New York Battling Judge Over Exemptions to Cannabis Retail License Pause

September 18, 2023 · Green Market Report

New York marijuana regulators have spent nearly the past month trying to convince a state judge to allow a handful of conditional adult use retail dispensary (CAURD) licensees to open for business, but as of Friday, nothing the state tried had yet worked, which leaves the Empire State with just 23 operational legal cannabis shops for the foreseeable future.

When Judge Kevin Bryant handed down a preliminary injunction last month that froze all retail permitting, he also tried to be flexible with regulators and licenseholders by creating a carve-out for CAURDs that had met all requirements for licensure by Aug. 7. The state Office of Cannabis Management then submitted a list of 30 retailers it contended met Bryant’s threshold for exemptions to the court order, whom it suggested should be allowed to open.

But Bryant rejected the list in late August because OCM First Deputy Director Patrick McKeage, in an affidavit, appeared to caveat the 30 because the agency “cannot certify whether a particular licensee … has in fact met all requirements for licensure.”

So the OCM filed an updated affidavit on Sept. 6, and whittled its list of 30 down to 12 that McKeage said “satisfied each requirement prior to August 7, 2023, for receipt of a final license,” including:

  • Air City Cannabis for a delivery operation in Rome
  • Michael D. Gant for a delivery operation in Manhattan
  • Just a Little Higher LLC for a delivery operation in Jamaica
  • No Name Graphics LLC for a delivery operation in Troy
  • Cannabis Emporium Corp. for a retail shop in the Bronx
  • North Country Roots for a retail shop in Saranac Lake
  • MJ Dispensary LLC for a retail shop in Rochester
  • The Herbal Care THC LLC for a retail shop in Manhattan
  • The Highest Peak LLC for a retail shop in Potsdam
  • Brent L. Rogers for a retail shop in Plattsburgh
  • Capital District Cannabis & Wellness Inc. for a retail shop in Albany
  • Gotham Buds LLC for a retail shop in Manhattan

But again, lawyers for the plaintiffs objected, arguing that the OCM hadn’t provided documentation to back up its claims that the 12 were ready to open. On Sept. 11, Bryant sided with them, finding again that the list didn’t meet his full criteria for exemptions to the injunction.

The OCM, Bryant wrote in a new order, “having failed to comply with this court’s order in that it is in conclusory fashion and only indicates which proposed licensees have ‘substantially complied’ with licensing requirements.”

On Friday, the OCM tried once more to convince Bryant that the list of 12 was reasonable and that he should allow some CAURD licensees to move forward, because the judge – OCM argued – wrongly included retail site inspections and approval in his criteria.

McKeage said in yet another new affidavit that site inspections and approval are the very last step, and typically go even after full licenses are awarded. He noted that Housing Works – the very first legal adult-use cannabis shop to open in New York – was awarded its full license on Dec. 23 and then had its site inspection on Dec. 28 before opening to the public on Dec. 29.

“The on-site compliance inspection is separate and distinct from license issuance and the on-site inspection is not required prior to the license certificate being issued. In fact, of 23 CAURD licenses issued to date where an on-site compliance inspection was required, only 13 were issued license certificates after a final compliance inspection had taken place,” McKeage said in the affidavit.

As of mid-day Friday, it also wasn’t clear if any new developments had emerged from a conference held that morning with the judge and all the attorneys in the case, and next steps for CAURD licensees remain unclear. (Full Story)

In categories:Dispensaries Legal
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