US (NY): Regulator gets sued by MMJ operators

The only guarantees in life are death, taxes, and cannabis lawsuits, and New York is no different. In a cannabis marketplace plagued by fits and starts, the New York Cannabis Control Board (“CCB”) Office of Cannabis Management (“OCM”) has been joined to another lawsuit alleging that its actions to date are ultra vires.

The Coalition for Access to Regulated and Safe Cannabis, an unincorporated trade association consisting of Registered Organizations (vertically integrated medical cannabis permit holders), individuals that planned to pursue adult-use dispensary licenses when the widow first opened, and physicians whose practices have suffered because of OCM’s purported neglect of the medical program. The lawsuit alleges “unconstitutional overreach,” “egregious abdication of duties,” and committing actions that put “New Yorkers’ health and safety at risk.” The complaint alleges that the CCB and OCM are “imposing their own policies” rather than following what was required of them in the 2021 Marijuana Regulation and Taxation Act (“MRTA”). The complaint points to language in the MRTA directing the CCB and OCM to open “the initial adult-use retail dispensary license application period . . . for all applicants at the same time.” Instead, the lawsuit argues, CCB and OCM created the Conditional Adult-Use Retail Dispensary program (“CAURD”), which introduced a new license category and limited the eligibility of licensure to a specific group. The lawsuit ultimately seeks the following relief:

Declaring the CAURD license an ultra vires and unconstitutional licensing category.
Declaring the qualifying criteria for the CAURD license category arbitrary and capricious.
Compelling OCM or CCB to pursue civil injunctions against all illicit cannabis stores refer to the Attorney General’s Office the names of all illicit cannabis stores advertising THC products cited in the NYMCIA Report for further legal action, and opening the adult-use retail dispensing license window for all applicants immediately, including for all the social and economic equity applicants specified in the MRTA and for Registered Organizations.