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New York’s Cannabis Control Board will award retail licenses and site protection to the plaintiffs whose lawsuits have halted the state’s legal weed rollout since August – as long as a judge approves two settlement agreements filed in court on Tuesday.
If approved, the settlements will lift the injunction that’s prevented more than 400 Conditional Adult-Use Retail Dispensary licensees from opening their shops, and end a months-long freeze on the social equity program.
It will also mark the second and third time the state has resolved challenges to the constitutionality of its CAURD program by issuing licenses (Variscite NY One filed suit in September of 2022 and the CCB later settled and granted the company a retail license).
“New York continues to address its deficiencies in its legislation and regulation process by giving out cannabis licenses,” said Jeffrey Hoffman, a cannabis-focused attorney, on Tuesday. “That’s not really a good precedent to set … everybody who sues gets licenses.”
The proposed recent settlements stem from two separate – but intertwined – legal challenges.
The Coalition for Access to Regulated & Safe Cannabis sued the state in March to compel regulators to open up licensing for all retail dispensary applicants immediately. Coalition members include five of New York’s medical cannabis companies: Curaleaf, PharmaCann (dba Verilife), Fiorello Pharmaceuticals (dba FP Wellness or Rise), NYCANNA (dba the Botanist or Acreage NY), and Citiva Medical (dba Be.).
Then, in August, four service-disabled veterans who intended to apply for dispensary licenses – Carmine Fiore, William Norgard, Steve Mejia and Dominic Spaccio – filed suit.
The veterans argued that the CCB and Office of Cannabis Management improperly limited eligibility for the CAURD program by only allowing “justice-involved individuals” who own a profitable “qualifying business” to apply.
This, they said, violates the U.S. Dormant Commerce Clause and New York’s MRTA, which requires regulators to open the window for all adult-use retail dispensary applications “at the same time.”
Supreme Court Judge Kevin Bryant issued the injunction on the CAURD program in early August, and the Coalition joined the Fiore lawsuit a few days later.
The proposed settlement for the Fiore case requires the CCB to provide retail licenses to the four service-disabled veterans who filed the suit. It would also lift the CAURD injunction, and require the OCM to:
- Establish a taskforce for businesses owned by service-disabled veterans, and commit at least one OCM full-time employee to specialize in business development for those veterans.
- Create an educational campaign for service-disabled veterans who are interested in getting into the adult-use or medical markets.
- Develop a program to expand cannabis research into factors related to veterans’ health.
- Provide monthly updates to the plaintiffs on the progress of these efforts until they have been officially launched.
The settlement in this case also bars the CCB from issuing “any new or additional provisional CAURD licenses until April 1, 2024″ – but the regulators can greenlight the more than 400 currently licensed CAURDs to open their stores.
The proposed settlement in the Coalition’s case – which Judge Bryant is also overseeing – would require the CCB to give licenses (as long as certain requirements are met) to the five Registered Organization plaintiffs, who are applying to expand into adult-use retail.
That should happen at a CCB meeting on or before Dec. 8, 2023, according to the settlement.
Regulators would authorize these companies, once licensed, to open their first co-located adult-use dispensary by Dec. 29, 2023, and their second and third co-located shops by June 29, 2024.
However, Bryant has 10 days to approve these settlements, which means they may be tweaked in the meantime.
Jayson Tantalo, co-founder of the New York Cannabis Retail Association, agreed with attorney Hoffman that the state providing plaintiffs with licenses is problematic.
As someone who has applied for, but not yet received, a CAURD license, he also took issue with the stipulation that the CCB won’t license any more CAURD applicants until at least April.
“We have over 30 applicants in our association that are waiting … we are all on the verge of bankruptcy,” Tantalo said. “I’m so frustrated … I don’t have until April.”