NY Cannabis Authorities: 'No Historical Precedent' for Lawsuit Claims

The state's motion seeking summary judgment was filed last Friday.

Cannabis regulators in New York asked a state court to dismiss a lawsuit filed by a group of medical operators.

The group, known as the Coalition for Access to Regulated & Safe Cannabis, said the state has not done enough to suppress unlicensed marijuana sales, according to Law360.

The coalition accused New York’s Cannabis Control Board and the Office of Cannabis Management of allowing the gray market to grow by not taking “any meaningful steps” afforded to them under the Marihuana Regulation and Taxation Act (MRTA), which was established in March 2021.

However, the state’s cannabis authorities said that the coalition lacks standing to sue over actions they view as discretionary. They said there is no historical precedent for courts forcing a government body to undertake policing actions.

The state’s motion seeking summary judgment was filed last Friday.

David Feuerstein, a lawyer for the plaintiffs, said the motion for summary judgment is the latest attempt by the regulators to defend their “arbitrary and unconstitutional conduct.”

The lawsuit alleges that state regulators have been reluctant to take action against the increase of unlicensed cannabis retailers in the state, choosing limited enforcement actions like issuing cease-and-desist letters – methods the lawsuit criticizes as “half-hearted” and “futile.”

The state cannabis authorities maintain that enforcement of marijuana regulations, as clearly stated in state cannabis law, is a discretionary action. They noted that the sections of the law that give the control board the power to impose civil penalties specifically say that fines “may be recovered” and “may be released or compromised.”

The coalition is also seeking a declaratory judgment that regulators overstepped their authority when they implemented the conditional adult-use retail dispensary license program. The first to open shops in New York under the CAURD license program were those referred to as “justice involved individuals,” defined as people convicted of a cannabis-related crime before March 31, 2021.

Feuerstein said there is “no question” that the Office of Cannabis Management and Cannabis Control Board have overstepped their constitutional and legislative authority in creating the CAURD program and have ignored their obligation to shut down the unregulated marketplace.

In response, the state regulators said the coalition’s claim shows a fundamental misunderstanding of the law. The regulators pointed out that the legislature provided numerous guidelines for the agency to use in designing the structure of the CAURD program, which aligns with broader legislative goals like the “restorative justice” framework.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.

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