New York Cannabis Program Faces Legal Setback as Judge Halts Licensing Process
The Office of Cannabis Management (OCM), New York’s cannabis regulator, has been temporarily barred from processing thousands of business license applications, including 340 Conditional Adult Use Retail Dispensary (CAURD) applicants, due to a court order.
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Lawsuit Details
The lawsuit, filed in May by four companies (Organic Blooms LLC, Niagara Nugget LLC, Blackmark LLC, and Windward Management LLC), alleges that the OCM violated New York’s 2021 cannabis law by waiving key requirements for early CAURD applicants. Specifically, the plaintiffs argue that the OCM improperly allowed applicants to bypass securing retail locations and notifying local municipalities.
The court agreed, finding the OCM’s actions likely violated state law, and issued a temporary restraining order halting the processing of applications.
Industry Impact
The decision affects a wide range of applicants:
340 CAURD applicants awaiting approval.
Thousands of other applications, including 1,799 submitted in November and 3,789 from December 2023, remain unprocessed.
The legal ruling has added another challenge to New York’s cannabis market, which is already struggling with slow growth. Revenue challenges include:
Declining sales: 60% of dispensaries report annual revenues below $1 million.
Market saturation and financial strain among existing license holders.
Next Steps
A scheduling conference is set for December 18 to address the case and outline further proceedings. The litigation outcome could have long-term implications for New York's cannabis market and the OCM’s regulatory approach.
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