The New CAURD Lawsuits: A Stumbling Block for New York’s Cannabis Ambitions
The budding cannabis industry in New York faces a new challenge with the emergence of the New CAURD Lawsuit, marking yet another legal hurdle that could significantly impact the opening of adult-use cannabis stores across the state.
The Previous Settlement: A Brief Respite
Recently, New York regulators reached an settlement in principle with a group of disabled military veterans, temporarily resolving the Carmine Fiore v. New York State Cannabis Control Board lawsuit. This lawsuit had previously resulted in an injunction, halting the operation of over 400 Conditional Adult-Use Retail Dispensary (CAURD) licensees. The plaintiffs contended that the Office of Cannabis Management’s (OCM) approach to licensing, prioritizing individuals with marijuana-related offenses and their families, was unconstitutional.
The Legal Conundrum: Variscite LLC’s Federal Case
Variscite New York Four LLC and Variscite New York Five LLC have initiated a federal lawsuit against the state Office of Cannabis Management (OCM) and the Cannabis Control Board, coinciding with the closing of the application window for adult-use retail licenses. This New CAURD lawsuits raises questions about the state’s licensing process, particularly in its constitutional compliance.
The Crux of the Dispute: Dormant Commerce Clause and Residency Requirements
Central to the lawsuits is the accusation that New York’s licensing system, favoring state residents, violates the federal Dormant Commerce Clause. This clause plays a pivotal role in preventing states from implementing discriminatory legislation against interstate commerce. The plaintiffs argue that their exclusion, based on non-residency, constitutes a violation of this clause.
Plaintiffs’ Perspective: A Call for Equal Opportunities
The companies behind the lawsuit, both owned by an individual with a prior marijuana conviction in California, seek inclusion in the “extra priority” pool of applicants. They contend that they meet all other criteria, with residency being the sole exception. This demand highlights the broader industry call for a more equitable and inclusive licensing process.
OCM’s Stance: Silence Amidst Litigation
In line with their policy, the Office of Cannabis Management has refrained from commenting on the lawsuit. This stance is in keeping with their approach to previous legal challenges that have affected the state’s cannabis sector.
Broader Impacts: The Plight of Local Cannabis Growers
This legal standoff has far-reaching implications, particularly for local cannabis growers who face a glut of product with no legal retail outlets available. The issue underscores the cascading effects of legal hurdles on the state’s entire cannabis supply chain.
Legislative Response: Seeking Sustainable Solutions
Efforts to support the industry persist, exemplified by Senator Jeremy Cooney’s willingness to explore legislative options to enhance industry stability, such as making the Cannabis Grower Showcases a permanent feature.
Conclusion: Navigating the Legal Maze
As New York’s cannabis industry contends with the New CAURD lawsuits, the delicate balance between regulatory compliance and industry support remains a critical consideration. The outcome of this lawsuit will be a determining factor in the trajectory of cannabis commerce in New York.
