OCM Claims Variscite Application Score Too Low for a License

OCM wants the blocked regions narrowed to just the Finger Lakes.

New York’s Office of Cannabis Management took another swing at the case filed by Variscite NY, which has stalled the adult-use licensing program in three state regions.

The agency filed a motion last week with the Appeals Court for the Second Circuit asking it to block the current case, arguing that Variscite’s New York license application would likely not be approved based on its low score. The OCM was going to send a rejection letter, but didn’t because Variscite filed the lawsuit.

Variscite sued the state arguing that the company deserved to receive a cannabis license despite having no significant presence in the state. The group also argued that a conviction in Michigan should serve as its social justice requirement for having been harmed by a drug conviction.

The courts so far have sided with Variscite but have tightened up the regions impacted by the case.

Low Score

The OCM said that it processed Variscite’s application because it claimed that one of its members had a New York conviction.

According to the OCM, Variscite only scored 41 points out of a possible 100, which was lower than 40 other license applicants.

“This low score was largely due to the business’s justice-involved individual living in a high-income area at the time of his arrest,” the motion stated. “Plaintiff also lost points for the nature of its business because the business had never sold products out of a storefront location, had no employees, and had not previously suffered financial obstacles such as denial of a bank loan. Thus, even absent the challenged requirement, plaintiff would not receive a license and cannot demonstrate an injury fairly traceable to the justice-involved requirement.”

The OCM said that Variscite amended its application to state that it had in fact been denied a loan, but that only boosts its scoring by 6.75 points. That would move it up to a ranking of 38 out of 43 applicants versus 41 out of 43.

The residency issue was also argued by the OCM saying that Variscite didn’t actually have to be a resident in the state of New York, but needed to have suffered some harm from a cannabis conviction in the state.

They say that even though Variscite claimed that to be the case, it wasn’t so.

Do No Harm

One of Variscite’s arguments is that it is being harmed by not getting a license. However, the OCM argues that there are 54 applicants that have been denied licenses. It says the agency has suffered more harm by not being able to open stores because of the stay, and landlords are also suffering from empty storefronts.

The initial case covered the state of New York, but the court narrowed it to three regions: Finger Lakes, Mid-Hudson, and Brooklyn. This motion is asking that if the court continues to block new licenses, that it narrow the region even further to just the Finger Lakes regions, Variscite’s first location choice.



Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

One comment

  • michael mclaughlin

    February 21, 2023 at 8:16 pm

    Who do have to kill to get an approved application? A joke for the absurdity of the procedure.


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