New York cannabis regulators move to settle suits blocking new dispensaries

ALBANY — New York’s cannabis regulators have voted to settle two lawsuits that have blocked the opening of new recreational marijuana dispensaries across the state for months. If approved by the court, hundreds of people waiting to open their storefronts could move forward soon.

In August, a state Supreme Court judge in Ulster County ruled that the state’s Office of Cannabis Management needed to pause the Conditional Adult Use Retail Dispensary, or CAURD, license program under which all existing legal recreational dispensaries operate. A group of four service-disabled veterans had filed suit against the Cannabis Control Board and the OCM, alleging that they had ignored the letter of the law that established the recreational market by not allowing service-disabled veterans to apply for conditional licenses.

When the Marijuana Regulation and Taxation Act passed in 2021, it called for regulators to provide an interim, early-start license program open to people who had been convicted of marijuana-related crimes under prohibition, as well as to service-disabled veterans. But the OCM only allowed so-called ‘justice involved’ applicants who had prior marijuana convictions to apply to open a dispensary under the CAURD license.

Pending a decision, the Ulster County Justice Kevin R. Bryant said the CAURD licenses had to stop, and all applicants who were working towards opening a dispensary under the program had to pause their plans. Another suit, brought against the state regulators in March from a group of opponents including the existing medical marijuana dispensary companies and some out-of-state groups, made a similar argument to the veterans, but did not result in a pause of the CAURD program itself. The settlement approved Monday would settle both suits.

Now, if approved, 436 retail licensees who were waiting to move forward in their CAURD application will be allowed to move forward, including 23 dispensaries that were ready to immediately open storefronts before the court blocked them.

In a statement Monday, the Cannabis Control Board’s members said they were happy to put the lawsuits behind them and finish out the goals of the CAURD program; allowing those who had been harmed by prohibition to take the first chance at legally selling cannabis.

“Now that we have opened up licensing to all equity entrepreneurs and provided a clear pathway to participation in the adult-use market for our medical operators, we are able to continue to move this program forward together,” said Chris Alexander, executive director of the OCM. “New York’s cannabis market was designed to be the most equitable market in the world. We remain undeterred by the challenges of standing up that new market, and believe that the expansion of licensing opportunities and the inclusion of our medical operators will collectively ensure the success of the adult-use program and the expansion of the medical program.”

It’s been slow going for the state’s legal cannabis market. Approved in 2021, the original legislation laid out a timeline that would have seen dispensaries open before the end of that year, but then-Governor Andrew M. Cuomo, who had long been a cannabis skeptic and was embroiled in controversies ranging from his handling of nursing homes during the pandemic to accusations of sexually inappropriate behavior with a number of women, declined to appoint any regulators to the Cannabis Control Board. Dispensaries started opening in late 2022 under CAURD licenses, while regulators continued to draft the full slate of regulations and market restrictions.

Those final regulations were approved by the Control Board in September, with applications open now for a full license under the new regulations. No longer do applicants have to demonstrate they were harmed by marijuana prohibition in New York — almost anyone can move to open a dispensary or other marijuana business now. The CAURD licenses that have been the subject of so much litigation are already closed to new applicants, and will disappear by June, with CAURD licensees expected to apply to transition to full licenses.

While new dispensaries have been blocked, and fewer than 30 legal dispensaries operate across the state, marijuana growers have complained that over 600,000 pounds of their crops are sitting in storage for want of a place to sell them. Regulators made a move to relieve some pressure by green-lighting so-called “cannabis grower showcases,” storefronts authorized to sell pot and pot products from various producers on an interim basis without a permanent storefront.

One has opened in Carthage, Black River Supply Company, open half of the week from Sept. 27 to Dec. 31. The owner has told the Watertown Daily Times he intends to become a fully licensed recreational marijuana dispensary under the new, fully formed regulations.

Four such showcases have opened in Hudson, most of which opened in early October except for one that opened in early December. All four showcases will close on Dec. 31, but have applied for full licenses to operate as dispensaries as well.

Cannabis regulators have said they expect to award up to 1,000 retail licenses for dispensaries, and hundreds more licenses for growers, processors, distributors, cooperatives and so-called “microbusinesses” that handle every aspect from seed to final product in limited quantities. Applications for these full licenses will be taken until Dec. 18, with the first stores licensed under them expected to open early in the new year.


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