Judge Blocks Licenses For Some NY Cannabis Dispensaries

A Federal Jdge has temporarily barred New York issuing the First batch of Retail Licenses for Recreational Cannabis, in Five Regions, pending resolution of a Lawsuit filed by a Michigan-based company Challenging the program’s Selection requirements. The Decision from the Federal District Court in Syracuse, spells trouble for the NY’s plan to begin Recreational Cannabis sales as soon as this year. The Judge, Gary L. Sharpe, said NY could Not issue Conditional Licenses to operate Dispensaries in: Brooklyn, Central New York, the Finger Lakes, the Mid-Hudson area, and Western New York, while the Case is Pending. His decision affects 63 of the 150 Licenses that NY planned to issue to Businesses and Individuals who met a Narrow criteria.

The Case, brought by Variscite NY One, argues that Requirements that the First Applicants have a Cannabis-related Conviction under New York state Law, and significant ties to tNY State, violate Constitutional Protections of Interstate Commerce. New York legalized Cannabis for Nonmedical use by Adults 21 and over in March 2021. Lawmakers set out to build a Market that included People convicted of Crimes or otherwise harmed by Decades of Policies targeting those who Grew, Sold, and used Cannabis.

Regulators accepted Applications for the First 150 Retail Dispensary Licenses in August and September. People who had been Arrested on Cannabis-related Charges in New York, but Not Convicted, were Excluded, as were People who had only Federal or Out-of-State Convictions. To show a significant presence in New York, Applicants could use a Majority Owner’s Residence or Corporate Headquarters.

Variscite argued that the State could achieve its Goals by other means, such as establishing Business Incubators and Job Training programs. But the company said it would face Irreparable Harm if it was forced to wait for the Next wave of Licenses while other Businesses got a head start.

Judge Sharpe said the State, represented by the Attorney General’s Office, had Not made a convincing Case for how the Legalization Law and Regulations were narrowly tailored to serve a Legitimate purpose. He noted that Variscite “has also demonstrated a clear likelihood of success on the merits.”

Variscite did Not Qualify for One of the First Licenses, according to the complaint, because the company is based in Michigan, where Kenneth Gay, its Majority Owner, was Convicted of a Cannabis offense. But the company applied anyway, listing the Five regions affected by the Court’s InjunctioC as preferred Locations on its Application.

Eleven other Regions, including: the Bronx, Manhattan, Queens, Staten Island, and Long Island, were Not affected.

The First Licensees are eligible for Loans, from a $200 million Fund NY set up to Secure Storefronts and cover Renovations. A total of 884 Individuals and Businesses applied to the program, and 19 Nonprofit groups applied for 25 additional Licenses.

Freeman Klopott, the main Spokesman for the Office of Cannabis Management, which oversees Licensing for the State’s Cannabis and Hemp programs, said the Office’s Governing Board and the Cannabis Control Board, would move ahead with pPans to Review the First Licenses recommended for Approval on Nov. 21st.










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