New lawsuit filed over New York marijuana business licensing

An applicant in upstate New York seeking a marijuana cultivation and processor license is suing regulators in the latest legal challenge to alleged “priority” status in the state.

Tree Hill Innovations, operated by Marguerite ikol of Saugerties, filed a petition claiming certain applicants were given “extra priority” by submitting up to three applications in a lottery designed to vet requests, according to the Albany Times Union.

The lawsuit against the state’s Cannabis Control Board and Office of Cannabis Management alleges regulators changed licensing application rules last year in an “arbitrary and capricious” manner without informing the public, the newspaper reported.

According to the suit, Mikol has invested more than $700,000 to establish operations, including the purchase of 67 acres in Ulster County.

New York, which launched adult-use sales in late 2022, has since been besieged by cannabis-related lawsuits regarding a variety of claims challenging:

• Social equity licensing, which led to a temporary injunction and a subsequent settlement.
• Residency requirements.
• The state’s ban on third-party advertising for cannabis retailers.
• The licensing prioritization of those harmed by marijuana arrests, which one suit alleges is discriminatory.
• New rules governing hemp-derived cannabinoids.
• Licensing delays that shut out multistate operators from entering the adult-use market.

The litigation has prompted a tortuous rollout of New York’s recreational market that recently led Gov. Kathy Hochul to describe the process as a “disaster.”

Despite early projections from Hochul, other politicians and regulators that New York would have hundreds of retailers operational by now, only 117 stores and delivery providers are licensed, according to the latest state statistics.