New York’s cannabis conundrum: Licenses stalled amid legal challenges

August 10, 2023 Rob Abruzzese

Photo: Steve Helber/AP

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More than two years since New York legalized marijuana, the rollout of its recreational market remains mired in challenges. A recent court order blocking the issuance of new cannabis licenses is the latest in a series of setbacks, underscoring the complexities of launching a state-regulated cannabis market.

The New York Supreme Court’s decision to temporarily halt the state Office of Cannabis Management (OCM) from awarding new licenses comes after a lawsuit filed by four veterans. The plaintiffs argue that the state’s move to prioritize licensing for individuals with past cannabis convictions over other minority groups, including disabled veterans, violates the state law.

Supreme Court Justice Kevin Bryant’s ruling underscores the concerns surrounding the licensing program’s rollout. He highlighted the potential “immediate and irreparable injury, loss, or damage” should the program continue as planned. The central contention remains: the state’s effort to ensure those harmed by past marijuana enforcement could financially benefit from its legalization.

However, New York’s intentions have hit roadblocks. The ambitious program, designed to prioritize the first cannabis dispensary licenses to entrepreneurs with past convictions or their immediate family, hasn’t delivered as expected. Nearly 2-and-a-half years post-legalization, fewer than 20 licensed storefronts are operational. None of those 20 licensed stores are located in Brooklyn.

This delay has fueled a thriving gray market, with countless unlicensed shops capitalizing on the legal void.

The slow pace has spurred frustration, evident from the recent lawsuit brought forth by the veterans. Under the 2021 legalization law, the definition of “social and economic equity applicants” includes communities disproportionately affected by cannabis enforcement, minority-owned businesses, women-owned businesses, and service-disabled veterans.

This isn’t the first challenge for the state’s cannabis regulators. Earlier in March, a trade group also filed a lawsuit claiming that the prioritization of entrepreneurs with cannabis convictions was an overreach. Additionally, a separate lawsuit from hemp beverage businesses is challenging the OCM’s emergency hemp rules.

The battle, however, is far from over. A hearing is scheduled for Aug. 11 at the Ulster County Supreme Courthouse in Kingston.

State Sen. Jeremy Cooney, Chair of the Senate’s Subcommittee on Cannabis, expressed disappointment with the ongoing legal tussle. “We must focus on awarding non-conditional licenses, which will prioritize social equity candidates and allow more businesses to open,” he stated.