New York state Judge Kevin Bryant on Friday issued a pair of brief court orders, signaling that at least two of the 400-some cannabis retailers that are on pause will now be allowed to open for business.
More such exemptions also may be on the way, and some industry insiders suggested it could culminate in more than 30 legal dispensaries being operational in New York by the end of the year.
In new court documents released Friday, Bryant signaled that both ConBud LLC in Manhattan and Kush Culture Industry LLC in Queens – which does business as Terp Bros – had been granted exemptions to a standing injunction that has most of New York’s legal marijuana retail licensees on hold and unable to open.
Bryant in August issued a broad court order, freezing the path forward for more than 400 conditional adult use retail dispensary (CAURD) licenses that had already been awarded by the state Office of Cannabis Management, and prohibiting the agency from further processing permits.
That has left the state with only 23 operating legal cannabis stores for adult-use customers, while illicit stores reportedly number in the thousands.
When the initial order was issued, Bryant wrote that he would let licensees who had been proven ready for business by Aug. 7 request exemptions from the injunction, but since then, the OCM and Bryant have been at odds over how many licensees and who met the criteria that he laid out.
The OCM initially sent Bryant a list of 30 retailers – including Kush Culture and ConBud – that it claimed had checked all necessary boxes, but Bryant disagreed. Friday’s exemptions are the first ones he has thus far granted.
“We’re certainly pleased with the decision. It’s certainly a step in the right direction for the CAURD program and for CAURD licensees, and we hope that these two are just the first of more to come,” said attorney Jorge Vasquez, who represents both Kush Culture and ConBud.
Vasquez said he’s not sure yet when exactly the two stores will open, but that based on Bryant’s order, they’ll be allowed to open as soon as they’re ready, which could literally be tomorrow.
Wei Hu, an attorney for CAURD licensees including the two exempted Friday, said in an email to Green Market Report that he was “thrilled” at the news, and indicated that more such exemptions are likely to be released either Friday or in coming days by Judge Bryant, for a possible total of 14.
“With open applications, there is no basis for the injunction to remain against any provisional CAURD licensee… There is no basis for this litigation to continue to impose unprecedented pain against hundreds of families,” Hu wrote. “That being said, I am thrilled my clients Jeremy Rivera and Alessandro Cottone can resume the commitment to bringing access to licensed cannabis to the Astoria Queens community, and the dozens of living-wage jobs that come along with it.”
Rivera was ready to open Terp Bros in Queens when the injunction was issued, and he told Green Market Report on Friday that he hopes to have a soft opening within a week or two, and then schedule a grand opening.
“We’re ecstatic. We’re going to try to move as fast as we can,” Rivera said. “It’s been long enough. We’ve been holding off for two months almost since the injunction started back in August. Now, it’s getting the staff trained, getting inventory in.”
Hu said via email that “There are about 12 more exemption requests in the pipe remaining. Should have decisions on them shortly.”
Rivera added that 14 added stores to the existing 23 will be a “huge relief on the whole supply chain,” given that there are hundreds of licensed farmers still sitting on crops and biomass from 2022 that’s yet to be sold.
“This is opening up the industry,” Rivera said. “It’s a battle won in the war.”
Vasquez, however, said the litigation is still very much alive and could still have further ripple effects for cannabis licensing in New York. There will be another conference between the lawsuit parties and Judge Bryant later this month, he noted.
A third attorney who also represents several CAURD licenseholders, Duncan Delano, said the first exemptions present a “glimmer of hope” to hundreds of other CAURDs that are uncertain what the future holds for them.
But, Delano said, “If you’re not one of those two, you’re still pretty frustrated. I have many clients in that boat. But it is hopeful, and I’m portraying that to my clients, as a sign of hope.”
Delano said he’s also hoping that state regulators will try now to get the underlying case dismissed, since the Oct. 4 universal application window has opened to the public, allowing any and all stakeholders to apply for retail, cultivation, processing and distribution permits.
But, he said, the plaintiffs in the case – a quartet of service-disabled veterans – are already laying the groundwork for another possible legal issue with the Oct. 4 licensing window because there’s a box on the applications for CAURD program participants to check, which suggests they may be receiving special treatment in the new licensing process.
“OCM does in fact intend to give CAURD licensees an advantage” in the new licensing period, the plaintiffs’ attorneys asserted in a letter on Thursday to Judge Bryant, which they asserted would be “in circumvention of the injunction.”
That could lead to either yet another lawsuit, Delano warned, or a further wrinkle in the existing case.
“It’s part of a strategy that continues to be working: playing hardball and OCM being on the defensive,” Delano said.
Bryant has yet to rule on even more applications for exemptions that have been filed, according to court records, including:
- North Country Roots Inc.
- Air City Cannabis LLC
- Cannabis Emporium
- Gotham Buds LLC
- The Highest Peak LLC