New York is already known as the host of the financial capital of the world. Many say New York has the potential to be the cannabis capital of the world. As David Feldman of Skip Intro Advisors LLC said at the recent Business of Cannabis New York event, ” No other city in the world consumes more cannabis than in New York (referring to New York City).” And New York City is just part of the story. On the same panel, Will Muecke, co-founding managing member of Artemis Growth Partners, pointed out, “New York has a brand culture—even Brooklyn, which is its only market is huge. Even the rural markets have potential. New York is a collection of regions with its opportunities.” With the huge potential we as an industry face here in New York, it’s frustrating with it’s studdered start.

In the ever-shifting seas of cannabis regulation, a lawsuit in New York has caused significant waves, particularly for dispensaries and cannabis industry professionals. This story examines the lawsuit's impacts on New York's cannabis market.

The Genesis of the Legal Battle

A lawsuit by service-disabled veterans has challenged New York’s Conditional Adult Use Retail Dispensary (CAURD) licensing process. They argue that the process unfairly favored certain groups, sidelining others like service-disabled veterans. This legal battle highlights the complexities of creating a fair licensing system in the cannabis industry.

The Ripple Effect of the Temporary Injunction

The CAURD licensing process was put on hold by a temporary injunction in August 2023, affecting over 400 licensees. This injunction has brought new dispensary openings to a standstill, causing a ripple of uncertainty and concern among cannabis businesses.

While the opening of these new dispensaries has been delayed, an unintended consequence has been the overwhelming number of products created by cultivators. These products were prepared for the launch of the dispensaries but never had the opportunity to make their first sales through the dispensaries’ newly installed point-of-sale systems.

Voices from the Industry

While there’s light at the end of the tunnel with the letter from the plaintiff’s attorney stating, “The parties have reached an agreement in principle to settle this matter and have so informed Supreme Court (which has not yet issued a decision on the pending summary judgment motions)“, the final resolution hasn’t been made public.

Industry leaders have voiced their concerns and suggestions for moving forward amid this turmoil. Hal McCabe, Executive Director of the Cannabis Association of New York, expressed the collective frustration and a call to action:

“As the largest Cannabis Association in New York State, we would be remiss if we did not express our sincere bewilderment and disappointment to prolong this situation. Subsequently, we are calling on members of the Legislature to introduce and vote on legislation that converts all CAURD licenses to Adult Use General Licenses and extend them for an additional two years. We believe this is the best solution to guarantee the viability of New York's homegrown cannabis industry."

McCabe’s statement reflects a proactive stance in seeking a resolution that supports the industry's growth and sustainability.

Settlement in Sight but Not Sealed

While a settlement seemed within reach in November 2023, the CCB’s postponement of settlement talks has extended the uncertainty for businesses.

Implications for Dispensaries and Cannabis Professionals

The lawsuit’s resolution could usher in over 400 new licensees, reshaping the competitive landscape. This situation highlights the need for dispensaries and cannabis professionals to remain vigilant and adaptable to regulatory changes. Moreover, allowing the bottleneck of product to loosen up relieving the struggle that cultivators and

Conclusion

This legal development serves as a case study on the complexities of cannabis regulation, emphasizing the importance of a balanced and fair licensing process for the health of the industry.