Recent litigation a ‘positive development’ for NY’s hopeful cannabis business owners (guest column)

Carmine Fiore served eight years with the US Army and NY Army National Guard and went on to serve the New York City Fire Department. He is also the chair for the Veterans Committee of the Cannabis Association of New York. The views and opinions expressed in this article are those of the author, and do not necessarily reflect the views or positions of NY Cannabis Insider nor the Cannabis Association of New York.

The recent litigation against the NYS Office of Cannabis Management and the Conditional Adult-Use Retail Dispensary program (CAURD) is a positive development for New Yorkers waiting to apply for a cannabis business license.

The litigation seeks to enforce the language of the Marijuana Regulation and Taxation Act (MRTA), which mandates that the Cannabis Control Board (CCB) has the authority to approve the opening of new license application periods, and when new or additional licenses are made available pursuant to this chapter, the initial adult-use cannabis retail dispensary license application period shall be opened for all applicants at the same time.

The Office of Cannabis Management opened up the CAURD license application period solely to those with past cannabis convictions, which is a clear violation of the MRTA and discriminatory against those without such convictions.

While some may view this litigation as an attempt to stall the licensing process, it has the ability to jumpstart the cannabis industry in New York. By opening up the application process to all eligible applicants, the industry will be able to benefit from a more diverse pool of talent and ideas, ultimately leading to a stronger and more competitive market.

It Is important to note that state regulators, lobbyists, political analysts and many lawyers drafted the MRTA and the adult-use cannabis regulations with the intention of preventing out-of-state operators from coming in and grabbing a majority share of the New York cannabis industry. This was done to protect small and mid-size businesses, and to ensure that the benefits of the industry would be felt by New Yorkers. So we can all stop the fear mongering of out of state operators coming in, turning the NY cannabis industry into “California 2.0.”

Additionally The Coalition for Access to Regulated & Safe Cannabis (the party that initiated the litigation), is mostly composed of RO’s (NYS registered medical maryjuana companies).Which directly explains the motives of this litigation. And here goes:

On Dec. 29, 2023, the RO’s come “online” to the adult-use side of the market, which means they are able to turn three retail dispensaries into “hybrid” locations. But we must also remember these RO’s are the only vertically integrated companies in NY, which means they can also process and distribute to adult-use dispensaries across the state.

So, knowing this information, these RO’s don’t want the OCM spending the majority of 2023 issuing 300 CAURD licenses – that may or may not open – when they should be issuing licenses to the general public. By opening the pool of qualified dispensary applicants, it will ensure that NY has more than 300 dispensaries ready to sell their product by that date.

The skeptics will say that this litigation is so the RO’s can flood the shelves with their products, not giving the small cultivator and processor a chance. That’s just not the case. NY regulators have introduced into the draft adult-use cannabis regulations that all dispensaries must allocate at a minimum 40% of the shelf/menu to small- and mid-size farms and processors. Again, New York has taken firm legal action to ensure the success of small- and mid-size businesses.

If successful, the litigation has the potential to open up the application process to everyone and prioritize social and economic equity applicants, as well as those with past cannabis convictions. This would bring the state into compliance with the MRTA and ensure that the cannabis industry operates in a manner that is consistent with the statute’s objectives.

The recent litigation against the NYS Office of Cannabis Management and the CAURD program is a positive development for New Yorkers waiting to apply for a cannabis business license. It seeks to enforce the language and intent of the MRTA, which prioritizes social and economic equity applicants while preventing out-of-state operators from dominating the market.

By opening up the application process to all eligible applicants, the industry will benefit from a more diverse pool of talent and ideas, ultimately leading to a stronger and more competitive market.

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