A federal judge has temporarily ordered New York state to halt the awarding of the first conditional adult-use retail dispensary licenses in five areas of the state. And it could be a harbinger of more cannabis-related litigation to come.
The order was issued as part of a lawsuit filed by an applicant from Michigan. It argues that New York’s requirements for applicants — specifically, that they have primary residence in New York and that they or a family member have been convicted of a marijuana-related offense in the state — violate the U.S. Constitution’s protections for interstate commerce.
The judge granted the applicant’s request for a temporary injunction Thursday.
Despite the order, the Office of Cannabis Management is still planning to move forward with awarding CAURD licenses soon, Freeman Klopott, director of communications said in a statement. The agency didn’t comment on the pending litigation.
“The Cannabis Control Board will soon have before it applications for the Conditional Adult Use Retail Dispensary license which will start closing that supply chain,” Klopott said.
Here are three things to know about the lawsuit right now:
The lawsuit could invite further litigation directly tied to the distribution of Capital Region licenses.
As it stands, the lawsuit has frozen the distribution of licenses in the Finger Lakes, Western New York, Central New York, the mid-Hudson region, and Brooklyn. When applying for the licenses, applicants had to denote five regions in which they’d like to open a retail operation, and the five restricted areas were the ones that the company from Michigan — Variscite NY One — had specified.
At present, the state could move forward issuing license in the remaining eight regions — including the Capital Region — according to the order.
But the suit could influence other rejected candidates to pursue litigation where they applied, including in Capital Region, said Ryan McCall, an associate at Tully Rinckey Attorneys & Counselors at Law in Albany.
“I think what you’re going to begin to see is other people who may have been denied licenses that were applying from out of state say, ‘Hey, we can’t do this either. We’re going to now file a lawsuit which could restrict the other regions, including the Capital District.'”
It could set a precedent for cannabis programs in other states.
McCall said the decision in this case could influence how other states roll out their cannabis programs, especially those that are interested in the justice-involved approach. The case is a toss-up and could go either way, he said.
“This is going to be one of the cornerstone cases that they’re going to point to,” he said.
The injunction has no fixed timeline for resolution.
The order is pending a resolution — meaning that unless the parties hold a hearing on the issue or if the judge decides to dismiss or modify it, the injunction will be in place.
McCall said, in his experience, injunctions can last anywhere from one to six months — but could be longer or shorter.
“This is going to be a wrench, I can’t understate or overstate it enough,” McCall said. “It’s going to really be interesting to see how this one plays out because you’re now going to see people who may have wanted those licenses begin to smell blood in the water.”
