A state judge ordered a preliminary injunction against New York state’s cannabis licensing program on Friday, throwing the future of the program into further uncertainty.
State Supreme Court Judge Kevin Bryant has largely taken the side of a group of service-disabled veterans who challenged the social equity criteria the state put in place to launch the program and the state’s legal adult-use industry.
The ruling continues to block state regulators from issuing new licenses under its social equity program, known as the Conditional Adult Use Retail Dispensary program. CAURD prioritizes granting retail licenses to people with past marijuana convictions and their family members.
But the judge granted some relief for existing CAURD licensees. He ruled that applicants who had received the necessary approvals before Aug. 7 would be able to move forward with opening their shops. At a hearing last week, a lawyer for several CAURD licensees who were allowed to intervene in the case said his clients had already invested a lot of time and money and would suffer major damages if they were blocked from opening.
The CAURD program was originally intended to benefit 150 cannabis businesses, but 463 licenses have been issued to date, while other eager applicants who don’t qualify wait. About two dozen licensed dispensaries and delivery services have opened since the retail market launched last December.
The judge ordered the state to submit a full list of cannabis businesses that already met the requirements to open their dispensaries by this Tuesday. He also ordered the state’s Cannabis Control Board to quickly reconvene to finalize the general licensing requirements.
Prior to the order, state officials were already in the midst of finalizing those regulations, which went through multiple public comment periods, and the general application period was slated to open this fall.
The injunction against the CAURD program was granted at the request of a group of four service-disabled veterans. They filed the lawsuit against the state Office of Cannabis Management and Cannabis Control Board earlier this month, arguing that the CAURD program was not in line with the social equity requirements of the Marijuana Regulation and Taxation Act.
That law, which legalized marijuana in New York in 2021, indicated that other groups, such as disabled veterans and minority-owned businesses, should also be prioritized for licenses. The plaintiffs argued that state regulators overstepped their authority in creating it.
The judge chided state cannabis officials for continuing to process CAURD applications after the program was challenged in two previous lawsuits.
Bryant noted that the MRTA also specifically said that licenses should open up to all applicants at the same time. He wrote in Friday’s decision that the plaintiffs “have established a likelihood of success on the merits” of their case. He also opined that the CAURD program is “in legal jeopardy” and that continual legal challenges “could result in a finding that the licenses are invalid,” threatening current license holders.
“From the beginning, our fight has always been for equal access to this new and growing industry,” the plaintiffs said in an emailed statement responding to the judge’s decision. “We remain steadfast in our responsibility to fight for all the social equity priority groups being overlooked right now by the [Office of Cannabis Management] through the CAURD program.”
Patrick McKeage, first deputy director for the state Office of Cannabis Management, said in documents submitted to the court that, under the state’s social equity plan, service-disabled veterans were already slated to be prioritized once dispensary applications were opened up to the general public.
Parties in the case will have an opportunity to object to the ruling. The next hearing is scheduled for Aug. 25.
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