NY Cannabis Regulators Sued For $300M Over Unrealized Surveillance Contract

New York state cannabis regulators and officials are being sued by a defunct Illinois security company over allegations of misrepresentation and issues related to an unrealized surveillance contract.

What Happened

America Smart Cities has filed a $300 million lawsuit against the Dormitory Authority of the State of New York (DASNY), the New York State Liquor Authority, Office of Cannabis Management, Dr. Emory Alexander and Reuben McDaniel III.

The lawsuit was first filed in the New York Country Supreme Court but has since moved to federal court, reported Green Market Report's Adam Jackson citing Law360.

America Smart Cities said in a complaint it was entitled to a no-bid contract for a security project, as per McDaniel's promise. In return, Arkansas-based McDaniel, who served as president and CEO of DASNY and the board member for the New York State Liquor Authority, OCM, and Alexander were to "receive ownership, current compensation, and future compensation from ASC," alongside profits from the NY Projects.

Once these didn't materialize, the plaintiff was notified that it was not selected for the project.

Read Also: Lawsuit Alleges Bias In New York Cannabis Equity Program, Lawyer Slams ‘Absurd And Offensive’ Claims

The Background

The lawsuit said ASC was approached in 2021 with an assignment to install equipment at over 300 cannabis facilities and near university dormitories statewide – a project for which the company spent over $500 000 from October 2021 to June 2023, to prepare. ASC CEO Thomas Bowling was allegedly assured by Alexander and McDaniel, that the company would be granted a no-bid contract for the project, according to Green Market Report.

ASC also claimed that McDaniel told third parties that the company had been chosen as a contractor for the New York projects.

However, in 2023, following an internal correspondence, DASNY agents determined "they were unsatisfied with the potential profits that they would be entitled to from the illegal cut of the NY Projects that they were attempting to negotiate," the complaint said.

In addition to $300 million in punitive damages, ASC is seeking $8.5 million in compensatory damages citing lost business opportunities as well as reimbursement of money spent on preparation for the project.

After New York's inspector general dismissed a complaint by ASC as "meritless" following an investigation, McDaniel and Alexander opted to move the case to federal court, according to Green Market Report.

Read Next:

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