This post was originally published on this site.
A court injunction that bars New York cannabis regulators from approving conditional dispensary licenses will continue indefinitely, according to a judicial order filed in court Friday.
New York State Supreme Court Judge Kevin Bryant’s order prohibits the Cannabis Control Board and the Office of Cannabis Management from issuing new Conditional Adult-Use Retail Dispensary licenses, and from “processing, approving or investigating pending applications for CAURD.”
However, according to Judge Bryant’s decision, licensees who met all approvals before Aug. 7, 2023, will be allowed to open their stores. The order also states that the court may allow other CAURD dispensaries to open on a case-by-case basis, if state officials request permission from the judge.
“It was Defendants that decided to move forward and accelerate the CAURD program in the face of unresolved litigation and they were undeniably on notice of the alleged constitutional defects at issue,” Bryant wrote in his order. “Despite this notice, Defendants encouraged potential licensees to incur significant expenses in reliance on a program that Defendants knew was at issue in pending litigation.”
In his order, Judge Bryant encourages regulators to hurry up and start general licensing.
“Given the representations by Counsel for Defendants regarding the expected imminent approval of regulations and the Board opening an application process for all … this Court will continue to require regular appearances from counsel before the Court to provide updates and to ensure that appropriate progress is being made to ameliorate whatever impediments exist to the approval of a process that arguably will make these proceedings moot,” the order said.
Judge Bryant initially issued an injunction on the CAURD program Aug. 7, 2023, as part of a civil suit filed by service-disabled veterans who intend to apply for dispensary licenses. The Coalition for Access to Regulated & Safe Cannabis – a group representing some of New York’s medical cannabis companies, and is suing the OCM in a separate case – joined the lawsuit as a plaintiff last week.
According to the plaintiff’s complaint, 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.”
Arguing for the State of New York during a hearing at Ulster County Courthouse in Kingston last week, attorney Shannan Krasnokutski disputed the plaintiffs’ assertion that OCM essentially overruled state legislators by creating the CAURD program. The legislature approved a state budget, which allocated $50 million to the DASNY investment fund. That money will pay out loans to CAURD businesses for dispensary buildouts.
In his Friday decision to continue the injunction, Judge Bryant rejected Krasnokutski’s argument, writing that lawmakers had already passed legislation separate from the MRTA to create Adult-Use Conditional Cultivation, and Adult-Use Conditional Processing licenses.
“This Court is not persuaded by the argument that the legislature recognized the CAURD program by including funding in a budget bill and that this funding determination is the functional equivalent of specific statutory authority for the program,” Judge Bryant said.
Last week Judge Bryant scheduled a hearing regarding the injunction for Aug. 25. It’s not yet clear whether this order affects that court date.
An emailed statement from plaintiffs in the suit said the CAURD program kept social equity groups recognized in the MRTA from joining the legal market, while allowing others to launch their businesses.
“Every day that the adult-use program was limited to only the CAURD program was another day the MRTA-designated priority groups and New York State farmers were left out in the cold,” the statement said. “We remain steadfast in our responsibility to fight for all the social equity priority groups being overlooked right now by the OCM through the CAURD program.”