The New York State Attorney General Office has moved to dismiss a lawsuit that aims to halt the state’s legal adult-use cannabis program based on marijuana’s danger to the state’s residents and illegal federal status.
The lawsuit was filed in the U.S. District Court for the Northern District of New York this summer by anti-cannabis organizations Cannabis Impact Prevention Coalition and Cannabis Industry Victims Seeking Justice, along with several individuals who claim to have been personally negatively impacted by marijuana. The plaintiffs believe federal law supersedes any state law legalizing the drug and cite dangers posed by its use.
The complaint reads: “Marijuana products can be very concentrated in potency and reach 99% THC, the psychoactive, intoxicating, mind-altering component of the drug. These products cause addiction, mental illness, birth defects, suicide, violence, DUIs and many adverse general health problems.”
The lawsuit also claims the state’s “illegal financing of marijuana trafficking” via the Social Equity Cannabis Investment Fund creates a marijuana trafficking scheme violating federal law.
Governor Kathy Hochul, the Cannabis Control Board and the Office of Cannabis Management, defendants in the case, filed a motion to dismiss the complaint on Nov. 6, 2023. Among the reasons cited in the motion are:
- The plaintiffs fail to establish they have suffered any concrete injury from the legalization of cannabis.
- Federal law does not create substantive rights or grant individuals a private right of action to obtain relief.
- Plaintiffs fail to show how individual defendants banded together to create, manage and operate an enterprise that violated any of the plaintiffs’ rights.
District Judge Lawrence E. Kahn will hear the motion to dismiss on Dec. 4, 2023.
Marijuana Rollout Plagued by Lawsuits
Despite the lawsuit, the state is currently taking applications for cultivator, processor, distributor, microbusiness and retail dispensary licenses, and the Office of Cannabis Management is already reviewing and approving retail dispensary applicants who already have a location secured.
Still, heavy litigation is one of the reasons the rollout has been delayed more than two years. In August, a state Supreme Court Justice issued a stern ruling criticizing the state’s legal cannabis program and stopping it from issuing new Conditional Adult- Use Retail licenses.
State Supreme Court Justice Kevin R. Bryant ruled a veterans group was likely to be successful in its lawsuit alleging regulators acted unconstitutionally by prioritizing cannabis retail licenses for those with past cannabis convictions or family members with past cannabis convictions. While the MRTA prioritizes “social and economic equity applicants” that would include service-distressed veterans, the veterans group claims regulators are prioritizing a narrower pool of applicants and is more restrictive than legislators intended. This matter is scheduled for another hearing on Sept. 15.
A similar lawsuit was filed in March by the Coalition for Access to Regulated & Safe Cannabis, described as “an unincorporated trade association” composed of registered organizations, several of which plan to apply for a dispensary license to sell cannabis legally. The group includes several major national sellers, such as Acreage Holdings, PharmaCann, Green Thumb Industries and Curaleaf.
And, in Oct. 2022, a lawsuit filed by Variscite NY One resulted in a federal district judge preventing the Office of Cannabis Management from issuing licenses in five areas of the state (Finger Lakes, Central New York, Western New York, Mid-Hudson, and Brooklyn). That lawsuit alleges the CAURD program violates the Dormant Commerce Clause, which prevents states from passing legislation that discriminates against or excessively burdens interstate commerce. The court’s injunction was lifted in March, around the time the Office of Cannabis Management announced an ambitious plan to double the number of retail license.
Harris Beach’s Cannabis Industry Team is carefully watching the legal landscape. If you have questions or needs in this area, please reach out to attorney Meaghan T. Feenan at (518) 701-2742 and firstname.lastname@example.org, or the Harris Beach attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as Washington D.C., New Haven, Connecticut and Newark, New Jersey.
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