Federal Judge Blocks New York Regulators From Issuing Pot Shop Licenses

A federal judge in New York has ruled that the state will issue permits to cannabis retailers in five territories after a Michigan-based company filed a lawsuit challenging the process of granting the much-coveted permits. U.S. District Court Judge Gary Sharp on Thursday filed by Variscite NY One Inc., a company denied a retail sales license by New York’s Cannabis Control Office (OCM). issued an injunction in response to the lawsuit filed.

In August, the OCM announced that the first Conditional Adult Retail Store (CAURD) licenses would be issued to businesses led by individuals previously convicted of marijuana-related offences. Regulators are currently processing applications and plan to begin retail sales of adult-use cannabis by the end of the year. Successful applicants will receive assistance from the He Social Equity Cannabis Investment Fund of $200 million, created to help finance the leasing and equipment of up to 150 recreational marijuana dispensaries statewide.

“Relying on people who have experience in that business, as well as being involved in the judiciary, means finding many applicants who have gone through some significant challenges to open and run a successful business. We believe we will,” said the OCM executive.Director Chris Alexander told Politico when the policy is announced. “We just took a different approach.”

Dispensing license reserved for those with weed beliefs

To be eligible for a cannabis retail license, applicants must be based in New York, as evidenced by the personal or business address included in the application. Additionally, the principal applicant or relative must be convicted of a cannabis-related offense in New York. Persons arrested but not convicted and those convicted federally or out of state are not eligible.

Variscite is majority owned by Kenneth Gay, a Michigan marijuana convict. However, the application was denied by his OCM. [51%] Owned by an individual convicted of cannabis under Michigan law” and “has no material connection to New York” According to local media reports.

The company argued that restricting licenses to applicants convicted in New York state would discriminate against out-of-state applicants and violate provisions of the U.S. Constitution protecting interstate commerce. Filed a lawsuit challenging the license eligibility criteria.

Ruling Affects Five New York Districts

In a ruling handed down Thursday, the judge said the state, represented by the attorney general’s office, made a compelling argument for how New York’s cannabis legalization laws and regulations are narrowly tailored to serve a legitimate purpose. He pointed out that Variscite “clearly demonstrates the potential for success even in terms of merit.”

Sharp also issued a temporary injunction barring OCM from issuing retail cannabis licenses in the state’s Finger Lakes, Central New York, West New York, Mid-Hudson, and Brooklyn areas. Of his 150 expected CAURD licenses, about 63 were suspended by judgment. Licenses issued in 11 other territories, including the Bronx, Manhattan, Queens, Staten Island and Long Island, were not affected by the injunction.

Although the injunction was limited to five named territories, David C. Holland, a partner at Prince Robel and a member of the law firm’s Business Litigation and Cannabis Practices Group, said the lawsuit would eventually end. He said it could affect a wider area of ​​New York.

“This could have wide-ranging implications statewide, as the same state-specific contact and conviction requirements were imposed on the 14 areas of New York designated to host CAURD clinics, and other We cannot apply for a conditional license because of the state’s efforts to protect and promote the emerging cannabis industry,” Holland wrote in an email. I am high times.

In a statement, OCM spokesman Freeman Klopott declined to comment on the matter or Sharp’s injunction.

“We do not comment on pending litigation. , and we are also working to make New York’s cannabis supply chain fully operational.” Kropott. “The Cannabis Control Board plans to submit soon before applying for a conditional adult retail sales license to begin closing its supply chain.”

The spokesperson also added that the OCM will continue to consider the first license recommended for approval at its next meeting on November 21. new york times.

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