New lawsuit will prevent New York from issuing some marijuana retail licenses

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A federal judge ruled that New York regulators will have to wait to issue a number of adult-use marijuana retail licenses until a lawsuit filed by a Michigan-based applicant is resolved.

According to The New York Times, 63 of the 150 planned licenses in five areas – Brooklyn, Central New York, the Finger Lakes, the mid-Hudson area and Western New York – are impacted by the decision.

Eleven other areas of the state – including Manhattan, the Bronx and Queens – are not impacted by the decision.

The lawsuit, filed by Michigan-based Variscite NY One, is seeking an injunction against the state, the New York State Office of Cannabis Management (OCM) and the agency’s executive officer, Christopher Alexander.

The action 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.

Variscite, which applied for licenses in the five regions, is not significantly connected to New York.

Kenneth Gay, who has a 51% stake in the company, has a marijuana-related conviction in Michigan.

Judge Gary Sharpe granted the injunction Thursday, ruling that the defendants hadn’t demonstrated the legitimacy of the initial license requirements.

He also said that representatives of Variscite “demonstrated a clear likelihood success on the merits,” according to the Times.

Recreational marijuana sales in the state are scheduled to begin before the end of the year.

Plans to review nearly approved license applications on Nov. 21 will go ahead, according to the OCM.

“We don’t comment on pending litigation,” OCM spokesperson Freeman Klopott told Spectrum News 1.

“The Office of Cannabis Management is committed to the Marihuana Regulation and Taxation Act’s goals of including those impacted by the state’s enforcement of cannabis prohibition in the market that we are building and we are additionally committed to getting New York’s cannabis supply chain fully operational.

“The Cannabis Control Board will soon have before it applications for the Conditional Adult Use Retail Dispensary license which will start closing that supply chain.”