The Debacle Called NY Cannabis Market: State Supreme Court Halts New Retail Licenses Following Veterans' Lawsuit

On Monday, a state Supreme Court judge ordered a temporary halt on the issuance of new Conditional Adult-Use Retail Dispensaries (CAURD) licenses in New York.

What Happened:  Justice Kevin Bryant ruled that without a court order blocking the licensing program “immediate and irreparable injury, loss or damage will result,” reported Politico’s Mona Zhang.

The judge sided with a group of veterans who filed a lawsuit against the Office of Cannabis Management (OMC) last week, arguing the violation of the Marijuana Regulation and Taxation Act (MRTA), which legalized cannabis, by prioritizing licenses for individuals with prior drug convictions.

The complaint argues 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.”

See Also: New York's Cannabis Program Is A 'Disaster' And Regulators Should 'Prepare For War,' Lawyer Says

Why It Matters: The court blocked the state regulators from issuing not only new licenses but also from granting operational approvals to those who already have licenses and are close to opening up dispensaries. 

This already affected entrepreneur Osbert Orduña, a service-disabled veteran who won a license reserved for justice-impacted entrepreneurs and was close to opening a marijuana shop. 

In other cannabis markets with social equity programs like Illinois and Michigan, “special interest groups have found ways to pit one social equity group against the other,” Orduña said in an interview with Politico. “Divide and conquer.”

Democratic Senator Jeremy Cooney expressed disappointment with Monday’s court order saying that the New York cannabis program roll out has already been slow and that the regulators should focus on the issuance of non-conditional licenses.

Not As Simple As That

On the other hand, it seems the problem is not so simple. Carmine Fiore, William Norgard, Steve Mejia and Dominic Spaccio who served their country collectively for more than two decades, are plaintiffs in the lawsuit and should logically be in a priority group.

“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,” said Fiore, who served eight years in the U.S. Army and New York Army National Guard. “We are also the only priority group in the (law) that achieved its status by helping communities.

It is no secret that New York’s marijuana market has been dealing with more bumps in the road than any other state. This is even not the first lawsuit against OMC regarding the 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 ACRHF, Curaleaf Holdings CURLF, Green Thumb Industries GTBIF and PharmaCann.

See Also: 'We Have To Fight, They Came At Us': Empire Cannabis Plans To Sue NY State Following Police Raid

What’s Next: A hearing is scheduled for Aug.11 at the Ulster County Supreme Courthouse in Kingston. Regarding the New Your cannabis market in general, it is safe to assume it's going to be a while before things start running smoothly. 

The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.

Photo: Benzinga edit with images from Gautam Krishnan and 2H Media on Unsplash