Judge rejects New York challenge to suit that’s delaying marijuana store openings

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A federal judge rejected New York’s effort to toss a lawsuit that’s been delaying the opening of recreational marijuana stores across the state, including in Brooklyn.

That means the indefinite wait for the issuance of 63 of the state’s planned 150 adult-use retail licenses will continue.

In November, a Michigan man named Kenneth Gay sued the state Office of Cannabis Management on behalf of his company, Variscite.

The suit alleges that the requirement that cannabis retail applicants have both a “significant presence” in New York and a criminal record for a marijuana-related conviction under state law creates irreparable damage to the company.

It’s one of several marijuana social equity programs Gay is challenging across the country, including Los Angeles.

Would-be CUARD license holders in New York must choose from among 14 geographical regions across the state when submitting their applications. Variscite’s top choice was Finger Lakes.

But in November, federal Judge Gary Sharpe granted the company a temporary restraining order that’s since been blocking licenses there and in four other regions: Brooklyn, Central New York, Mid-Hudson and Western New York.

The New York state attorney general’s office asked a judge to toss the lawsuit and also limit the areas in the state affected to only Finger Lakes.

In his ruling Tuesday, Sharpe rejected both requests.

New York is likely to appeal the challenge to its adult-use marijuana regulations to the federal Circuit Court of Appeals.

The state legalized adult-use sales in March 2021, but so far, only two licensed retailers have opened for business. Both are in Lower Manhattan.

In the meantime, an audacious illicit market continues to thrive, with as many as 1,400 unlicensed cannabis sellers across New York City alone.