New York’s Office of Cannabis Management on Tuesday asked a federal judge to narrow the scope of a Nov. 10 order limiting the issuance of marijuana retail licenses to just Finger Lakes region rather than several localities, Law360 first reported.
The news comes as the OCM had been gearing up to award its first cannabis licenses to New Yorkers who have been incarcerated or arrested for the plant. The injunction prevents the OCM from issuing licenses under the conditional adult-use retail dispensary (CAURD) program.
In a motion filed by the state, regulators are have asked the court to lift the temporary block to prevent “manifest injustice”, adding that by “unnecessarily” grouping the four other regions in the injunction (Central New York, Western New York, Mid-Hudson and Brooklyn), an additional 54 dispensaries will not be able to open.
“This will cause hardship to multiple stakeholders who have taken actions in reliance on the CAURD Program, most prominently licensed cultivators—mostly small family farms—who will have great difficulty selling their recently harvested product,” the state wrote. “The resulting retail bottleneck can be significantly alleviated by narrowing the geographic scope of the injunction as requested.”
The state argued that since CUARD applicants are only considered for their first preferred geographical location, the court should modify the injunction to be limited to only Finger Lakes, the first choice of plaintiff Variscite NY One, an LLC majority-owned by Michigan resident Kenneth Gay.
The company argued at the time that New York’s social equity program runs afoul of the dormant commerce clause, in part because it is not narrowly tailored enough to serve a “legitimate local purpose.”
In the Wednesday motion, the state added that because Finger Lakes was the plaintiff’s top choice, his initial application would not have even be considered in the other regions.
If the court were to deny the request to limit the scope, the state would request a stay of the order while it pursued an appeal.
According to OCM’s twitter, the state had been “blocked” from awarding 18 CAURD licenses due to “active litigation,” which included four licenses in Brooklyn, one in the Central New York region, four in the Western New York region, six in the mid-Hudson region, and three in the Finger Lakes region.
The development illustrates the challenges the state has faced as it hurries to dole out permits and open its first legal adult-use shops by the end of the year. The underground market continues to thrive as legal operators wonder whether they will be able to sell $740 million worth of crop yield.