This post was originally published on this site.
A Central New York business owned by a white man has filed a lawsuit against New York’s cannabis management agency accusing it of racial and gender bias.
The business, Valencia AG of Jamesville, claims the “social and economic equity” provisions in the state’s licensing of cannabis businesses violate the U.S. Constitution’s equal protection clause by giving preference to women and people of color. The lawsuit, filed this week in U.S. District Court in Syracuse, names the state’s Office of Cannabis Management, its director and its board members as defendants.
While there have been other lawsuits challenging the state’s cannabis licensing process, this appears to be the first accusing the New York cannabis agency of unconstitutional equal protection bias, according to legal experts in the state’s cannabis field.
One legal expert told syracuse.com the language in the suit contains what he called “dog whistles” that could be intended to inflame racial passions.
Valencia AG, which lists an office address on Harvest Hill Road in Jamesville, has filed an application for a state license to open what the state calls a microbusiness, which can grow, process and sell small amounts of marijuana. Its CEO and principal owner is William Purcell, who the lawsuit identifies as a white man.
Valencia was recently ranked at number 2,042 in a state cannabis office list of 2,232 potential applicants, behind many businesses who qualified under the social equity provisions. There are roughly 1,800 social equity applicants ranked higher on what was supposed to be a “randomized” list, the lawsuit notes. The agency in fact gave extra weight to social equity applicants in the process, the lawsuit says.
The lawsuit also calls attention to a provision in the cannabis office regulations that sets a goal that at least 50% of business licenses should be awarded to social equity applicants, defined primarily as minority- or women-owned companies. It also cites provisions that set lower licensing fees for those who qualify as social equity applicants.
“The defendants designed and implemented regulations and procedures that have favored and given preference to selected races and genders and have discriminated against any person who is a white man,” the lawsuit says.
The lawsuit also contains a section declaring that the members of the OCM board, as well as its executive director, are exclusively Black and/or female. That section includes a lengthy discussion of the skin pigmentation of some of the agency leaders.
“The situation of having only minorities and women, and no white man, in the key positions associated with the OCM is statically aberrant to such a degree as to lead to a reasonable, fair conclusion that the defendants were selected to their aforementioned positions on the basis of race and gender,” the lawsuit says.
The lawsuit was filed by Syracuse lawyer Robert Purcell, who is William Purcell’s father. Robert Purcell said he has a “1%” share in the company.
Robert Purcell characterized the cannabis agency’s social equity provisions as “stacking the deck, loading the dice — the game was rigged.”
The lawsuit also cites recent court rulings, including the U.S. Supreme Court’s decision invalidating affirmative action in college admissions.
“It’s head-scratching to me how in this day and age (the state cannabis office) can so brazenly discriminate on the basis of race and sex,” Robert Purcell told syracuse.com. “What are you people doing?”
Purcell also notes that cannabis agency officials have recently indicated they will likely only award a few hundred of the business licenses in the near future, indicating that those further down the list, like Valencia, have “little or no chance” at getting one.
Valencia has invested time and money in its application, including a non-refundable $1,000 fee to the state. It also has a lease on its proposed location, which was required for license applicants who do not own their property.
The lawsuit asks the court for punitive damages and compensation for “lost profits.” It also asks the court to order the cannabis to revoke all existing social equity licenses, stop issuing licenses based on race and gender going forward, make all license fees equal in the future.
A spokesman for the state Office of Cannabis Management said the agency does not comment on pending litigation.
A lawyer with experience with New York’s cannabis regulations said he thinks Valencia will face challenges of some of its claims.
The core complaint in the lawsuit, said lawyer Ben Rattner, is Valencia’s low position in the “queue” of potential licensees.
“The claim assumes he would have received a higher position in the queue if not for the alleged discriminatory provisions,” said Rattner, a cannabis and litigation partner at the Cermele and Wood law firm in White Plains. “But that could be hard to prove. He could have just been unlucky.”
Rattner also notes to discussion of skin color and the claim that the state provisions amount to “quotas” are what he called “dog whistles” intended to evoke inflames feelings about racial bias. The state social equity provisions, Rattner notes, are outlined as goals, not quotas.
Joe Rossi, head of the Syracuse-based cannabis office of the consulting and lobbying firm Park Strategies, agreed that some of the language in the lawsuit, including the descriptions of members of the cannabis board, are “awful and atrocious.”
But he said his discussions with legal expert shows there could be some merits to parts of the lawsuit.
“Obviously, the (state cannabis board) has been sued before,” he said. “So we’ll just have to see where this one goes.”
Don Cazentre writes for NYup.com, syracuse.com and The Post-Standard. Reach him at dcazentre@nyup.com, or follow him at NYup.com, on Twitter or Facebook.