'Corporate Behemoths' Are Behind Lawsuits Hindering New York's Cannabis Rollout, Says State Senator

New York State Senator Liz Krueger (D) says the core of the numerous challenges facing the state's beleaguered cannabis program are being caused by large corporations who seek to dominate the industry.

"This is really a story about big business trying to shut out small evolving businesses," said Krueger, reported Spectrum News.

Krueger, who wrote the Marijuana Regulation and Taxation Act (MRTA), which effectively legalized adult-use cannabis, recognized that regulators also have made mistakes, but insisted that corporations played a significant role in the extremely slow market roll-out and have been the brains behind the many lawsuits.

"These attacks that are being privately funded by secret organizations, both the lawsuits and frankly a PR campaign throughout the state, it's really disturbing," Krueger said.

Krueger and assembly member Crystal People Spokes wrote an opinion piece on the topic in which they clarified the intentions of the legislation and defended the Office Of Cannabis Management (OCM) saying it was acting lawfully.

“The intent behind the language at issue in the lawsuits, which states that all initial retail license applications be opened “at the same time,” was not to impose an administrative straitjacket on the OCM,” they wrote. “It was intended to ensure that equity would lead, rather than prioritizing existing medical operators who already have dispensaries and who in every other state — before New York — were allowed to start selling first.”

Among medical marijuana operators set up in New York, are the following public companies: The Cannabist Company Holdings Inc CCHWF (previously known as Columbia Care Inc.), Curaleaf Holdings CURLF, MedMen Enterprises MMNFF, and Acreage Holdings ACRHF.

Lawsuits Chaos

In March, a lawsuit against the OCM was brought by the Coalition for Access to Regulated and Safe Cannabis (CARSC), for allegedly violating the MRTA by reserving the first 150 retail licenses for social equity applicants. The group involved in the lawsuit includes at least four large companies, including Acreage Holdings, Curaleaf Holdings, Green Thumb Industries GTBIF, and PharmaCann.

Then, in August a similar lawsuit was filed on behalf of four military veterans by attorneys from NYC firm Clark Smith Villazor, LLP. The four veterans, Carmine Fiore, William Norgard, Steve Mejia and Dominic Spaccio are accusing the OMC of violating the MRTA by prioritizing licenses for individuals with prior drug convictions.

"They are not out of bounds at all. They are following the law. They are using the discretion we intentionally gave a state agency as we do on almost every law with every state agency,” Krueger said in defense New York's equity-based program.

"We wrote a law that means we shouldn't fail so they're doing everything they can to try to make sure we do because if we get it right here, other states are going to say we can do it that way also."

Other lawsuits are slowing down the launch of the marijuana market. The latest was filed in September by e-commerce platform Leafly Holdings LFLY.

Meanwhile, illicit cannabis operators continue to flourish throughout the state as legal operators pay exorbitant taxes. 

See Also: EXCLUSIVE - NY Cannabis Market Optimism Prevails Despite 'Absurd' Taxes, Illegal Operators, Lawsuits

CARSC Coalition Responds

Rev. Kirsten John Foy, a spokesman for the CARSC Coalition responded to Krueger’s op-ed.

"The Senator's reckless comments only serve to reinforce the barriers that OCM has erected to prevent well-deserving, legally entitled priority classes and communities of color from entering the adult-use cannabis market,” Foy said. “Her comments especially demean and disregard those service-disabled veterans who were compelled to file suit to vindicate their rights, reducing them to the status of puppets.”

Photo: Benzinga edit with images by Holi Concentrates on Unsplash and Wikimedia Commons