New York Appeals Cannabis Licensing Injunction to Second Circuit

The injunction prevented the issuing of 18 licenses last month.

New York cannabis regulators are taking a licensing fight to the next level – literally.

On Thursday, Attorney General Letitia James filed a notice to request that the Second Circuit Court of Appeals throw out an injunction issued by a federal judge that brought retail marijuana licensing to a halt in five of the state’s regions.

The notice was filed on behalf of the New York Office of Cannabis Management and its executive director, in a case that began with Michigan resident Kenneth Gay, who alleged in a lawsuit that one of his companies – Verascite NY One LLC – was unlawfully discriminated against by the in-state residency requirement for eligibility in the social equity retail permitting program.

Although the OCM was able to move forward last month with retail licensing in much of the state, the agency was blocked by the injunction from issuing 18 store permits in Brooklyn and four other regions.

The OCM requested recently that the injunction be lifted, but so far the judge in the case hasn’t budged.

It’s unclear still when the Second Circuit may hear the appeal from the state or when the retail licensing in the five regions may resume.

The plaintiff in the case has at least three companies that have filed parallel lawsuits challenging residency requirements. They all make the same basic argument that his criminal cannabis conviction in Michigan should make him eligible for social equity marijuana business licenses, per the U.S. Constitution’s dormant commerce clause.

His companies have filed suit so far this year against New York state, the city of Sacramento, and the city of Los Angeles, all of which have social equity programs tied to cannabis business licensing.

None of the cases have yet been resolved.

John Schroyer

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