New York's cannabis industry is bracing for another legal challenge that could put the industry in limbo for the third time.
Two companies that applied for an adult-use retail dispensary license filed a federal suit Monday in the U.S. District Court in New York's Northern District against the state Office of Cannabis Management and its Cannabis Control Board. The suit was filed the same day the Office of Cannabis Management's application window closed for its first round of adult-use retail licenses.
Variscite New York Four LLC and Variscite New York Five LLC claim the department's adult-use retail dispensary cannabis license program is unconstitutional, arguing the board's system of approving licenses favors New York residents and violates the federal Dormant Commerce Clause, which prevents states from discriminating against interstate commerce.
"Defendants violated plaintiffs’ rights by depriving [them] of the opportunity to fairly compete for a license to operate a storefront retail cannabis dispensary, in violation of the dormant Commerce Clause," according to the lawsuit.
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