New York’s cannabis industry has been rapidly evolving since the legalization of adult-use marijuana in March of 2021. The state has seen a surge in applications for licenses and a high demand from consumers. However, this growth has also brought about legal challenges and delays.
Recently, two lawsuits have been settled that will significantly impact the rollout of new retail stores in New York. These lawsuits, one brought by disabled veterans and the other by a coalition of MSO cannabis companies, have caused delays and controversy in the industry.
With the settling of the lawsuits New York looks to start filtering through over 400 CAURD ( Conditional Adult-Use Retail Dispensary) licenses to get the social equity program back on track.
🚨BREAKING: NYS Supreme Court lifted the injunction that prevented the Office from processing or reviewing CAURD licenses. pic.twitter.com/YV3L4EHXcs
— NYS Office of Cannabis Management (@nys_cannabis) December 1, 2023
Veterans Lawsuit
The first lawsuit, brought by disabled veterans, challenged the state’s prioritization of individuals with prior marijuana-related convictions for licensure. The veterans’ group argued that this prioritization was unconstitutional and unfair.
The settlement requires the Cannabis Control Board (CBB) to provide retail licenses to the four service-disabled veterans who filed the suit.
According to Syracuse.com the settlement also requires:
- Establish a taskforce for businesses owned by service-disabled veterans, and commit at least one OCM full-time employee to specialize in business development for those veterans.
- Create an educational campaign for service-disabled veterans who are interested in getting into the adult-use or medical markets.
- Develop a program to expand cannabis research into factors related to veterans’ health.
- Provide monthly updates to the plaintiffs on the progress of these efforts until they have been officially launched.
The settlement also states that the CCB cannot issue “any new or additional provisional CAURD licenses until April 1, 2024″ excluding the over 400 CAURD licenses, that have already been waiting for months on a resolution to the lawsuits.
Coalition “MSO” Lawsuit
The second lawsuit, brought by the Coalition for Access to Regulated & Safe Cannabis (CARSC), challenged the state’s restrictions on medical dispensaries transitioning into the recreational market. The coalition argued that these restrictions hindered fair competition and prevented established businesses from entering the adult-use industry.
As part of the settlement, the five Registered Organizations (ROs) who were involved in the lawsuit will be granted provisional adult-use retail licenses. The five companies are Acreage Holdings, PharmaCann, Green Thumb Industries and Curaleaf.
While the settlement of these new lawsuits is certainly a step forward for the New York cannabis industry, as it will finally allow for new retail locations to open. However, what about the businesses and individuals who have been waiting for months for a resolution to these legal challenges?
These delays and uncertainties have caused significant financial strain for many, with some businesses barely staying afloat. The settlement may not fully compensate for the losses incurred during this time, and the wait until April 2024 for new provisional licenses is still a long one.
Additionally, with the limit on issuing new provisional licenses until April 2024, it makes it even tougher for hopeful applicants. Jayson Tantalo, co-founder of the New York Cannabis Retail Association, told Syracuse.com “We have over 30 applicants in our association that are waiting … we are all on the verge of bankruptcy,” Tantalo said. “I’m so frustrated … I don’t have until April.”
It is also worth mentioning that while these settlements aim to create a fair and competitive market, there are still concerns about illegal storefronts operating in New York. Efforts are being made to combat them, but these establishments continue to take away potential customers and revenue from licensed retailers.
“Our top priority is to grow and expand New York’s legal cannabis industry while cracking down on the illicit storefronts that continue to plague communities. With this settlement behind us, hundreds of new licenses can now move forward, new stores will open, and consumers can legally buy safer, legal, tested cannabis products from New York-based entrepreneurs and small businesses. Now, we’re putting the illicit storefronts on notice: competition from legal dispensaries is about to skyrocket, and we won’t hesitate to crack down on bad actors who break the law.” said Gov. Kathy Hochul in a press release.
It is extremely important to note that the delays in granting retail licenses has caused irrevocable harm to many in the burgeoning New York cannabis industry. The fact that the state is, in some cases, years late in approving retail storefronts has a ripple effect felt through the entire supply chain. Everything from cultivation to manufacturing to the retail itself is affected.
There is one thing for sure, these lawsuits and setbacks have done nothing to help people that were applying for social equity licenses and actually quite to the contrary it has damaged many of them.
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