Judge’s stay on lawsuit means New York cannabis licenses still on hold

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New York won’t issue any more adult-use cannabis retail licenses for at least another two weeks as the latest legal challenge to the state’s tortuous marijuana legalization experiment is resolved.

After hearing arguments on Friday from state cannabis regulators and attorneys representing a group of military veterans shut out from applying for a retail license, New York Supreme Court Justice Kevin Bryant gave both parties two weeks to work out an arrangement.

If they cannot, the parties will appear again in court in late August, Bryant ruled.

“I need some reasonable minds with some good ideas that can make everyone flourish,” the judge said.

Additional arguments are due Aug. 15, Bryant ruled.

The OCM did not immediately respond to an MJBizDaily request for comment about Friday’s ruling.

In the meantime, a temporary injunction will remain in place preventing the state’s Cannabis Control Board and Office of Cannabis Management (OCM) from issuing any new licenses.

New York legalized recreational marijuana sales in March 2021.

But since then, a combination of an audacious illicit market and a painfully slow process for would-be licensees to receive permits and open for business have hampered the industry.

Then came the lawsuit that led to Friday’s hearing.

The plaintiffs in the case, who claim they’re seeking to enter the industry, filed a lawsuit Aug. 4 because they don’t meet the requirements for a conditional adult-use retail dispensary (CUARD) license.

They allege in the suit that limiting licensure to justice-impacted individuals violates their state and federal constitutional rights.

In a packed courtroom in Kingston, the plaintiffs, the state and existing CUARD licensees made “compelling arguments about the harm” caused by the status quo as well as the ongoing indefinite delay in awarding more permits, said David Holland, a New York City-based attorney and NORML board member who is not involved in the case.

“The outcome is far from certain at this time,” he told MJBizDaily via email.

“Either way, this lawsuit has had considerable impact on the rollout of New York’s legalized cannabis market.”

In an e-mailed statement to MJBizDaily, the Cannabis Association of New York – which represents mostly small businesses in the state – said it was “severely disappointed” by the judge’s decision and called on lawmakers to return to Albany for a special session to specifically codify the CUARD program.

“This injunction continues to threaten tens of thousands of jobs, thousands of businesses, and the entire industry as a whole,” according to the statement.

“Not only will there be no new licenses issued, but those unopened businesses already granted a CAURD license must stay closed.”

The trade group added that “we also need to seriously consider a full emergency regulations package because the public’s health and the public’s safety is in danger with the thousands of illicit shops.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.