New York Judge Narrows Scope of Dispensary Licensing Injunction

A New York Appeals Court judge on Tuesday narrowed the preliminary injunction on the state’s conditional adult-use retail dispensary (CAURD) plan to only include the state’s Finger Lakes region. The lawsuit, by Michigan-based Variscite NY One, had affected 63 of the 150 licenses set to be awarded to social equity applicants and prohibited licenses from being granted in the region along with Brooklyn, Central New York, the Mid-Hudson Area, and Western New York.   

The decision by Judge Gary L. Sharpe will allow the state to move forward with issuing 38 licenses in Brooklyn, 14 in the Central region, 34 in the Mid-Hudson region, and 22 in the Western region. The 18 licenses in the Finger Lakes region will remain in limbo.  

The decision does not indicate why the judge determined to narrow the scope of the original circuit court injunction.    

In the case, Variscite argues that requirements that applicants must have a cannabis-related conviction under New York state law and significant ties to the state violate constitutional protections of interstate commerce. Those rules exclude people who had been arrested on cannabis-related charges in New York, but not convicted, and those who had only federal or out-of-state convictions. The regulations also require that applicants be headquartered in the state.  

Variscite did not qualify for one of the first licenses, according to the initial complaint, because the company is based in Michigan. Varacite’s majority owner, Kenneth Gay, was convicted of a cannabis offense in Michigan. Despite the state’s rules, Varacite applied anyway, listing the five regions affected by the original injunction as preferred locations on its application.   

Earlier this month, officials doubled the number of available cannabis licenses to 300. Tremaine Wright, chair of the Cannabis Control Board, said the license expansion will allow more entrepreneurs to “participate in the first wave of this industry, allowing them to capitalize on the growing demand for cannabis products.”    

New York has so far been slow to award licenses which has led to a proliferation of unlicensed shops selling cannabis throughout the state. Gov. Kathy Hochul (D) last week proposed legislation to crack down on illegal operators, including imposing $10,000 fines per day of unlawful operations.