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A court injunction stemming from a lawsuit against New York’s Conditional Adult-Use Retail Dispensary program has barred hundreds of retail licensees from opening their doors and now many are applying for general licenses.
The Office of Cannabis Management licensed more than 450 CAURD businesses before Judge Kevin Bryant ordered the injunction on Aug. 8, which restricts most licensees from opening their stores, and prevents the OCM from processing more applications.
However, amid the ongoing litigation, the OCM launched the general licensing process on Oct. 4.
Due to the continuing injunction – and concerns that the judge may find the CAURD program unconstitutional, nullifying its licenses – many CAURD businesses who already applied for, and in many cases received, retail licenses are embarking on yet another application process.
“We advised everybody to reapply if they had that ability to do so,” said Jayson Tantalo, a CAURD applicant who operates Flower City Hydroponics and co-founded the New York Cannabis Retail Association – formerly the NY CAURD Coalition.
While the OCM hasn’t publicly stated that CAURD licensees should apply for general licenses, staffers there are telling members of the CAURD Coalition that they should make this move, Tantalo said. Tantalo and his wife, business partner and president of the CAURD Coalition, Britni Tantalo, applied in the general licensing round two days after it opened, he said.
The uncertainty of how long the injunction will drag on and the possibility that the judge could rule against the CAURD program are weighing heavily on everyone’s minds, Tantalo said, including people who have applied for an exemption to the court injunction.
During the first court proceeding for the lawsuit that led to the injunction, Judge Bryant said he would exempt from the enjoinment CAURD businesses that met all approvals before Aug. 7.
Judge Bryant is currently providing exemptions for some of these businesses on a case-by-case basis – he’s exempted at least five so far: Elevate ADK in Saranac Lake, Air City Cannabis in Rome, (delivery only), Terp Bros in Astoria, Queens, Gotham Buds in Harlem, and CONBUD in New York City’s Lower East Side.
“Even those that are stuck in the injunction, waiting for their pending [exemption], they’re reapplying,” Tantalo said. “If it’s deemed unconstitutional and there’s a block in transitioning and they didn’t pivot,” they’re in trouble, Tantalo said.
It’s a well-founded concern, said Lauren Rudick, founder and managing principal of Rudick Law Group, a law firm that is heavily focused on cannabis issues.
“I see a big risk in not reapplying,” Rudick said. “The potential that CAURD goes away or that general retail happens first, defeating the first-to-market opportunity,” is real, she said.
Paula Collins, a New York tax attorney dedicated to the cannabis industry, agrees that the uncertain timeline the lawsuit and injunction present means that CAURD licensees who are serious about opening their stores should apply for general or social and economic equity licenses in the current round of applications. Collins also pointed out that the OCM is giving similar advice.
The application fee is $1,000 for general applicants and $500 for social and economic equity applicants. Collins said that if OCM waives that fee for CAURD licensees and applicants, it could cause legal problems if Judge Bryant rules the CAURD program unconstitutional – because then those CAURD licensees could still be eliminated.
“I’m not even sure that we are safe with the check box indicating whether someone was a CAURD applicant,” Collins said, referencing a question that appears in the general license application. “I suppose the people reading the applications could simply ignore that, and not let it factor into consideration of the application.”
That’s the position in which Samuel Coronado finds himself – likely filing yet another application after receiving a CAURD license, because he cannot open his store due to the court injunction.
The Buffalo-based owner of MARY JANES – A LEGACY 2 LEGAL DISPENSARY, received a CAURD license and had closed on a location in his hometown when the injunction came down. Coronado requested an exemption but doesn’t know when lawyers representing the OCM will put his exemption request before the court – or if they will at all.
“I actually emailed the OCM at the beginning of this week, and they basically told me that they couldn’t give me any information on where I stand,” Coronado said – adding that the OCM “told me I’d be better off if I apply again, which I think I’m going to do.”
For now, Tantalo said, CAURD licensees who are reapplying are experiencing a familiar lack of communication from the OCM – emails going unanswered, and receiving no information about whether their CAURD status will give them a leg-up in the general application process.
“It’s the same nonsense as before, there’s so many unknown factors and changes,” Tantalo said. “Nobody really knows what to expect or what to anticipate.”