On Monday, New York’s cannabis regulatory body announced a significant breakthrough in resolving two legal challenges that have been impeding the launch of cannabis retail outlets for several months. This resolution paves the way for over 400 holders of the Conditional Adult-Use Retail Dispensary (CAURD) licenses to inaugurate their ventures, following a prolonged delay caused by these legal disputes.
The lawsuits targeted the methods used by the New York Cannabis Control Board (CCB) in allocating licenses for the state’s inaugural recreational cannabis outlets. These licenses were initially earmarked for individuals with past marijuana convictions. One lawsuit was initiated by a coalition of military veterans, while another was brought forward by various medical cannabis firms aspiring to enter New York’s promising retail cannabis sector.
In August, a temporary halt on the opening of additional dispensaries licensed under the CAURD scheme was ordered by state Supreme Court Justice Kevin Bryant. Bryant’s ruling pointed out that the CCB had exclusively reserved the initial batch of retail dispensary licenses for those with cannabis-related offenses, neglecting a broader array of social equity candidates as specified in the 2021 legislation that legalized adult-use cannabis in New York.
Subsequently, a limited number of businesses were permitted to commence operations, but only a fraction, fewer than 35, have started serving customers throughout the state. Meanwhile, in excess of 400 enterprises with approved CAURD licenses remained in a state of uncertainty amid the ongoing legal proceedings.
During a critical meeting of the CCB on Monday, the board ratified a settlement negotiated by state attorneys with the legal representatives of the plaintiffs in both lawsuits.
“The New York State Cannabis Control Board’s endorsement of this settlement signifies a pivotal advancement in our endeavor to develop a cannabis market that is both inclusive and diverse,” stated CCB Chair Tremaine Wright in an agency release. “With this settlement’s ratification, those hindered by the injunction can now progress in establishing their outlets, moving us closer to achieving our objectives.”
Regulators Set Stage for Additional License Applications
The settlement coincides with the CCB’s recent decision to open a new phase for cannabis license applications, encompassing cultivation, distribution, and sales. This move is anticipated to introduce over 1,000 new licenses into New York’s recreational cannabis arena, which has experienced growth limitations due to the sluggish endorsement of licensed retailers.
“This development marks a step towards addressing concerns raised by equity entrepreneurs and medical stakeholders who felt sidelined,” commented Chris Alexander, executive director of the New York Office of Cannabis Management. “With the opening of licensing to all equity entrepreneurs and a defined route for medical entities to join the adult-use market, we can collectively drive this program forward.”
The CCB acknowledges that the settlement allows more than 400 CAURD license holders to advance with their store openings. Michelle Bodian, a partner at the cannabis law firm Vicente LLP, expressed optimism, stating “It’s a positive turn for the NY cannabis industry.” She revealed that while the state can’t issue additional provisional CAURD licenses until April, the existing 436 provisional licensees can now work towards obtaining their final licenses. Additionally, five registered organizations are slated to transition one store each to the adult-use market by December 29, 2023.
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