Landmark Settlement
In an unprecedented settlement that is sending shockwaves throughout the cannabis industry, the New York Cannabis Control Board has recently approved an agreement between Variscite NY One and the state Office of Cannabis Management (OCM). This agreement marks a major turning point in a contentious lawsuit that has drawn significant attention over the past year.
Plaintiff’s Victory
The settlement comes as a triumph for the plaintiff, Kenneth Gay, the majority owner of Variscite. Gay, a Michigan-based dispensary applicant, had initially seen his application for a Conditional Adult-Use Retail and Dispensary (CAURD) license rejected, leading to the filing of his lawsuit. As a significant condition of the settlement, the OCM has agreed to grant Gay his sought-after Adult Use Retail Dispensary license, breaking the regulatory stalemate that had so far stymied the growth of cannabis dispensaries in the Finger Lakes region.
Unconstitutional Allegations
Gay’s lawsuit was not without its controversies. The Michigan dispensary owner alleged that the CAURD program was unconstitutional, violating protections of interstate commerce. These claims were given weight when U.S. District Judge Gary Sharpe agreed and granted an injunction in November, effectively halting the issuance of any dispensary licenses in five regions.
Legal Hurdles
However, the U.S. Court of Appeals for the Second Circuit, in a subsequent ruling in March, scaled back the injunction to only apply to the Finger Lakes region. Despite the board members maintaining they had a “strong ground” in the lawsuit, the ongoing legal dispute and injunction were perceived as inhibiting the opening of dispensaries and slowing down the regulated supply chain.
The Road Ahead
As of now, the terms of the confidential settlement agreement are set to become public later this week, once finalized and signed. The development represents a critical moment for the cannabis industry, signaling potential shifts in how cannabis licenses are granted and how interstate commerce is viewed in the legal cannabis landscape.
