New York’s justice-focused cannabis retail rollout, paused for months due to litigation, is poised to return.
New York regulators met for a six-minute emergency meeting on Monday to vote on just one resolution, which was approved with little discussion: a settlement agreement in litigation against the state’s Conditional Adult Use Retail Dispensary (CAURD) program.
“Some 436 provisional licensees have had their business planning and rollout halted to a dead stop. And New York State cannabis licensees throughout the supply chain have similarly been impacted by the delay of the retail rollout,” Cannabis Control Board Chair Tremaine Wright said at the start of the short meeting on Monday.
Board members were briefed on the terms before the meeting, but if any nitty gritty questions arose during the meeting, the group would have headed into executive session. There were no questions about the litigation – one from veterans and another from some of the state’s existing licensed medical cannabis operators – that challenged the state’s prioritization of individuals with a cannabis conviction, or a close family member with one, for the first retail licenses via the CAURD program.
While no details about the settlement were provided on Monday, a settlement document filed Tuesday laid out the terms for the veterans’ suit. The plaintiffs agree to drop their suit in exchange for regulators awarding each of the four plaintiffs one provisional adult use retail dispensary license, with “site protection” for the retail location they’ve identified (one plaintiff has yet to select a location, while another’s location is in a municipality that has opted out). The plaintiffs will also be able to participate in “all programs made available to other [social equity] applicants,” like training and financing.
Additionally, regulators agree not to award any more provisional CAURD licenses until April 1, 2024, “in order to dedicate OCM’s application and licensing resources in the next coming months to the current application and licensing window for adult use licenses, including SEE applicant licenses.”
Regulators also agree to establish a Service-Disabled Veteran-Owned Business taskforce and to develop “initiatives to increase service-disabled veteran participation in the cannabis market.”
The state Supreme Court still needs to approve the settlement.
Late summer and fall marked a difficult time for the state’s cannabis industry, especially for those that regulators intended to lift up in the first place. This prioritization became the focus of the litigation, at the heart of which was one line in the Marihuana Regulation and Taxation Act: “the initial adult-use cannabis retail dispensary license application period shall be opened for all applicants at the same time.” In other words, the plaintiffs felt that the prioritization built into the CAURD program went against the intent of MRTA.
As a result of this litigation, the CAURD program has been partially paused since August, when state Supreme Court Judge Kevin Bryant imposed a limited injunction on the program and said that regulators would be “enjoined from further processing, approving or investigating pending applications for CAURD licenses” with the exception of “licensees who, prior to August 7, 2023, met all requirements for licensing.”
After much back and forth in the courts with regard to how much information needed to be provided in order to grant exceptions, the judge approved five exceptions in October.
Meanwhile, regulators turned to the appeals court to fight Bryant’s decision. However, on Nov. 13, the lawyer for the plaintiffs wrote to the appeals court to let them know that the “parties have reached an agreement in principle to settle this matter.”
The Board had the settlement on its Nov. 17 meeting agenda, but it was removed at the start of the meeting.
The following week, on Nov. 22, OCM executive director Chris Alexander sent out an email to stakeholders to explain what happened and what would come next.
“I share in the frustration that I know many of you feel,” he wrote.
Looking ahead, he noted that, once the judge approves the settlement, the more than 400 provisionally licensed CAURDs would still need to “finish any remaining portions” of their applications and “OCM would need to confirm compliance with New York’s cannabis regulations.”
Since the first shop opened last December, more than two dozen CAURDs have become operational.
“I said this a year ago, I said this in June, and I’ll say it again: Your success is our success. We will not stop pursuing all possible pathways to get your businesses open,” Alexander wrote.
Editor’s note: This story, originally published on Nov. 27, was updated on Nov. 28 with details of the settlement with regard to the veterans’ suit