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August 4, 2015

A long time ago, we watched a prominent politician – before he was disgraced and run out of town – give a delightful graduation speech. He pretended to be all stiff and pompous as he made repeated references to a famous figure in antiquity: “As the great Homer once said…”

Toward the end of the speech, which was about the need for young people not to take things at face value, he let it be known that he was talking about Homer Simpson, not the author of the Iliad and Odyssey.

We couldn’t help thinking of that speech as we read about the state’s medical marijuana selection process. And every time we saw a reference to DOH, the Department of Health, we couldn’t help blurting out what Homer Simpson always says when he does something maladroit: “D’OH!”

The state agency DOH is getting praise from some editorial boards for its work in choosing the winning bids, but we’re not so sure the kudos are appropriate. Before we get into the reasons why, let’s us provide some background and make at least one affirmative comment about the selection process.

The reason for our intense interest in this matter was a tip we received several months ago. Some of the bidders, long before the application info was even released, had acquired property in various communities around the state. They had started building dispensaries. We thought to ourselves:  Who would drop several hundred thousand dollars buying and renovating buildings in upstate communities before being named a winner? Nobody would do that unless … unless they had inside knowledge and the process was rigged!

But as it turns out, it appears that none of the entities that did this were declared winners.  And that’s the good news. It’s one indication that the process might have been on the up and up.

But one affirmative sign doesn’t mean the matter is decided. In fact, affirmative signs have to be weighed against suspicious signs, right?  And as it turns out, there are a lot of anomalies.

For example, the Governor made a point of saying that local support was critical. He said he wasn’t going to place a facility in a community where people didn’t want it. That applied to both the growing facilities and the dispensaries.

But at least one of the winning bidders didn’t secure sites in the affected communities. They simply said they were going put their dispensaries in X, Y and Z counties.

Was it fair that almost all of the bidders went to extraordinary lengths to secure sites and local support before the deadline, while some of winning bidders simply wrote on their applications – “Dispensary sites to be determined later?”

Other bidders read the application and were under the belief that they absolutely had to propose a specific location and, in fact, secure an appropriate building along with letters of support from community officials. So, as fast as they could, they scoured communities for just the right facilities and then negotiated leases in which they had to make down payments and then they met with local officials and produced letters of support.

They weren’t delusional. They read the application requirements and they heard Cuomo say that local support would be “a determining factor.” But how could that be true if some winning bidders didn’t even bother to obtain local support? D’OH!

Another thing the Governor said was that he wanted the evaluators to drill down on each bidder and “separate facts and reality from the sales pitch.”  When we heard the governor say this, we were really encouraged. From our research into the topic, we know that there are a lot of players in this sector who are hustlers. They make all kinds of claims about their products and services and they say they are going to do great things for the communities in which they operate.

And on this specific matter of making promises, we’re stumped on staffing. Most experts who looked at the way the state set this up – with super tight controls on both supply and demand and the total market shared by five companies – and concluded that a growing and processing facility would employ no more than 20 people or so. Keep in mind that everything in agriculture today is largely automated. Keep in mind that a lot of big name players in the marijuana business took a pass on New York because they didn’t think it’d be profitable enough.

And yet some winning bidders are claiming that they’ll be employing as many as 250 people.  Think about that: How could one bidding team with extensive experience analyze the New York market with its tightest-in-the-nation restrictions and conclude that it would only employ a maximum of 20 people, and another bidding team look at the same set of facts and say that they’d hire 250 people?

Again the questions: Did the evaluators notice the wide difference in job creation estimates? Did they wonder about it? Or did they just give a high point score to the bidder who had the most inflated job creation claims? D’OH!

Lastly, there’s the not insignificant matter of lobbying. Cuomo made the point repeatedly that the process was going to be decided on the merits.  Cuomo speaks with disdain for lobbyists and during his first term he was pretty clear that there was no particular  “go to” firm in Albany. But as the second term approaches its second year, there are at least two firms making that claim. One is Park Strategies; the other is Bolton St. John. Both firms have climbed in the rankings. Both firms have lead players – Al D’Amato and Georgio DeRosa – whose names make people’s eyes roll.

D’Amato – no need to say more. But DeRosa needs some explanation: This is a guy who has been in business for decades in Albany.  We don’t know him, but we’re sure he has skills and abilities. We’re sure he works hard. There’s this problem, however. He’s the father of the Governor’s communications director. And people in Albany have been complaining for months that he constantly drops her name around town. Proud father talk it isn’t. It’s said that he’s blatantly using his daughter to advance his business.

To be fair, there’s zero evidence that the daughter has done anything but be a pit bull for Cuomo. Moreover, it should be noted and underscored that the accusations are coming mainly from people in the always jealous and snarky Albany lobbying world. At the same time, the accounts of DeRosa implying that he’s wired to the administration through his daughter are pervasive.

Call us naïve, but a man of DeRosa’s age and position in life should place his daughter’s career ahead of his own. He should do all he can to protect her integrity and reputation. Appearance is everything in Albany.

OK, we’ll step down from the pulpit, but not before saying the obvious one more time. D’Amato and DeRosa’s involvement in this process is creepy. The fact that they are crowing about having won the bids singlehandedly by lobbying DOH is even creepier. D’OH!

In the end, the way the med mar thing went down is more than a little unsettling. We don’t know how the Daily News or anyone can say the agency has great job. All we can say is: D’OH!

2 Comments leave one →
  1. Anonymous permalink
    August 4, 2015 3:25 PM

    Two of the winning bidders failed to designate sites for their dispensaries. That’ll be the source of appeals. For sure.

  2. Bob S. permalink
    August 5, 2015 12:45 PM

    You have totally missed the real “connect the dots” between the winning bids and the losers — the unions they were associated with. Buried in the Legislation authorizing the medmar grows/processing/distribution is a requirement that a bidder have a union tie-in. The unions were therefore put in the driver’s seat in negotiating deals. The better the union relationship with Cuomo, the better your chances at making it into the final 5. Example: SEIU, which despite some name calling is still very, very close to Cuomo, got one of the 5 slots. And unions like SEIU, you may have noticed, are major contributors and providers of “volunteers” to political campaigns.

    The giant money laundering wheel that is NYS politics just keeps on turning. The whole medmar industry in NYS has been turned into a money machine for the Democratic Party under Cuomo.

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