Lawsuit Against Cannabis Regulators in New York: Legal Experts Share Opinions

When a coalition of plaintiffs, including New York medical cannabis companies, sued the Office of Cannabis Management and the Cannabis Control Board on Thursday, some in the state’s marijuana industry were disappointed but few were surprised.

The Coalition for Access to Regulated and Safe Cannabis alleges in its complaint that OCM acted outside of its authority by creating a conditional adult retail dispensary license and asked a judge to declare CAURD’s license unconstitutional and outside the agency’s legal authority.

“It was inevitable. I’m surprised no one has applied so far,” said Paula Collins, a New York-based tax lawyer who specializes in the cannabis industry.

When OCM began the application period for CAURD, which was open to individuals involved in justice who also met other criteria, as well as certain non-profit organizations, the office violated clear language in the MRTA, which reads: “Original retail cannabis dispensary for The adult license application period should be open to all applicants at the same time,” Collins said.

Collins also noted that Thursday marked 715 days since he was governor. Andrew Cuomo signed the MRTA into law, but the slow rollout of the program in the state has sapped the resources of entrepreneurs who are still waiting to start a business.

“The definition of insanity is to keep doing the same thing and expect different results,” Collins said. “I hope this lawsuit will force the state to stop this madness.”

Hinman Straub’s attorney Matt Leonardo also said he believes the New York medical cannabis companies will end up suing because it’s likely OCM never had the legal authority to create CAURD.

Although the legislature passed legislation and Gov. Kathy Hochul signed laws providing for conditional licenses to cultivators and processors, CAURD did not go through the legislative process.

“Plaintiffs point out that the legislature had the ability to act and create this program,” Leonardo said. “I think the plaintiffs are arguing that the legislature implicitly did not authorize the office to create this kind of program.”

Leonardo said that the fact that OCM announced this month that it was doubling its CAURD licenses without going through any approval process could bolster the plaintiff’s case, as the office’s actions could be seen as arbitrary and capricious.

However, it’s likely that the lawsuit won’t have much of a practical impact on the New York adult cannabis market, Leonardo said, because lawsuits can go on for years, during which time OCM may continue to issue CAURD licenses and eventually reschedule them. . to full licenses. Even if the OCM is required to open up the application process to everyone, there is probably nothing stopping them from giving preference to applicants who have applied for the CAURD program.

Cheryl Murray Powell, attorney and COO of the nonprofit JUSTÜS Foundation, said the lawsuit is disappointing because the CAURD program was created to fulfill the MRTA’s intent: to repair the harm done to New Yorkers as part of the criminalization of cannabis. .

“The allegation that the CAURD licensing program is unconstitutional and that these benefits should not be given to persons involved in justice; I think this is contrary to the intentions of the MRTA,” said Murray Powell. “The legislative purpose of the MRTA is to provide remedies to those who have been harmed.”

“I think the most discouraging thing for me — after seeing this lawsuit — is the lack of empathy, compassion and sense of community,” Murray Powell said.

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