FINANCE

NEW YORK STATE SENATE FINANCE COMMITTEE — The state's cannabis regulator reported significant progress on licensing and enforcement during a joint budget hearing Wednesday, while economic development officials outlined ambitious plans for semiconductor manufacturing and downtown revitalization. Felicia A.B. Reid, acting executive director of the Office of Cannabis Management, told lawmakers that the agency has nearly doubled its licensing staff and moved 193 percent more licenses through the approval process since June 2024. The cannabis industry surpassed $1 billion in adult-use sales by year-end, she said, while the state's Illicit Cannabis Enforcement Task Force padlocked over 330 unlawful stores and seized nearly 7,500 pounds of illegal cannabis. Reid, who took the role nine months ago, emphasized the agency's focus on equity: 54 percent of licenses across the supply network are social and economic equity-owned, and 62 percent of licenses approved at the most recent Cannabis Control Board meeting were equity-owned, with 52 percent women-owned. However, lawmakers pressed Reid on ongoing concerns. Assemblywoman Crystal Peoples-Stokes questioned whether the agency's recent job posting for chief equity officer adequately reflects statutory requirements, and suggested the Legislature may need to pass legislation to restore the position's full mandate. Sen. Jeremy Cooney raised concerns about regulatory uncertainty around proximity protections for retail dispensaries, saying investors and retailers need greater clarity similar to State Liquor Authority standards. Meanwhile, Hope Knight, president and CEO of Empire State Development, highlighted the state's leadership in semiconductor manufacturing, noting New York has attracted $121 billion in new investments—more than any other state—and will produce an estimated one in four U.S.-made chips within 350 miles of Central New York. The budget proposes $400 million for downtown Albany revitalization, $300 million for a new POWER UP infrastructure program, and $100 million for shovel-ready industrial sites. Sen. Sean Ryan praised both agencies' progress, noting fewer constituent complaints about cannabis licensing delays and commending the state's responsiveness to Albany's economic development needs. The hearing was the 12th of 14 budget hearings on the Governor's 2025-2026 spending plan. NEW YORK STATE SENATE FINANCE COMMITTEE EXAMINES 2025-2026 ECONOMIC DEVELOPMENT BUDGET AMID CANNABIS ENFORCEMENT AND MWBE CONCERNS State legislators pressed agency officials on cannabis supply chain challenges, minority business certification practices, and tourism funding adequacy during a joint hearing on the 2025-2026 executive budget for economic development and arts programs on Wednesday. OCM Acting Executive Director Reid reported the cannabis market has reached the $1 billion milestone but acknowledged ongoing supply concerns, noting that farmers and processors worry about insufficient inventory to meet New York demand. Reid said the agency has conducted over 210 compliance inspections in the past year, issuing 1,118 findings, but has not revoked any licenses, instead working with operators on corrective action plans. She reported reducing cannabis application processing timelines to approximately 67 days and expanding the agency's communication efforts through eight office-hour tour stops across the state. Sen. Borrello (R) was confrontational, characterizing the prior OCM rollout as "an unmitigated disaster" and questioning why no licenses have been pulled despite compliance violations. Reid defended the approach, saying most operators want to comply once issues are identified. Empire State Development Commissioner Knight reported significant progress on MWBE certification, reducing a backlog of nearly 4,000 applications and cutting processing time from three to four times longer to 60-90 days. However, Assemblywoman Woerner raised concerns about alleged systemic bias against women-owned businesses in recertification denials, citing constituent cases where minor changes—such as a joint checking account used to write a business license check—resulted in denial and loss of millions in contracts. Knight defended the process as fair and multi-tiered but acknowledged the agency is investigating the allegations. Assemblyman Kim advocated for increased tourism funding, noting New York generated $137 billion in economic impact and $88 billion in direct spending from tourism in 2023—an 11 percent increase from the prior year. He argued the state's tourism marketing budget remains stagnant despite these returns and raised concerns about international visitor safety perceptions. Knight also provided updates on major initiatives: Empire AI Consortium now has 200 researchers working on 85 projects with $90 million requested for expansion; the NY CREATES extreme ultraviolet lithography tool will be delivered next year; and RUSH and FAST NY programs are moving forward with state property redevelopment projects including the Beacon Train Station and Creedmoor facility. Assemblyman Stirpe expressed skepticism about the CATALIST startup tax credit program, questioning whether providing income tax exemptions to select employees creates inequitable competition, and criticized the pattern of annual funding cuts to high-performing Centers of Excellence and CATs programs despite strong returns on investment. Sen. Baskin, representing East Buffalo, thanked ESD for post-Tops tragedy investment but raised concerns about barriers, paperwork, and lengthy wait times for small business owners seeking grants averaging $7,500. NEW YORK STATE SENATE FINANCE COMMITTEE HEARING ON 2025-2026 ECONOMIC DEVELOPMENT BUDGET — A joint legislative hearing on the state's economic development budget revealed sharp divisions over fiscal policy and significant concerns about cannabis licensing oversight. Acting Director of the Office of Cannabis Management Reid faced pointed questioning from Sen. Murray about inadequate pre-opening inspections at a Blue Point cultivation facility, with Murray alleging that OCM staff admitted inspections were never conducted despite claims of compliance. Reid acknowledged unfamiliarity with the specific case but committed to offline discussions. The hearing also featured sustained criticism from Sen. Rhoads, who challenged the administration's spending strategy, citing New York's ranking as the second-worst state for business climate, $24.5 billion in adjusted gross income lost to other states as of 2023, and $70 billion in state spending increases since 2019. Rhoads questioned why the state is not using an $8 billion revenue surplus to reduce taxes rather than increase spending. Commissioner Knight of Empire State Development highlighted achievements including a $400 million Albany revitalization proposal, Tesla's exceeded commitments at its Buffalo facility ($1 billion over investment targets, 250 additional jobs), and semiconductor industry expansion efforts. The hearing also addressed concerns about MWBE certification practices, with Assemblywoman Walsh citing a Times Union article alleging systematic denial of female applicants and describing the experience as 'degrading.' Knight confirmed an investigation into the allegations is ongoing. Other topics included ConnectALL broadband expansion, prison site redevelopment, and cannabis research funding. The hearing underscored ongoing tensions between the administration's economic development initiatives and legislative concerns about business competitiveness, regulatory oversight, and fiscal management. NEW YORK — State lawmakers sharply questioned cannabis enforcement and economic development officials Wednesday over persistent illegal cannabis operations, inadequate licensing oversight, and the state's track record attracting major employers, during a joint legislative hearing on the 2025-2026 executive budget. Acting Executive Director of the Office of Cannabis Management (OCM) Reid acknowledged that the state has shut down over 500 unlicensed cannabis operators, but conceded the figure pales against estimates of 10,000 illegal shops statewide. Sen. Krueger, who authored the state's cannabis legalization law, expressed frustration that promised seed-to-sale inspection contracts were never executed and that large illegal operators continue to operate with impunity across New York City, where some neighborhoods have eight illegal shops within a four-block radius. "I'm not sure we have the tools yet to actually track these and shut them down," Krueger said, suggesting the state may need new enforcement mechanisms including asset forfeiture for large illegal operators. Reid defended OCM's compliance efforts, stating the agency conducts both pre-opening and post-opening inspections, though he declined to specify staffing levels. The hearing also revealed tensions over cannabis licensing decisions. Assemblyman Braunstein criticized OCM for recommending approval of a dispensary 520 feet from an elementary school in Queens despite unanimous community board opposition. Reid distinguished between OCM's role—ensuring applicants meet proximity and eligibility requirements—and the Cannabis Control Board's final decision-making authority, arguing that community opinion is not dispositive under statute. On economic development, Sen. Chan pressed Empire State Development Commissioner Knight on whether the state's strategy of attracting casinos to New York made sense given its failure to retain Amazon headquarters. Knight cited recent business attractions including Micron, Fairlife (a Coca-Cola subsidiary), and Wells Enterprises expansions, but acknowledged ESD has not yet received a qualified developer for the long-stalled Atlantic Yards project, which faces a May 31 affordable housing deadline with significant liquidated damages at stake. Sen. O'Mara requested an organizational flowchart from OCM, citing confusion over which staff members handle licensing versus compliance, signaling concern about coordination gaps in enforcement efforts. NEW YORK — State officials faced sharp questioning Wednesday about the troubled cannabis social equity program and broader economic development initiatives during a joint legislative budget hearing on the 2025-2026 Executive Budget. Chairwoman Liz Krueger pressed Acting Director of the Office of Cannabis Management Erika Reid on why only 22 recreational cannabis stores have opened since legalization in 2021, and why nine store owners reported feeling trapped in debt by the state's social equity financing program. A New York Times article published the morning of the hearing detailed how the program intended to help low-income minorities and formerly incarcerated individuals had instead become "a debt trap for marijuana retailers." Reid acknowledged the CAURD (Conditional Adult-Use Retail Dispensary) licensing program "is not working" but deferred most questions to the Dormitory Authority of the State of New York (DASNY), which administers the Social Equity Fund. She stated OCM does not receive reports on fund operations or outcomes, a claim that drew skepticism from legislators. Krueger highlighted a structural problem: OCM must repay DASNY $50 million from cannabis tax revenues before spending on other promised programs like drug prevention education and social equity grants. Despite cannabis tax revenues exceeding $160 million this year, Reid said OCM is only rolling out $5 million in social equity grants and has no plans for additional spending on other commitments in the Governor's Executive Budget. "How are you supposed to manage the cannabis program if you don't have an idea of the investments that's going into them?" asked Assemblyman Dais, pressing Reid on the lack of transparency around DASNY fund spending. In other testimony, Office of General Services Commissioner Jeanette Moy presented a $1.7 billion budget proposal to manage 32 million square feet of state property, administer $34 billion in centralized contracts, and advance sustainability goals. She highlighted the Empire State decarbonization plan, which projects a 21 percent reduction in emissions upon completion of its first phase. New York State Council on the Arts Executive Director Erika Mallin testified that the state's creative economy contributes over $151 billion annually and supports 460,000 jobs. NYSCA saw a 40 percent surge in operating support applications this year, she said, demonstrating urgent need for continued investment in arts organizations across all 10 regions of the state. Several legislators raised concerns about grant payment delays. Assemblywoman Giglio noted a veterans recreation trail project still owed $150,000 a decade after funding was allocated, citing DASNY processing delays as a bottleneck for economic development projects. The hearing was held by the Joint Legislative Committee on Finance on February 26, 2025. NEW YORK STATE SENATE FINANCE COMMITTEE EXAMINES 2025-2026 BUDGET FOR ARTS, ECONOMIC DEVELOPMENT Albany — State lawmakers on Wednesday scrutinized the Hochul administration's economic development and arts funding proposals, with particular focus on a new construction procurement strategy and the adequacy of arts funding amid surging demand. The hearing revealed significant tensions over the proposed Construction Manager as Constructor (CMc) procurement model, which would allow a single entity to manage both design and construction of state projects. Sen. April Baskin raised pointed concerns, citing the Buffalo Bills Stadium project—which received $850 million in public investment—as a cautionary example of how streamlined processes can undermine state oversight and minority business requirements. "Private companies are not beholden to the public even if they are significantly funded by public dollars," Baskin said, pressing OGS Commissioner Jeanette Moy on how the CMc model maintains accountability. Moy responded that the approach actually strengthens state control by keeping design and construction as separate entities, with state engineers and architects maintaining oversight throughout. On arts funding, NYSCA Executive Director Erika Mallin reported a 40 percent surge in grant applications this year—the first increase in a decade following a 2022 grant overhaul. The Executive's budget proposes $72 million in all funds for NYSCA, including $60.7 million for grant-making. However, Assemblyman Ron Kim questioned whether this meets community needs, noting the arts generate tens of billions in economic impact through tourism and cultural spending. Mallin highlighted that the majority of NYSCA's 1,300 grantees through its Statewide Community Regrant Program have budgets under $1 million, and that the agency increased its minimum grant floor to $10,000 with a ceiling of $49,500. Sen. Liz Krueger raised infrastructure concerns, noting temporary boilers and pipes installed around the Empire State Plaza following a 48-inch underground pipe burst. Moy explained the emergency repairs and outlined a three-phase decarbonization project expected to reduce greenhouse gas emissions by 50 percent, with the first phase completed within five years. Sen. John Murray highlighted the escalating costs of the Capitol East Side restoration project, which has ballooned from a $17 million estimate in 2014 to $80 million today. Moy attributed increases to inflation, expanded scope including drainage repairs, and the historic preservation requirements that mandate careful handling of granite materials. OGS also reported progress on EV infrastructure, with 138 active charging ports at 34 facilities and 600 ports in pipeline, achieving a 24 percent fleet vehicle conversion rate. The agency reported 34.86 percent MWBE utilization—$170 million—in state contracts. The hearing underscored ongoing legislative concerns about balancing efficiency with oversight in state procurement and questions about whether arts funding adequately reflects the sector's economic and social value. NEW YORK STATE LEGISLATURE — A joint Finance Committee hearing on the 2025-2026 Executive Budget revealed competing priorities for economic development and social services funding, with government officials defending current programs while advocates pressed for significant new investments in student debt assistance, business incubators, and rural medical education. The hearing, held February 26 at the Legislative Office Building, featured testimony from state officials and three non-governmental organizations seeking budget support. The most contentious exchange centered on startup ecosystem funding, where Marc Alessi, executive director of the Business Incubator Association of New York State, argued for increased investment in the state's innovation infrastructure. Alessi testified that the state's 120 incubators and accelerators house over 3,000 startups annually and are responsible for thousands of new jobs in fields like artificial intelligence, biotechnology, and clean technology. He requested $300,000 in annual statewide coordination funding and expansion of the State Certified Incubator program from 20 to 30 locations. Alessi cited a 2023 PFM Group report showing the sunsetting START-UP NY program generated $1.58 in economic activity for every dollar in lost tax revenue, creating or retaining nearly 2,800 jobs and $1.3 billion in wages and capital investments. Sen. Murray questioned whether New York's business environment remained competitive despite such programs, while Alessi countered that high-growth startups require proximity to innovation centers and that New York competes with Silicon Valley and Boston, not lower-cost states. Carolina Rodriguez, director of the Education Debt Consumer Assistance Program at the Community Service Society of New York, requested $3.5 million in funding ($3 million from the Executive Budget, $500,000 from the Legislature) to expand debt counseling and financial aid assistance. She reported that EDCAP has addressed over $328 million in student debt since 2019 and saved borrowers $38 million. Rodriguez noted that 88% of EDCAP clients carry federal student loans averaging $80,000—nearly double the national average—with 71% being women and Black women bearing the heaviest burden. Dr. Richard Terry of Lake Erie College of Osteopathic Medicine (LECOM) Elmira requested $250,000 to create a Center of Excellence in rural health. He noted that LECOM graduates represent the highest percentage of primary care physicians nationally, with 70% of Elmira graduates entering family medicine, pediatrics, or obstetrics. Sen. O'Mara, representing the Southern Tier, praised LECOM's commitment to rural healthcare and noted the request was modest compared to $20 million Pennsylvania and $5 million Florida provide to other LECOM campuses. OGS Commissioner Moy reported that the state's MWBE procurement participation stands at 34.86% ($170 million) and defended the proposed increase of the discretionary purchasing threshold from $750,000 to $1.5 million, aligning with New York City standards. She also reported the state's electric vehicle fleet transition is at 6.3% and that the Legislative Office Building is in Phase 1 of a three-phase decarbonization project. Assemblymember Jackson pressed Commissioner Moy on heating and cooling issues in the Legislative Office Building, learning that such upgrades are planned for Phase 3 of the decarbonization project. She also questioned contract renewal processes for vendors like vending machine operators, learning that most state contracts have five-year terms. New York State lawmakers heard testimony Wednesday on the 2025-2026 executive budget for economic development and arts, with witnesses presenting data showing substantial returns on state investment in creative industries while warning of declining film production and financial hardship among artists. The hearing before the Joint Legislative Committee on Finance featured testimony from biotech entrepreneurs, medical educators, film producers, and arts advocates, all urging increased state investment in their sectors. Santiago Quiñones, a line producer with decades of experience in New York's film industry, delivered stark testimony about production decline. "I have never seen the level or the lack of production coming to New York as I've seen in the last year or so," Quiñones said. He attributed the downturn to non-competitive tax incentives compared to Georgia and to fundamental changes in the streaming industry, which now prioritizes expensive above-the-line talent like major actors and writers. He noted that Blue Bloods, which employed about 1,000 people over 15 years, recently ended production, leaving most of his crew searching for work. Quiñones expressed support for Governor Hochul's proposed film tax incentive enhancements, calling them "vanguard" in the industry. However, Chairman Pretlow pressed him on whether productions that film only exteriors in New York while doing interior work elsewhere should qualify for incentives, raising questions about the true local economic benefit. Arts advocates presented compelling economic data. Jen Swan of ArtsNYS urged the Legislature to fund the New York State Council on the Arts at $200 million, citing figures showing the arts contribute $151 billion annually to New York's economy and employ over 461,000 people. She noted that in Western New York alone, the nonprofit arts sector generates $381 million annually and produces $22.5 million in state tax revenue—more than six times what the region receives in NYSCA funding. Corey Aldrich of ACE!-Upstate Alliance for the Creative Economy called for a statewide creative economy plan, highlighting that from 2013 to 2023, the Capital Region saw 137 percent job growth in independent artists, writers and performers—far outpacing manufacturing's 11.4 percent growth. Yet, he noted, less than 5 percent of the state's major economic development grants flow to arts-related projects. Rafael Espinal, president of the Freelancers Union, testified that 41 percent of artists in New York are one medical emergency away from financial ruin. He called for a statewide creative economy plan that includes portable benefits—healthcare, paid leave, and retirement savings—for freelance workers, noting that the union represents over 150,000 self-employed workers across the state. Dance industry representative Candace Thompson-Zachery presented data showing 64 percent of New York City dance workers fund their own work from personal pockets while earning 24 percent below the city's living wage, and 37 percent lack medical coverage. On the economic development side, Marc Alessi of the Biotech Association of New York State testified that for every dollar the state invests in startup incubation and economic development programs, it returns $1.58 in economic activity. He described how Long Island's startup ecosystem, anchored by institutions like Stony Brook University and Brookhaven National Labs, has created companies and jobs, though he noted the START-UP NY program was "very bureaucratic," with only five of the original 20 Long Island companies remaining. Dr. Terry of Lake Erie College of Osteopathic Medicine highlighted the school's success in training primary care physicians for rural areas, with 55 percent of graduates staying in New York and 13 staying in the Southern Tier. He cited a 96 percent board pass rate, well above the national average. Assemblywoman Griffin expressed strong support for film production incentives, saying it was "nice to hear someone with an outlook of how we can turn it around, and how you can create high-paying jobs and keep people here in New York." She asked Alessi about outreach efforts to recruit companies to the state. The hearing underscored a central tension in New York's economic development strategy: while data consistently shows strong returns on arts and culture investment, and film production historically generated substantial local economic activity, the state faces intense competition from other jurisdictions offering more aggressive incentives. Lawmakers appeared receptive to increased investment in both sectors, though questions remained about the specific mechanisms and costs of proposed programs. NEW YORK STATE SENATE FINANCE COMMITTEE HEARING ON 2025-2026 BUDGET: ARTS AND CANNABIS INDUSTRIES SEEK EXPANDED STATE SUPPORT Albany — Advocates for New York's creative economy and cannabis industry testified before the Senate Finance Committee on Wednesday evening, seeking substantial state investments and regulatory reforms to address market challenges and labor protections. The hearing, which lasted approximately 12 hours, featured testimony on two distinct policy areas: arts and creative economy funding, and cannabis market regulation. On the arts side, representatives from Creatives Rebuild New York and allied organizations urged lawmakers to establish a statewide creative economy plan and increase funding for the New York State Council on the Arts (NYSCA) to $200 million annually—$150 million for programming and $50 million for capital projects. Sarah Calderon of CRNY noted that the organization has provided guaranteed income and employment to 2,700 artists over three years and surveyed 13,000 artists about their needs. She cited models from California, Illinois, Delaware, Massachusetts, and Washington that have established similar plans. Rachael Lorimer, a painter and printmaker from Troy, testified about her participation in CRNY's Artist Employment Program, which employed her through a partnership addressing housing challenges in a disinvested neighborhood. The program generated over 300 voluntary hours of community engagement. Mr. Stanford of the New York State Alliance for Arts Education emphasized the importance of arts education in developing a pipeline of creative talent and supporting the state's economy. "The arts in New York are the geese that lay the golden eggs," he said. Testimony also addressed portable benefits for creative workers. Calderon described Tribeworks, a platform that converted 170 of 300 CRNY-employed artists to W-2 status and provided healthcare benefits. Rafael Espinal discussed legislative models including New York's "Freelance isn't Free" Act, passed last year, which made the state one of the first three to create nonpayment protections for independent workers. On cannabis, industry representatives painted a picture of a market struggling with illegal competition and regulatory challenges. Britni Tantalo of the New York Cannabis Retail Association reported that the legal cannabis market generated approximately $1 billion in annual sales, while the total market is estimated at $5-7 billion—meaning 80-85% of sales occur illegally. NYCRA urged the Legislature to double the budget for Office of Cannabis Management enforcement staff, establish asset forfeiture mechanisms targeting large illegal operators, and create a private right of action for businesses harmed by unlicensed competitors. Ngiste Abebe of the Medical Cannabis Industry Association reported a crisis in the medical program: dispensary count has shrunk to 31 from an expected 80+, with 11 closures in the last 12 months and patient count declining from 150,000 to under 100,000. The association seeks repeal of the 3% medical excise tax, legalization of out-of-state reciprocity, and authorization for insurance coverage of medical cannabis. Joseph Calderone of the Cannabis Farmers Alliance and John Vavalo of the Processors Association called for implementation of seed-to-sale tracking under OCM oversight, a $5 million revolving fund for farmer infrastructure, and canopy expansion to meet future demand. Vavalo noted that the potency tax reduction from 21% to 9% was significant and that a pending bill would offer up to $400,000 in rebates for early processors active in 2023. Chair Liz Krueger and Chair Gary Pretlow expressed support for both the arts and cannabis industry concerns, with Pretlow providing historical context on NYSCA's creation and expressing frustration with what he called "shortsighted" government officials who undervalue the arts. Assemblymembers asked detailed questions about funding mechanisms, portable benefits structures, and cannabis enforcement strategies. The hearing underscored ongoing tensions between legal and illegal markets in cannabis and the need for sustained public investment in New York's creative economy. NEW YORK — Cannabis industry operators and hemp farmers testified before the Legislature on Wednesday evening that regulatory gaps and predatory lending are threatening the viability of legal businesses, even as illegal competitors proliferate across the state. The testimony, delivered during a joint legislative hearing on the 2025-2026 executive budget, revealed deep frustration with proximity waiver policies that allow new dispensaries to open within 30 feet of existing retailers—a dramatic departure from the original 1,000-foot distance requirement. Ms. Britni Tantalo, a CAURD dispensary operator, told lawmakers that some waivers have received 70 percent reductions in distance requirements, with no community input or due process protections. "There's nothing there that allows me to speak up and say, This could hurt my business," Tantalo said, warning that oversaturation risks cannibalizing the legal market and deterring investor confidence. The hearing also surfaced concerns about DASNY lending programs intended to support social equity applicants. Tantalo cited examples of retailers owing $2.1 million at 13 percent interest rates—terms she characterized as "unrealistic" and leading to business failures among disadvantaged entrepreneurs. Hem and cannabis farmers reported continued financial distress, with Mr. Calderone testifying that approximately 85 percent of his members are "either working in the red or just barely profitable." He cited recent price compression in distillate markets, where prices dropped from $6,000 to $3,000 per unit due to out-of-state arbitrage—product purchased for $650 per liter elsewhere and resold in New York. Medical cannabis providers asked for elimination of the 3 percent excise tax and, most significantly, insurance coverage to remove out-of-pocket payment barriers for patients. Assemblywoman Kassay expressed appreciation for the industry's willingness to seek greater self-regulation, while Chairman Pretlow raised concerns about enforcement challenges, noting that law enforcement is reluctant to arrest illegal operators due to concerns about returning to previous criminalization approaches. The hearing concluded at 9:37 p.m. on February 26.