New York court keeps order blocking new adult-use cannabis retail licenses

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The court order blocking new entries into New York’s struggling adult-use cannabis market remained in force after a Friday hearing in Ulster County Supreme Court – despite a new appeal filed by the state attorney general to lift the stay.

However, 30 applicants who filed for their permits in time might be able to open for business.

Several hundred more would-be recreational marijuana entrepreneurs, including both small businesses and major multistate marijuana operators, must wait at least a few more weeks to see how an ongoing legal challenge to the state’s Conditional Adult Use Recreational Dispensary (CAURD) program plays out.

The latest kink in the rollout of New York’s legal marijuana market started Aug. 2, when a group of four service-disabled military veterans sued the Office of Cannabis Management (OCM) and the Cannabis Control Board, alleging the CUARD program is unconstitutional.

The veterans claim they want to open dispensaries across the state, including in Manhattan and Queens.

But because they are not “justice impacted individuals” with a qualifying arrest, they do not meet the criteria for a CUARD license.

As of Friday, only 23 licensed adult-use stores are open for business in the entire state, according to the OCM. Of those, five are delivery-only.

Separately, a lawsuit brought by a group of MSOs calling themselves the Coalition for Access to Regulated and Safe Cannabis (CARSC) remains pending.

An Aug. 18 injunction on granting any new licenses, imposed by Supreme Court Judge Kevin Bryant, remains in place.

In that hearing, Bryant declared the CUARD program in “legal jeopardy.”

The judge said it’s likely that a final ruling will find the CUARD program violated the state’s March 2021 marijuana legalization law and that the OCM’s refusal to award licenses to the defendants likely caused “irreparable harm.”

More arguments are scheduled for Sept. 15.

Separately, the state formally appealed Bryant’s injunction in an Aug. 24 court filing.

The injunction does not apply to anyone who’d completed most of the process by Aug. 7.

The state on Tuesday released a list of 30 would-be retail operators who met that criteria.

During a roughly 35-minute court appearance on Friday, attorneys for the plaintiffs argued for the release of documents that would outline the state’s enforcement strategy against the estimated 2,000 illicit cannabis sellers currently operating in the state.

The plaintiffs also objected to several of the 30 licenses identified as sufficiently in-progress by Aug. 7.

One is in a town that has banned dispensaries, another is too close to a school and six are delivery-only and should not be allowed to operate temporary brick-and-mortar retail locations, they argued.

Bryant took no immediate action on the plaintiffs’ objection.

Attorneys for other retail applicants who argued their clients should not be subject to the injunction have until Sept. 5 to make their case, Bryant also ruled.