Cannabis growers and processors want Gov. Kathy Hochul to act quickly on several bills to fix issues in New York's recreational marijuana industry amid recent concerns about a dwindling supply chain and increased sales.

The governor has until the end of the year to sign or veto hundreds of bills that passed both houses of the Legislature, but license holders across the industry argue time is of the essence for related policy changes to take effect as the legal market struggles to get off the ground.

"Roughly 40% of the cultivators this year planted less than last year, or not at all, and that's concerning when you have this retail ramp up," said Mack Hueber, president Empire Cannabis Manufacturers Association and president of Ayrloom and Gen V Labs."Obviously, last year with the injunction, that kind of held up more retail stores opening, so with two bad grow seasons, a lot of farmers can say 'not for me.'"

Stakeholders across the cannabis supply chain celebrated when the Legislature replaced New York's tax based on the potency of cannabis products with a flat tax rate in the state budget. A flat 9% wholesale tax on all cannabis products took effect June 1 — reducing average prices and making sales easier to audit.

Distributors pay the tax when selling marijuana products to a retailer, which places a higher burden on small producers. Lawmakers passed a bill to make tax payments due annually instead of each quarter to mirror the craft alcohol industry.

The next quarterly due date is Sept. 20, and cannabis farmers and processors are pressing Hochul to sign the bill before the deadline to give growers more cash on hand as they harvest the next season's crop to keep the supply chain strong.

"We need to make sure they're made whole so that next year, they're able to invest in their next growth operation," Hueber said. "That amount of money could be used to help fund those farmers or make those farmers whole and ensure that the supply chain keeps moving and growing."

A Cannabis Association of New York survey released last week shows concerns are mounting about possible cannabis supply shortages as sales are expected to increase. The association in April warned OCM of issuing too many retail licenses in fear of flooding the market.

Of 51 association members who responsed, 78% of dispensary owners and 66% of processors report their suppliers have said in the last three months they expect to ship less product.

Meanwhile, 53% of cultivators responded they have been unable to meet order requests in the last three months, according to the survey. About 27% of that group claims they often fail to fill orders — an infrequent occurrence for the remaining 26%.

Those concerns come with an increase in sales, with dispensary sales seeing an average 17% month-over-month growth for the first six months of 2024, state Office of Cannabis Management officials said at a recent Cannabis Control Board meeting.

Cannabis stakeholders also want Hochul to act quickly and sign a measure to define cannabis as an agricultural crop in state law.

Cannabis attorney Jason Minard, general counsel with Hepworth Pura LLC, argues it will streamline cannabis tax assessment — and reduce costly litigation crippling businesses.

"Why should cannabis, a crop that is cultivated from the ground up, be treated any differently than apples, grapes that we use to make hops, that we use to make beer?" Minard said Monday. "There is absolutely no reason or logical argument but for the stigma around cannabis, and that's what you face in a lot of these municipalities."

Another bill headed for Hochul's desk would make Cannabis Grower Showcases permanent, or allow farmers to partner with dispensary owners to sell  products at approved events like fairs or festivals. 

"Anything that's going to open up the market and give us a chance to demonstrate that we can grow and sell tested, clean products to the New York market -- then we applaud that and urge the governor to sign that as soon as possible," said Cannabis Farmers Alliance President Joseph Calderone.

The bill changes the temporary program that OCM put in place last year and would permit growers and dispensary owners to hold approved events for up to two weeks at a time.

Supporters say the governor must take action quickly and expand opportunities for entrepreneurs to sell their products, especially with summer already half over.

"We would hope that she would sign it in time for our next harvest season, and some people are already harvesting some," Calderone said.

Last year's Cannabis Grower Showcases, which started last August, netted $10 million in sales in just under five months it was in effect, according to OCM. The department approved 60 showcase applications out of 101 in 43 towns and counties. It featured products from 75 licensed cannabis growers and 19 cannabis processors who partnered with 12 different dispensary owners.

A total of 150 legal dispensaries are open across New York, more than three years after recreational cannabis was legalized, compared to just over a dozen legal stores at this time last year.