The New York State Cannabis Control Board (CCB) has made significant progress in resolving a legal dispute that has hindered the establishment of cannabis dispensaries in the state. The board recently endorsed a settlement agreement related to an ongoing lawsuit, potentially leading to the removal of a court injunction that has disrupted the cannabis industry for nearly four months.
While 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. The next crucial step involves court approval, which, if granted, could result in the lifting of the existing injunction that has prevented the opening of over 400 Conditional Adult-Use Retail Dispensary (CAURD) license holders’ shops. This would allow the OCM to resume issuing new CAURD licenses.
The legal standoff originated from a lawsuit filed by four service-disabled veterans who challenged the state’s licensing process. The plaintiffs, later joined by the Coalition for Access to Regulated & Safe Cannabis, accused the OCM and CCB of favoring a select group of “justice-involved individuals” with profitable “qualifying businesses” in the retail dispensary license application process, thereby violating the Marijuana Regulation and Taxation Act (MRTA).
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. Although pre-approved licensees before August 7, 2023, were allowed to open their stores, the possibility of case-by-case exemptions for others was also considered. Disputes arose over the OCM’s list of 30 businesses claiming exemption, leading Bryant to decide on individual rulings for exemption requests. This legal wrangling cast uncertainty over New York’s cannabis regulatory framework.
The recent settlement is a positive development as it potentially paves the way for the lifting of the injunction. However, 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 emphasized the need for transparency to avoid further legal challenges.
While the resolution of this legal impasse is a step in the right direction, it is important to ensure a fair and transparent process for the issuance of cannabis licenses in New York. The cannabis industry has the potential to contribute significantly to the state’s economy and provide opportunities for social equity applicants. As the court’s decision on the settlement awaits, stakeholders in the industry eagerly anticipate the resumption of licensing and the expansion of the cannabis market in New York.
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