No new dispensaries: Judge pauses rollout of NY’s legal weed industry

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By Dan Sears

The slow rollout of New York’s legal weed industry is coming to an indefinite halt after a state Supreme Court judge released an order temporarily blocking the state from issuing new licenses or allowing new dispensaries to open.

The ruling comes in response to a lawsuit filed last week against the state Cannabis Control Board and the state Office of Cannabis Management by a group of veterans who said they aspire to open their own cannabis shops. Judge Kevin R. Bryant issued the restraining order on Monday.

The veterans allege that cannabis regulators overstepped their authority by using a social equity program that wasn’t sufficiently aligned with state law to launch the retail market. This Conditional Adult Use Retail Dispensary program prioritizes people with past marijuana convictions and their family members for the first dispensary licenses, rather than the broader groups of applicants that were identified for potential priority consideration under the Marijuana Regulation and Taxation Act, the law that legalized marijuana in New York in 2021.

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This law mentions service-disabled veterans and minority- or women-owned businesses as groups that could be prioritized for licenses, in addition to those who were affected by the enforcement of cannabis prohibition.

The plaintiffs in the case are four disabled veterans who state that they would qualify as priority applicants under the social equity provisions in the Marijuana Regulation and Taxation Act, but do not qualify under the more limited criteria of the CAURD program.

When CAURD was first launched, state cannabis officials said 150 dispensary licenses would be issued to qualified applicants. That number has since grown to 463, although only a handful of dispensaries have opened across the state since retail sales began in late December.

This lawsuit isn’t the first legal challenge New York’s social equity program has faced. Last year, the state was temporarily banned from issuing licenses in certain regions, including Brooklyn, in response to a lawsuit brought by a Michigan resident who didn’t qualify for the program. A coalition of cannabis entrepreneurs eager to enter New York’s legal industry sued the state over its social equity program again in March. That group included large marijuana companies that already have medical licenses in New York and want to open up sales to the general public.

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The latest judge’s order comes as state cannabis officials are seeking to accelerate the rollout of the legal industry and address the concerns of growers, who have complained that there are not enough legal shops open to buy their products.

A hearing on the case is scheduled for Friday. The Office of Cannabis Management has yet to respond to a request for comment.

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