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New York: courts grant regulators some relief in cannabis licensing lawsuits.
On Friday, New York’s cannabis regulators got some good news in two lawsuits against their adult use licensing rollout.
The big news came in the suits from Jeffrey Jensen (Variscite), who was seeking a “temporary restraining order and preliminary injunction” because the residency requirements to qualify for social equity, he argued, violate the dormant Commerce Clause.
U.S. District Judge Anne Nardacci disagreed. Notably, Nardacci referenced a case in Washington, where Jensen also sued regulators over equity licensing requirements. There, the court ruled against Jensen, and Nardacci wrote that she was “persuaded” by the court’s “reasoning.”
“Congress exercised its Commerce Clause power to pass the CSA and thereby prohibited a national market for cannabis. Given that the national market for cannabis is illegal, it would make little sense to apply the dormant Commerce Clause to New York’s cannabis licensing scheme. Doing so would only encourage out-of-state participation in the New York cannabis market, which would be contrary to Congress’s exercise of Commerce Clause power in enacting the CSA,” she wrote.
(As Cannabis Wire recently reported, Jensen is behind lawsuits against regulators from coast to coast, and already sued New York regulators back in 2022.)
New York Attorney General Letitia James issued a statement on Friday regarding the decision.
“I am pleased with today’s court decision rejecting attempts to prevent New York from having an equitable cannabis industry. This is an important victory in our efforts to ensure that disproportionately impacted communities are given their fair share in the legal cannabis industry,” James said.
The smaller bit of news that landed Friday was regarding another suit that, as Cannabis Wire reported in this newsletter last week, took issue with the queue regulators established for non-conditional adult use licensing. (An applicant’s order in the queue determines when they will be up for a license, and those lower in the queue could get squeezed out of retail due to distance requirements, regardless of whether they’ve secured a lease.)
The judge ordered a hearing on March 8, but did not issue a temporary restraining order, which would have halted the issuing of licenses. (Regulators have scheduled a meeting for February 16, and they are expected to issue the first batch of non-conditional adult use retail and microbusiness licenses at that meeting.)
Major alcohol group welcomes “hemp-infused intoxicating beverages” at its annual event.
During Access LIVE, held in Las Vegas last week, Francis Creighton, president and CEO of Wine & Spirits Wholesalers of America since September 2022, did a Q&A during which he covered many of the topics debated during the event, but also broader trends in the alcohol space.
One of those topics was hemp, because this was the first year that hemp-derived beverage brands were added to the show floor.
“Our beverage alcohol industry is the most innovative in the world. We respond to consumer cues and anticipate its needs. And in a world where hemp and cannabis products are becoming more and more accepted, we have to roll with those market changes,” Creighton said on why it was important to bring in hemp-infused intoxicating beverages this year.
“Now, hemp-derived beverages sit in a regulatory no-man’s land. To be clear, we believe all cannabis and hemp products should be regulated in the same way alcohol products are — and especially for public health and public safety reasons, we should have some regulatory certainty,” Creighton added.
“In the meantime, our members need to understand what is happening in the market, and we are so happy Access LIVE is one of the places they can go to learn about new products — not just hemp derived products, but also no-/low-alc products and other market innovations that today’s consumers are calling for.”
But, some in the alcohol industry see hemp and cannabis products as “competition.”
Stan Hastings, CEO of Moon Distributing, a wholesale wine and spirits distribution company in Arkansas, spoke on a panel titled “Wholesaler Power Hour: Stories Through the Generations.”
“We’re in the lifestyle business. I think there’s a shift in lifestyle spending going on in the country, also. Cannabis is viewed as a competition to us. Brand loyalty is not what it used to be. When it comes to the lifestyle dollar and us competing for that, it’s going to be $5 billion online gambling this year,” Hastings said.
+ More: Read Cannabis Wire’s coverage of the alcohol industry’s lobbying on cannabis efforts.
Newest letter to AG Garland highlights concerns over foreign ties in unregulated cannabis.
Texas Rep. Pete Sessions, a longtime opponent of cannabis law reform efforts, has led a letter to Attorney General Merrick Garland “concerning Chinese Communist Party (CCP) affiliated marijuana cultivation operations in the United States.”
The signatories include 50 members of Congress, both Democrats and Republicans, who are asking the Dept. of Justice what they’re doing to “address this developing criminal enterprise.” The letter points to states like Maine and Oklahoma where illegal cannabis activity has been particularly egregious and has included other crimes.
The letter asks for a DOJ briefing no later than Feb. 23 to include, “at minimum, answers” to questions like:
“How many [Chinese Communist Party]-affiliated marijuana farms have obtained state-issued licenses to grow marijuana, either directly or through a shell company?”
And, “How many American banks offer financial services to [Chinese Communist Party]-affiliated marijuana farms? What is the nature of these services?”
+ More: last month, GOP Congress members wrote a letter to the DEA, as Cannabis Wire reported in this newsletter, also asking for answers to questions about the link between illegal cannabis activity and “foreign entities.”
As we noted in that newsletter, there is nothing explicitly linking these illegal grows to the CCP.
