New York Gov. Kathy Hochul on Thursday appointed John Kagia, the state Office of Cannabis Management’s current director of policy, to lead the agency on an interim basis.
Kagia will assume oversight of a $1.7 billion market that represents one of the national industry’s biggest growth opportunities but is not without significant challenges and controversy, including an inversion scandal that felled his predecessor.
Hochul’s choice of Kagia as the next occupant of what’s become a hot seat was first reported by City & State NY.
Kagia, who spent seven years at cannabis industry analytics firm New Frontier Data before joining OCM in September 2022, takes over from Susan Filburn, who led the agency on an interim basis after Felicia Reid’s December resignation.
He, too, will be interim executive director until his expected confirmation by the state Senate.
New York’s next cannabis czar is agency insider with industry experience
In a statement, Hochul praised Kagia’s private sector experience as well as his tenure at OCM.
“Mr. Kagia embodies what it means to serve others, and I am confident that he will continue to use his talents to uplift our multibillion-dollar, equitable cannabis industry,” Hochul said in a press release.
Industry figures also welcomed Kagia’s appointment.
“At a moment when the market needs steady, credible leadership, John is the right person to steer the ship and guide the agency forward,” Mack Hueber, president of the Empire Cannabis Manufacturers Alliance, said in a statement emailed to MJBizDaily.
“His appointment provides the continuity the industry has been calling for and positions OCM to build on the progress already made while tackling the challenges ahead.”
“Given his track record working with the office as Director of Policy over the past four years, we welcome the selection of an experienced professional with cannabis knowledge into the role,” the New York Medical Cannabis Industry Association, a trade group representing the large multistate operators that hold the state’s vertically integrated medical cannabis permits, said in a statement emailed to MJBizDaily.
New York’s third cannabis czar since 2024
In addition to the growing pains any maturing market experiences, Kagia has several other major challenges specific to New York.
In December, Hochul requested that Reid resign after OCM appeared to bungle an investigation into alleged inversion by a Long Island distributor suspected of smuggling cannabis products from out of state into New York’s regulated market.
Both Reid and James Rogers, who headed the agency’s Trade Practices Bureau that was formed to investigate supply chain malfeasance like diversion and inversion, left OCM after charges were dropped against Omnium Health.
And Reid, who served as acting executive director since June 2024, stepped into the role after initial OCM director Chris Alexander quit following a difficult start to legal sales in New York.
Hochul at the time branded New York’s tortuous rollout, marred by both lawsuits that delayed the issuance of adult-use sales permits as well as an audacious illicit market, as a “disaster,” though some industry observers questioned whether Alexander was a scapegoat.
New York Office of Cannabis Management’s to-do list
More recently, New York cannabis regulators have also struggled to implement a track-and-trace system like those seen in other states.
And it remains to be seen how New York’s market will react when growth tied to the issuance of new retail licenses slows.
There were 582 cannabis stores open for business in New York as of Feb. 5, according to a presentation given to the Cannabis Control Board.
Meanwhile, the agency is still processing thousands of business license applications submitted by a late fall 2023 deadline, more than 3,500 of which are for retailers or microbusinesses allowed to sell cannabis products.
Like other states, New York retailers are experiencing price compression with the average unit price declining nearly 20% since the first quarter of 2024.
Chris Roberts can be reached at chris.roberts@mjbizdaily.com.
