A recent setback has halted the opening of new cannabis shops in New York, as a judge has blocked cannabis regulators from advancing with the retail licensing process. This development represents a challenge to New York’s comprehensive initiative to ensure that individuals adversely affected by previous marijuana enforcement can benefit financially from its legalization.
The ruling stems from a lawsuit filed by a group of service-disabled veterans, who contended that a priority licensing program for entrepreneurs impacted by past marijuana-related legal actions was unconstitutional. As a result of the court’s decision, the state’s cannabis regulatory bodies are prevented from issuing new licenses and granting operational approval to those who are already in the process of setting up dispensaries.
Justice Kevin Bryant of the New York Supreme Court has justified the injunction by stating that proceeding with the cannabis licensing program without a court order could lead to immediate and irreversible harm. The ruling comes as a blow to New York’s regulatory plans.
The licensing program that was under dispute was designed to give preference to individuals with previous cannabis convictions or connections to such individuals, including immediate family members. Nonprofit organizations aiding previously incarcerated populations were also eligible for these licenses.
However, the program’s execution has been less successful than anticipated, with fewer than 20 storefronts operational almost two and a half years after marijuana was initially legalized in the state. This delay has contributed to the flourishing of an unregulated illicit cannabis market with numerous unlicensed shops.
Entrepreneurs, particularly those like the veterans who brought the lawsuit, are frustrated by the delay in the program’s implementation. This group of entrepreneurs, designated as “social and economic equity applicants,” includes individuals from communities disproportionately affected by past cannabis enforcement, minority-owned and women-owned businesses, as well as service-disabled veterans.
This legal battle isn’t the only one faced by New York’s cannabis regulatory agencies. A trade group previously filed a lawsuit arguing against the prioritization of entrepreneurs with cannabis convictions, claiming it exceeded their authority. Additionally, these agencies are facing another lawsuit from hemp beverage businesses challenging their emergency hemp regulations.
The potential consequences of the court’s decision are significant. Entrepreneurs who were poised to establish dispensaries, such as Osbert Orduña, are now unable to proceed. Orduña, a service-disabled veteran, had secured a license reserved for justice-impacted entrepreneurs and had begun deliveries, but his plans to open a storefront in Queens have been thwarted by the court order.
This situation has parallels in other cannabis markets that have implemented social equity programs, where differing interest groups can sometimes be pitted against each other, resulting in division. The court’s ruling is expected to adversely affect entrepreneurs who have secured licenses for retail, processing, or cultivation, thereby impacting the progress of these businesses.
The case is scheduled for a hearing on August 11th at the Ulster County Supreme Courthouse in Kingston, New York. Parties involved in the case must submit their filings by August 9th at 5 p.m.
