Military Veterans Who Sued New York Cannabis Regulators Reach Settlement & Tax Relief For NYC Pot Shops

Military veterans who sued the Office Of Cannabis Management (OCM) in August, which provoked a temporary injunction on the issuance of new social equity retail licenses have finally reached a settlement.

The settlement comes some five weeks after New York regulators opened the licensing application period to all individuals and businesses.

According to a letter provided to MjBizDaily, the plaintiffs’ lawyer Brian T. Burns noted that the parties had reached an agreement and informed the Supreme Court, which has not yet decided on the pending summary judgment motions.

“Finalization of any settlement is contingent on the drafting and execution of a formal settlement agreement acceptable to all parties, approval of the settlement by the defendant-respondent New York Cannabis Control Board, and the settlement agreement being so ordered by Supreme Court,” the document reads.

Background

In the lawsuit filed by NYC firm Clark Smith Villazor, LLP, Carmine Fiore, William Norgard, Steve Mejia, and Dominic Spaccio accused the OMC of violating the Marijuana Regulation and Taxation Act (MRTA), which legalized cannabis, by prioritizing licenses for individuals with prior drug convictions.

The complaint argued that officials did not follow a provision in the law requiring that “the initial adult-use cannabis retail dispensary license application period shall be opened for all applicants at the same time.” Under the law, all “social equity” applicants should have been prioritized, not just those with prior cannabis convictions, the veterans argued.

“Service-disabled veterans are the only social equity group in the law not born into priority status, but a group to which anyone could belong,” Fiore, who served eight years in the Army and New York Army National Guard said at the time. “We are also the only priority group in the (law) that achieved its status by helping communities.”

See Also: Provoked By 'Got Weed?' Ad, NY GOP Lawmaker Presents Bill Prohibiting Cannabis Billboards

Cannabis Tax Relief Measure Reaches Governor

Meanwhile, lawmakers sent a cannabis tax relief measure to Governor Kathy Hochul (D), reported Marijuana Moment. The measure that would grant tax relief to cannabis businesses in New York City, which they are not entitled to under federal law, got the green light from the State Senate in June.

Though obliged to pay taxes, cannabis companies do not benefit from certain federal tax deductions under the Internal Revenue Code 280E as they are viewed to be engaged in "trafficking in controlled substances (within the meaning of Schedule I and II of the Controlled Substances Act)." The bill, S7508, from Sen. Luis R. Sepúlveda (D) was drafted to change that and is now being sent to the Governor’s desk.

This bill's summary notes that "deduction for business expenses, incurred by taxpayers authorized by the Cannabis Law to engage in the sale, distribution, or production of adult-use cannabis products or medical cannabis, for purposes of the unincorporated business tax (UBT), the general corporation tax (GCT), and the corporate tax of 2015, commonly referred to as the business corporation tax (BCT)."

See Also: Cannabis Regulatory Update: NY Sen. Fights For Distressed Marijuana Farmers & More In MI, SD, OK

Photo: Benzinga edit with images by Tingey Injury Law Firm via Unsplash and Square Frog from Pixabay