NY cannabis agencies sued by medical marijuana providers

A coalition that includes some of New York's medical marijuana companies sued state cannabis regulators Thursday in an effort to open up licensing to all retail dispensary applicants immediately.

The lawsuit, filed in state court in Albany, claims that state cannabis regulators exceeded their legal authority when they opened the initial application pool in August only to people with past pot convictions or their relatives, instead to everyone. The lawsuit names as defendants the state's Cannabis Control Board and Office of Cannabis Management, as well as top officials.

Offering first dibs to individuals with past pot convictions or their relatives was an attempt to create opportunities for those who have been most adversely affected by pot policing, which resulted in Black and Latino people being arrested at disproportionately high rates.

According to a memo filed with the lawsuit, the regulatory cannabis boards “overstepped their rule-making authority,” and as a result it “indefinitely postponed the licensing of the hundreds of additional dispensaries necessary to satisfy consumer demand and to displace the illicit markets.”

The lawsuit comes as New York tries to get its potentially huge legal market into high gear almost two years after it legalized recreational marijuana for adult use. So far, 66 dispensary licenses have been awarded. The state’s fifth store, a dispensary in Ithaca, was set to open on Thursday.

The lawsuit was filed by Coalition for Access to Regulated & Safe Cannabis, a trade association that represents licensed registered medical cannabis providers, including Curaleaf, Green Thumb Industries, Acreage Holdings, and Pharmacann. The companies haven't been able to enter the adult use market in the state because of the limited licensing program, a spokesperson for the coalition said.

This isn't the first time that the state's cannabis licensing process has been legally challenged. In November, a judge temporarily blocked New York from issuing pot dispensary licenses in Brooklyn and parts of upstate New York after Variscite NY One claimed the state's selection process improperly favors in-state residents over out-of-state residents. That case is ongoing.

Meanwhile, unauthorized pot shops and trucks have popped up throughout the state.

The lawsuit contends that if licensing had been opened to all applicants, it would have curtailed illicit storefronts and generated enough tax revenue to reinvest in local communities, which are key provisions of the law that legalized recreational marijuana.

A spokesperson for the Office of Cannabis Management said he had no comment on the lawsuit.

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Maysoon Khan is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Maysoon Khan on Twitter.