Turning Over A New Leaf In New York? Cannabis Dispensaries Await Movement After Crucial Lawsuit Settlement

The New York State Cannabis Control Board (CCB) achieved a critical breakthrough in overcoming a legal impasse obstructing the establishment of numerous cannabis dispensaries in the state.

What Happened: In a unanimous decision during Monday's meeting, the board endorsed a settlement agreement linked to an ongoing lawsuit, potentially paving the way for the removal of a court injunction that has disrupted the cannabis industry for almost four months, reported Syracuse.com.

Although the specific details of the settlement remain confidential, Linda Baldwin, General Counsel for the Office of Cannabis Management (OCM), confirmed that all board members thoroughly reviewed the agreement.

Why It Matters: The next pivotal step involves court approval, following which the existing injunction preventing the opening of more than 400 Conditional Adult-Use Retail Dispensary (CAURD) license holders' shop could be lifted. Consequently, the OCM could resume the issuance of new CAURD licenses.

See Also: New York Cannabis Regulators Settle Lawsuit With Michigan Plaintiff, How This Affects Upstate Retailers

Background

The legal standoff originated from a lawsuit filed by four service-disabled veterans challenging the state's licensing process. The plaintiffs, later joined by the Coalition for Access to Regulated & Safe Cannabis, accused the OCM and CCB of violating the Marijuana Regulation and Taxation Act (MRTA). Allegedly, the agencies favored a select group of "justice-involved individuals" with a profitable "qualifying business" in the retail dispensary license application process.

On August 8, New York State Supreme Court Judge Kevin Bryant issued an injunction preventing the issuance of new CAURD licenses and the opening of most dispensaries. A subsequent order by Bryant allowed pre-approved licensees before August 7, 2023, to open their stores, with the possibility of case-by-case exemptions for others.

However, disputes arose over the OCM's list of 30 businesses claiming exemption, leading Bryant to decide on individual rulings for exemption requests. Despite exemptions granted to some CAURD dispensaries, the legal wrangling cast uncertainty over New York's cannabis regulatory framework.

This is not the first lawsuit against OCM over licenses. In March of this year, a similar lawsuit was brought by the Coalition for Access to Regulated and Safe Cannabis (CARSC), for allegedly violating MRTA by reserving the first 150 retail licenses for social equity applicants. The group involved in the lawsuit includes at least four large marijuana companies: Acreage Holdings Inc ACRHF, Curaleaf Holdings Inc CURLF, Green Thumb Industries Inc GTBIF, and PharmaCann.

What’s Next: While the recent settlement marks a positive development by potentially lifting the injunction, industry stakeholders, such as Jayson Tantalo, co-founder of the New York Cannabis Retail Association, remain cautiously optimistic.

Tantalo expressed concern about the potential license awards going to the plaintiffs and stressed the need for transparency to avoid further legal challenges. “As long as the program opens up and we can move forward, I’m going to be happy,” he said. “No, I’m not optimistic that an official decision will be made before January.”

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