Marijuana MSOs sue New York over adult-use retail license delay

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Multistate operators with New York medical cannabis licenses sued regulators on Thursday in an attempt to gain quick entry into the state’s adult-use marijuana market.

The MSOs are currently shut out from New York’s legal recreational market.

In a lawsuit filed in state Supreme Court in Albany, the Coalition for Access to Regulated and Safe Cannabis (CARSC) alleges that the Office of Cannabis Management and the Cannabis Control Board violated New York’s 2021 legalization law – the Marihuana Regulation and Taxation Act (MRTA) – when the two agencies reserved the first 150 adult-use retail licenses for social equity applicants.

That move left out the state’s 10 vertically integrated “registered organizations,” which include some of the country’s biggest cannabis companies, including Curaleaf Holdings, Green Thumb Industries, Acreage Holdings and PharmaCann.

Those four companies are all members of the CARSC, according to The (Syracuse) Post-Standard’s NY Cannabis Insider, which first reported the suit.

Two other hopeful adult-use retail applicants and a Long Island MMJ provider are also participants in the lawsuit.

“Rather than perform the tasks required by the MRTA – which would promote a safe and regulated cannabis industry for medical patients and adult-use consumers alike – CCB and OCM have improperly assumed the role of the Legislature to impose their own policies over those of New York’s elected officials and, by extension, their constituents,” the lawsuit alleges.

The suit names OCM Executive Director Chris Alexander and CCB Chair Tremaine Wright, blaming their policies for, among other things, the proliferation of unlicensed cannabis stores in New York City.

Aaron Ghitelman, a spokesperson for the OCM, said the agency could not comment on pending litigation.

Though New York Gov. Kathy Hochul earned plaudits from social justice advocacy organizations when state regulators announced that “justice involved individuals” would get first dibs at the adult-use market, the state has been slow to issue retail dispensary licenses.

As of earlier this month, the CCB had issued 66 permits. But only four adult-use retailers have opened for business, three of them in Manhattan.

A fourth dispensary, William Jane, opened Thursday in Ithaca.

Further complicating matters is a separate lawsuit, filed by a Michigan man who alleges he was denied a New York state license because of a requirement that favors in-state residents over out-of-staters.

That suit has delayed the issuance of at least 63 permits in five of the state’s 14 geographic regions, including Brooklyn.

It’s still not clear when the MSOs that obtained one of the state’s few and precious MMJ licenses will be eligible to apply for adult-use permits.

The chair of at least one company, Curaleaf’s Boris Jordan, recently suggested that litigation could be coming when he said New York’s social equity program went “too far.”

New York’s approach stands in contrast to other states, including New Jersey, where MSOs that held MMJ licenses – including Curaleaf – were the first to open for adult-use sales.

Chris Roberts can be reached at