Cannabis Dispensaries In New York Just Got Hit With Major Delay

If you were looking forward to legal marijuana dispensaries opening soon in New York State, there has been a major setback. Certain regions have been barred from receiving licenses due to a lawsuit. On Thursday, November 10, 2022, a judge blocked 63 licenses from being awarded around the state.

Getty Images

Almost half of the initial 150 dispensary licenses can't be distributed. The lawsuit in question affects 5 regions - Brooklyn, Finger Lakes, Central NY, Western NY, and Mid-Hudson. A Michigan man named Kenneth Gay has sued New York State, claiming that he should be able to receive a license to open a dispensary in New York State.

Michigan Resident Files Lawsuit To Stop New York State From Giving Cannabis Licenses To New Yorkers

Michigan-based Variscite NY One, Inc. filed the lawsuit to stop the Office of Cannabis Management from issuing Conditional Adult-Use Retail Dispensary (CAURD) licenses in the regions. Variscite claims that the Office of Cannabis Management’s dispensary license application program violates the Constitution since it doesn't allow out-of-state operators to initially apply. The company is relatively new in New York; its New York Domestic Business Corporation was filed on August 31, 2022. It has no history of doing any business in New York State prior to August 31.

Photo by Sasun Bughdaryan on Unsplash

According to Leafly,

On October 6, an initial request for the temporary injunction was rejected by the court. The new ruling made Thursday (November 10) states that the New York Attorney General failed to prove the state has a legitimate purpose for favoring New Yorkers impacted by the War on Drugs over non-residents.

Variscite Owner Claims To Qualify For New York State CURAD License

Gay, the majority owner of Variscite, claims the company qualifies for a CURAD license and has a non-violent cannabis conviction. The problem is, the conviction was in Michigan, not New York State. Gay insists that the Office of Cannabis Management laws violate an interstate commerce clause, which says that states can't bar out-of-state businesses in favor of locals. Keep in mind that marijuana is still illegal federally and his argument relies on the U.S. Constitution. United States District Court for the Northern District of New York Judge Gary Sharpe ruled in Variscite’s favor.

Until the case is resolved, CURAD licenses in at least the 5 regions will be delayed. The State could decide to halt licensing in all regions in anticipation of other lawsuits or to keep all initial licenses on the same schedule.