Members of anti-marijuana groups sue New York regulators

A group of New York residents filed a lawsuit against the state’s marijuana regulatory agencies and their top officials in the latest legal challenge to the fledgling adult-use market.

The lawsuit, filed July 29 in state Supreme Court in Albany County, alleges New York’s Cannabis Control Board, Office of Cannabis Management, other state agencies and certain officials caused “wrongful expenditures or other unlawful, illegal or unconstitutional disbursements of state funds.”

The charges stem from the state financing licensed adult-use retailers when the production and sale of marijuana is federally prohibited.

The lawsuit seeks a permanent injunction to the licensing program established by the Marijuana Regulation and Taxation Act (MRTA), which former Gov. Andrew Cuomo signed into law in 2021.

Plaintiffs and defendants

According to the lawsuit, the plaintiffs include Renee Barchitta, Robert Caemmereris, Edwin and Eric De La Cruz, Ronnie Hickey, Richard McArther, Philip McManus and Phil Orenstein.

According to court documents, the plaintiffs are members of the Cannabis Impact Prevention Coalition (CIPC) and Cannabis Industry Victims Seeking Justice (CIVSJ).

The CIPC aims to prevent negative environmental, health, public-safety and social impacts of marijuana. The CIVSJ advocates for “victims of the marihuana industry.”

Other defendants include:

• Amanda Hiller, acting commissioner of the tax department.
• Cannabis Control Board Chair Tremaine Wright.
• Dormitory Authority of the State of New York (DASNY).
• Felicia Reid, who in June was appointed executive deputy director and acting executive director of the Office of Cannabis Management after the resignation of Chris Alexander.
• New York Social Equity Cannabis Investment Fund.
• New York State Department of Taxation and Finance.
• Social Equity Servicing Corp.

The lawsuit also takes issue with funding mechanisms created through the fund and DASNY to support social equity licensees under New York’s controversial Conditional Adult-Use Retail Dispensary (CAURD) program.

The CAURD program prioritized “justice-impacted” individuals who could demonstrate harm caused by the war on drugs.

‘Preferential state funding’

“We are not aware of any business or industry (that) receives this kind of preferential state funding, especially one that sells addiction for profit,” David Evans, spokesperson for Cannabis Industry Victims Seeking Justice, said in a statement sent to MJBizDaily.

“The cannabis of today is very high in potency and causes mental illness, addiction and a host of other social and medical conditions.”

The lawsuit claims the social equity program for New York’s cannabis industry will spend as much as $200 million – including $50 million in tax funds – to help CAURD licensees find real estate and secure leases.

However, major funding shortages and few financed projects under the social equity program have been widely documented.

According to the lawsuit, the fund had secured 24 leases for cannabis businesses but placed only 16 tenants through the end of December.