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For the second time in less than two years, New York’s Conditional Adult-Use Retail Dispensary (CAURD) program is on hold after a judge ordered a pause as part of a lawsuit brought by a group of service-disabled veterans that planned to pursue dispensary licenses.
The group says New York cannabis regulators violated the Marijuana Regulation and Taxation Act by opening the CAURD application process before general applications, among other claims.
The temporary injunction, which a judge ordered Monday, comes just a few months after state cannabis regulators settled a previous lawsuit, which had created a months-long injunction that prevented the Cannabis Control Board from issuing CAURD licenses in multiple regions of the state.
Meanwhile, OCM is defending several other lawsuits, which could also force major changes in the way regulators intended to launch and regulate New York’s legal cannabis industry.
Here is a list of active and inactive lawsuits plaintiffs have filed against state cannabis regulators since last year.
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Plaintiff(s): North Fork Distribution, Inc. (Cycling Frog); Sarene Craft Beer Distributors, LLC; Hemp Beverage Alliance, Inc.; One Stop Brew Shop, LLC.
Date filed: Aug. 4, 2023
Lawyer/law firm: Davidoff Hutcher & Citron LLP
Court: Albany Supreme Court
Complaint: Plaintiffs sued New York cannabis regulators after the Cannabis Control Board approved emergency regulations that effectively bans intoxicating hemp products.
Plaintiffs include Cycling Frog, a Washington state-based beverage company that sells beverages infused with hemp-derived cannabinoids; Serene Craft Beer Distributors, a Westchester County-based alcohol distributor which also sells hemp-derived cannabinoid beverages; One Stop Brew Shop, a Rochester craft beer retailer that also sells hemp-derived cannabinoid beverages and Hemp Beverage Alliance, Inc., a Colorado-based industry trade group.
In their complaint, plaintiffs say the measure the Cannabis Control Board passed for hemp products – including a required ratio of 15:1 CBD or other cannabinoids to THC in hemp infused products, among other rules – violates the MRTA. They argue the CCB acted in an “arbitrary and capricious” manner when they approved the rules, and failed to identify an “emergency” to justify the quickly enacted rules.
“There is no rationale given for the new requirements (CBD to THC ratio and per serving/package limits on THC) and, in fact … such requirements may actually prove to be dangerous to the public health, safety and welfare, the exact opposite of what Respondents are supposed to be trying to achieve,” the complaint reads.
Plaintiff(s) seeks: Temporary, preliminary and permanent injunction of the emergency regulations.
Status: Pending
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Plaintiff(s): Carmine Fiore, William Norgard, Steve Mejia and Dominic Spaccio
Date filed: Aug. 2, 2023
Lawyer/law firm: Clark Smith Villazor LLP
Court: Albany Supreme Court
Complaint: The lawsuit argues that the OCM and CCB improperly limited eligibility for the CAURD program when they created it last year by only allowing “justice-involved individuals” who own a profitable “qualifying business.”.
The suit identifies plaintiffs in the case – Carmine Fiore, Steve Mejia, William Norgard and Dominic Spaccio – as service-disabled veterans who planned to pursue adult-use dispensary licenses.
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.”
Plaintiff(s) seeks:
-An order declaring the CAURD program a violation of the MRTA and New York’s separation of powers doctrine.
-An order preventing regulators indefinitely from awarding or further processing any more CAURD licenses and/or from authorizing any more CAURD licensees to open adult-use retail dispensaries.
Status: Pending with an active injunction.
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Plaintiff(s): Cannabis Impact Prevention Coalition, LLC; Cannabis Industry Victims Seeking Justice, LLC; Renne Barchitta; Edwin De La Cruz; Eric R. De La Cruz; Phil Orenstein; Philip McManus; Robert Caemmerer; Richard D. McArthur; Ronnie Hickey; John and Jane Does 1-15 and Corporations 1-15.
Date filed: June 20, 2023
Lawyer/law firm: Bartels & Feureisen LLP
Court: Albany Supreme Court
Complaint: The lawsuit argues that the OCM improperly promulgated rules for medical cannabis; adult-use packaging, labeling, marketing and advertising and testing labs.
Plaintiffs include New York-based anti-cannabis advocacy groups: Cannabis Impact Prevention Coalition, LLC. and Cannabis Industry Victims Seeking Justice; along with several individual members of these groups.
The suit claims New York cannabis regulators and government officials “are attempting to orchestrate a marijuana trafficking operation utilizing taxpayer funds and public employees and resources. Their blatant disregard of every major objective embodied in federal marijuana law directly conflicts with, and otherwise stands as an obstacle to, Congress’s mandate that production, possession and distribution of Schedule I drugs, including marijuana, be prohibited unless approved by federal law.”
Plaintiff(s) seeks: Enjoinment of rules the OCM passed for medical cannabis and labeling in order to bring them into compliance with federal law.
Status: Pending
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Plaintiff(s): 125th Street Business District Management Association, Inc.
Date filed: April 26, 2023
Lawyer/law firm: Law Office of Daniel Blumenstein
Court: New York County Supreme Court
Complaint: The lawsuit argued that the Dormitory Authority of the State of New York (DASNY) and the OCM improperly sited a future CAURD dispensary at 248 West 125th Street.
The Plaintiff – 125th Street Business District Management Association, Inc. – is a corporation organized under the State of New York laws and provides supplemental services to the 125th Street Business Improvement District.
According to the complaint, the CAURD storefront falls within 500 feet of schools and community facilities. Siting an adult-use dispensary there, plaintiffs say, violates OCM’s guidance.
Plaintiff(s) seeks:
-Enjoinment and permanent restraining of state officials from implementing or enforcing the licensing of 248 West 125th Street as an Adult Use Retail Dispensary;
-Alternatively, invalidating the licensing of 248 West 125th Street as an Adult
Use Retail Dispensary
-Alternatively, enjoining and permanently restraining state officials from implementing or enforcing the licensing of 248 West 125th Street as an Adult Use Retail Dispensary
Status: Dismissed
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Plaintiff(s): Coalition for Access to Regulated & Safe Cannabis
Date filed: March 16, 2023
Lawyer/law firm: Feurstein Kulick LLP
Court: Albany Supreme Court
Complaint: The lawsuit alleges unconstitutional overreach and policymaking, egregious abdication of duties, and actions that put New Yorkers’ health and safety at risk.
The plaintiff is The Coalition for Access to Regulated & Safe Cannabis, which describes itself as “an unincorporated trade association” composed of registered organizations, parties that planned to pursue a dispensary license when the application window first opened, and physicians whose practices have suffered due to the state’s “neglect” of its medical cannabis program.
The group argues that the OCM violated the MRTA by starting the CAURD application process ahead of general cannabis retail applications.
Plaintiff(s) seeks: A ruling to compel state regulators to open up licensing for all retail dispensary applicants immediately.
Status: Pending
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Plaintiff(s): Variscite NY One, Inc.
Date filed: Sept. 26, 2022
Lawyer/law firm: Kernkamp Law
Court: United States District Court Northern District of New York
Complaint: Variscite filed suit in September, after the state – according to the complaint – found the entity was ineligible for a CAURD license because the company is 51% owned by Kenneth Gay, an individual who has no significant connection to New York and who has a cannabis conviction in Michigan. An individual named Jeffrey Jensen owns the other 49%.
CAURD rules require an applicant must have been convicted of a cannabis crime in New York and have a “significant presence” here.
This violates the Dormant Commerce Clause, the lawsuit argued, because the clause prohibits states from passing legislation that discriminates against or excessively burdens interstate commerce.
Plaintiff(s) seeks:
-An injunction preventing the state from processing more CAURD applications
-A declaration that the CAURD program violates the Dormant Commerce Clause
Status: Resolved