New York Cannabis Regulators Propose Settlement for Lawsuit Hindering Retail Licensing

New York marijuana industry regulators on Tuesday gave initial approval to a settlement deal that is intended to end a legal fight that has stalled retail cannabis permits in the Finger Lakes Region.

The New York Cannabis Control Board voted unanimously to support the settlement – details of which have yet to be fully disclosed – with Variscite NY One, reported. The deal would “guarantee an adult-use license” for Gay once as soon as the CCB opens cannabis permitting to the general public, but further particulars were not released, the outlet reported.

The full settlement deal is expected to be filed with the U.S. district court this week, reported.

If the deal is approved by the district judge overseeing the lawsuit, the move will likely allow the CCB to move ahead with retail cannabis licensing in the Finger Lakes, which has been stalled for months due to the suit.

The suit, filed last year by Variscite owner Kenneth Gay, alleged that he was unlawfully excluded from the New York social equity program, under which Gay was not eligible for the first round of conditional adult-use retail dispensary (CAURD) permits because he lives in Michigan and doesn’t have a “significant presence” in New York, unlike the mostly longtime residents who applied for the CAURD permits. The social equity program in New York reserves the first retail permits for “justice-involved” entrepreneurs who have some sort of criminal track record tied to cannabis prohibition.

The suit originally resulted in a court injunction last November that prohibited CAURD licenses from being issued in five regions across New York, which was then narrowed to just the Finger Lakes Region.

CCB members said during the Tuesday meeting they were only supporting the settlement deal for the sake of issuing more CAURD licenses, to help get the state cannabis industry fully operational, instead of fighting the court battle to its conclusion.

“I’m very pleased that we’re considering this today … not because I think that this lawsuit has any merit, but our CAURD licensees need to be in the Finger Lakes, as well, getting to work,” CCB member Reuben McDaniel said.

Variscite has filed similar lawsuits against cannabis regulators in Los Angeles and Sacramento, which also have social equity programs tied directly to marijuana licensing.

At its meeting Tuesday, the CCB also approved new emergency industry regulations aimed at cracking down on the burgeoning unlicensed cannabis trade in New York.

The board also moved to allow the Dormitory Authority of the State of New York (DASNY) to accept credit investors, in an attempt to help the agency raise $150 million to spend on CAURD dispensary sites, reported.

John Schroyer

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