A New York judge approved settling a lawsuit filed by a group of service-disabled veterans[1], granting the group a provisional license and paving the way for more than 400 provisional licensees to open marijuana dispensaries. But the settlement terms – which were not made public when the Cannabis Control Board approved the settlement – block the issuance of new Conditional Adult Use Retail Dispensary (CAURD) licenses until April of 2024.

The judge also approved a second settlement to a lawsuit filed by Coalition for Access to Regulated & Safe Cannabis (the “Coalition”),[2] a coalition of cannabis companies, and that settlement establishes timelines for reviewing applications from Registered Organizations seeking adult-use licenses. Registered organizations are responsible for manufacturing and dispensing medical cannabis in New York.

State Supreme Court Justice Kevin R. Bryant’s approval allows 436 retailers to open their shops and commence sales and deliveries. The agreement reinstates the CAURD licensing program that prioritizes individuals with prior marijuana-related convictions.

By enjoining the issuance of new licenses, the state will be forced to focus on clearing backlogged provisional licensees. But new applicants will have to wait even longer for licensure, a move drawing criticism. A representative of the New York Cannabis Retail Association told one media outlet 30 members of his association are on the verge of bankruptcy and can’t wait until April.  

Judge Bryant previously ruled the veterans’ group was likely to be successful in its lawsuit alleging regulators acted unconstitutionally by prioritizing those with marijuana-related convictions for licensure. While the terms of the Marijuana Regulation and Taxation Act gave priority to a large pool of “social and economic equity applicants” that included service-distressed veterans, the veterans group claimed that the CAURD program was more restrictive than legislators intended.

The lawsuit filed by the Coalition was similar. The proposed settlement of that lawsuit grants licenses to the five Registered Organizations seeking to expand into the new market and establishes timelines for reviewing Registered Organizations seeking adult-use licenses. That group includes several major multi-state operators, like Acreage HoldingsPharmaCannGreen Thumb Industries and Curaleaf.

Attorneys with Harris Beach’s Cannabis Industry Team are monitoring developments in the fast-moving New York cannabis industry and can help cannabis companies prepare their application and overcome legal and regulatory challenges. Harris Beach, offers a comprehensive portfolio of legal services to cannabis clients in New York and represents the nation’s leading companies dealing with cannabis, hemp and CBD, including large multi-state operators, start-ups, growers and non-plant-touching businesses, as well as medical marijuana registered organizations.

If you have questions about this lawsuit or related matters, please reach out to attorney William M.X. Wolfe at (315) 214-2059 and wwolfe@harrisbeach.com; attorney Heidi Schult Gregory at (585) 419-8720 and hgregory@harrisbeach.com; attorney Francis L. Gorman, III at (585) 419-8628 and flgorman@harrisbeach.com; and attorney Meaghan T. Feenan at (518) 701-2742 and mfeenan@harrisbeach.com; 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.

For more insights from our marijuana attorneys, please view additional cannabis insights.

[1] The lawsuit brought by the Service-disabled Veterans is captioned Carmine Fiore et al v. New York State Cannabis Control Board et al., Add Index No. (Court).

[2] The lawsuit brought by the Coalition is captioned Coalition for Access to Regulated & Safe Cannabis v. New York State Cannabis Control Board et al., Add Index No. (Court).