staff. I am not aware of the changes having already been implemented. I’m not aware of the new hiring happening in earnest.

What I have heard a lot of is exhaustion and frustration from the people who still work within the OCM, where a lot of folks felt that the governor kind of blindsided them.

Not to mention, I think the announcement that the kind of massive change in review, where the November queue of people with locations – which was a lottery and not everybody was guaranteed a license – now everybody in that queue on the retail side has been guaranteed a review, but a parallel guarantee has not occurred for the December applicants. After everybody got their applications in, the rules changed.

I think the governor may have made a few fatal missteps that actually will slow down the process of getting these licenses out instead of speeding them up.

Any thoughts on the transition currently underway from Alexander’s leadership? 

Ghitelman: I’m surprised that the governor didn’t have a choice ready when she kind of made the moves to remove Chris (in May). She could have at some point in May nominated her hopeful successor, introduced them, popularized them as a choice and have them approved.

Even if Chris stayed on until September as he initially had planned on doing, the governor still, based on the New York legislative calendar, would’ve had to get somebody confirmed by the end of session in early June.

There’s a lot I’ve seen since she’s become governor that really makes me think Gov. Hochul’s a novice political operator who kind of is more interested in wishful thinking than doing the actual things necessary to make policies or appointments a success.

To me, it gets back to the central point about the report; I don’t actually think the report was about improving systems. There are a lot of ways you can improve systems without this railroaded public-facing report where OCM didn’t have a chance to discuss it or refute things before it went live.

To me, it was very clear this was a political decision where she no longer wanted Chris Alexander in this role.

What do you think we’ll see more of from the OCM and the CCB moving forward?

Ghitelman: At the end of the day what the governor is looking for is an agency that doesn’t really shake things up and doesn’t really make noise. If you look at how she’s governed the rest of the state beyond cannabis, it’s very kind of small picture things. Gov. Hochul hasn’t really pushed for big things. She’s a don’t-rock-the-boat type person.

I don’t know if that means kind of greater space for the registered organizations or for MSOs that currently are not in New York state or they’ll be able to enter New York state. But I think the governor kind of leans towards what big business wants from her, what big real estate wants from her. And one of the big issues with how OCM operated was it was very much an antitrust-focused office.

The MRTA created a two-tiered anti-monopolistic market to (does) not allow six or seven operators to form a cartel to decide what pricing costs. That is different than how the governor has approached a lot of other problems. I think her office and her team have a discomfort with antitrust. But if the governor wants to give more room for vertically integrated operators, that would likely be something she would have to run by the legislature, which make it tough.

There are a lot of things that have kind of been started and things that aren’t just the same as we see in other states. What we’re seeing from a lot of corporate America are retreating from the promises of diversity and equity and inclusion people made in 2020 now that it doesn’t feel as pressing or as politically beneficial.

The goal of the New York market was for 50% of licenses to go to individuals from social and economic equity groups, and based on the projections I’ve seen from applications, New York state is well ahead of that 50%. So theoretically the governor could cut back on a lot of the grander equity programs, scale that back, focus more on just getting licenses out, supporting those who already have capital already have lobbyists in their corner and coast on that and still surpassed the 50% social and economic equity goals of the MRTA.

Do you see anything changing in the near term?

Ghitelman: I think if the governor’s office was serious about staffing up and did indeed begin a real push to get folks on those teams and have real support for licensing, we may start to see increases an actual speed up and ramp up in, say, two or three months from now. In the near term, we’re probably going to see the same rate of licenses up for approval that we’ve seen in the last couple Cannabis Control Board meetings.

The report criticized OCM for having a startup culture. My read from that is the governor’s office wants people to almost work slower, but I don’t know how you can ask somebody to sacrifice nights and weekends when you just kind of trash their work and remove their boss.

So I think there’s a chance it speeds up. I think there’s a chance it slows down a lot. I think it could really go either way. And I think at the end of the day, if you were frustrated in March, there has been literally nothing changed.

It sounds like you would agree with folks who have said that Alexander was scapegoated by the governor’s office. Would you agree with that?

Ghitelman: Entirely. If you read the report, you would not know that we could not make any decision within the OCM without approval from the governor’s office. I was not able to get you a quote without it getting run by both the governor’s comms office and the governor’s legal team.

We were not doing a single thing without their approval, but if you just showed up and read the assessment, you might think all of this was news to the governor, which most certainly was not the case. And Chris was very much scapegoated.

A lot of the assessment is accurate in terms of lack of staff, efficiency of government bodies, and government licensing bodies. But you could have written that exact same report about (the state liquor authority), about building permits, about so many other things that take way longer than they ever ought to take, and way longer than they take in the private sector.

In my view, they went into this assessment looking for corruption, with the assumption that OCM moves with the same level of corruption as the governor’s office.