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A New York State Supreme Court judge has temporarily barred state regulators from issuing conditional cannabis retail licenses and said the state may not approve any licensed dispensaries that aren’t currently operational to open.
Judge Kevin Bryan issued the injunction Monday as part of a civil suit filed by service-disabled veterans who intend to apply for dispensary licenses.
The ruling prevents the Office of Cannabis Management and Cannabis Control Board from issuing any more Conditional Adult-Use Retail Dispensary licenses until a scheduled hearing on Friday. At that hearing, plaintiffs will request Bryant continue the injunction until their case is adjudicated. Additionally, CAURD licensees that haven’t yet opened for business are barred from opening until Friday and could be until the case is resolved.
Evidence filed in court shows “that there is genuine urgency and that immediate and irreparable injury, loss or damage will result unless the defendants … are restrained before a hearing can be had,” said Bryant’s order, which was filed in Albany Supreme Court Monday.
Plaintiffs in the case include Carmine Fiore, Steve Mejia, William Norgard and Dominic Spaccio. In their complaint, the group identified themselves as service-disabled veterans that planned to pursue adult-use dispensary licenses.
A spokesman for the plaintiffs declined to comment on the injunction Monday afternoon.
The complaint, which plaintiffs filed on Friday, argues that the OCM and CCB improperly limited eligibility for the CAURD program – only allowing “justice-involved individuals” who own a profitable “qualifying business” – when they created it last year.
In court documents, plaintiffs argue the CAURD program violates the U.S. Dormant Commerce Clause, and the plain text of New York’s MRTA, which requires the CCB to open the window for all adult-use retail dispensary applications “at the same time.”
State cannabis regulators recently settled a CAURD-related lawsuit, which argued the program violated the Dormant Commerce Clause. That litigation led to a lengthy halt on CAURD licenses in multiple regions.
NY Cannabis Insider ran a story about a year ago in which some legal experts warned the MRTA “same time” language makes the CAURD program vulnerable to legal challenges.
Plaintiffs filed the case less than two weeks after the CCB approved a measure to drastically expand the CAURD program – which was initially limited to 150 businesses – to 463 licensees.
Monday’s injunction could raise existential questions for licensed cannabis retailers, cultivators and processors in New York. Cultivators and processors have been struggling for more than a year to unload weed they’ve been unable to sell, due to a dearth in retail outlets.
“I feel this will be devastating for growers,” said Joann Kudrewicz, CEO of cultivation company Ravens View Genetics and chair of CANY’s Cultivation Committee. “We were just starting to see the light at the end of this tunnel.”
Kudrewicz and other growers were elated last month after the CCB approved the concept of Growers’ Showcases – events that would resemble farmers’ markets, where growers and processors could sell their products at pop-up events.
Monday’s decision could further darken business prospects for already-struggling growers, including Kudrewicz, she said. The first dispensary that was going to carry her company’s products was scheduled to host a grand opening on Aug. 12. If the judge extends the injunction past Friday, the store likely won’t open.
“It feels pretty dim and dire,” Kudrewicz said. “We were very hopeful for the late summer and fall and opportunities to sell and move product, so we can only hope that this injunction doesn’t have legs long-term.”
The slow rollout has even been a drag on non-plant-touching ancillary businesses that serve the cannabis industry, like lawyers, accountants and real estate brokers.
Hours after the judge issued the injunction, Paula Collins, a New York CPA and tax attorney dedicated to the cannabis industry, said the action is unfortunate but likely could have been avoided if state cannabis regulators had approved locations and started the general business application process sooner.
“We’re about 840 days away from when the MRTA was signed into law,” Collins said. “What all of us want is a fully functional regulated marijuana industry for the state of New York.”