Yet another New York lawsuit 🧑‍⚖️

NY, NY
Yet another social equity lawsuit

What happened: Another day, another lawsuit. 

A New York State judge on Thursday issued a temporary halt on the state’s social equity cannabis licensing process, responding to a lawsuit filed on behalf of four prospective applicants earlier this year.

The suit says that the state’s Office of Cannabis Management, the chief regulatory agency, allowed Conditional Adult Use Retail Dispensary or CAURD applications to proceed despite not securing real estate leases. The application rules state they must have these leases in place.

What they’re saying: “Now this injunction has us frozen in place,” Osbert Orduña, the CEO of The Cannabis Place, a New York City cannabis shop, told MJBiz. “This is beyond disappointing.” 

Why it matters: This lawsuit comes just as New York’s cannabis industry appears to be getting on track. 

It’s the latest in a long line of lawsuits that has thrown New York’s social equity, or CAURD program, into disarray. Previous lawsuits resulted in injunctions that delayed the rollout of licenses by months. 

The latest injunction stops the OCM from processing more licenses that have not submitted proof of a location. 

More broadly, the previous lawsuits and injunctions filed against New York’s cannabis program all centered on the question of fairness in capitalism, and what regulators’ role should be in picking and choosing who gets preferential access to the economic benefits created by the legalization of cannabis. 

But the effect has been to gum up the works — making it harder for everyone to make money, and for the state to establish a robust, legal market that’s competitive with the untaxed, noncompliant illicit market. 

Zoom out: Cannabis social equity programs are ripe for litigation. In our newsletter yesterday, we wrote that Minnesota may be charting a similar path to New York — the state delayed its licensing lottery until at least May of next year. 

-JB

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