A New York trial court judge has halted state regulators from processing certain cannabis dispensary licenses.
On Thursday, State Supreme Court Justice Sharon Graff issued a preliminary injunction preventing the state from processing licenses for dispensary applicants who had not secured municipal approval by November 17, 2023. The decision followed a lawsuit filed on behalf of four applicants who have secured locations but are awaiting state approval.
The plaintiffs argued that a now-waived rule requiring dispensaries to maintain a 1,000-foot distance from one another jeopardized their locations. Graff agreed, stating that the state created a scenario where a “belated designation of a secured location would be too close to a non-provisional license applicant’s previously designated secured location,” potentially invalidating the plaintiffs’ chosen sites.
The lawsuit, filed in May by attorney Marc Romanowski of Rupp Pfalzgraf, represents Organic Blooms, Niagara Nugget Blackmark, and Windward Management. It challenges the state’s rollout of the Conditional Adult Use Retail Dispensary (CAURD) program, which was limited to applicants with prior cannabis convictions and qualifying business experience.
The enabling act of March 2021 mandated that the application period for adult-use dispensary licenses be opened to all applicants simultaneously. However, in 2022, the state began processing CAURD applications nearly a year ahead of others. Justice Graff found this approach likely exceeded the state’s authority and described the review process for CAURD and non-provisional applicants as problematic.
Cannabis attorney Jeffrey Hoffman criticized the state’s regulatory process, recalling his warnings to the Cannabis Control Board during its September 12, 2023, meeting. “As long as New York continues to do their cannabis regulations wrong, we will continue to face injunctions which slow the rollout and harm the very folks that the Cannabis Law was meant to help,” Hoffman told the Law Journal.
Ryan J. McCall, a principal at McCall, Sweeney & Silva, P.C., commented on the broader frustrations caused by the state’s proximity rules. “Businesses with significant capital and business plans have had their plans thwarted due to another business simply requesting a location for an undefined period of time,” McCall stated.
The Office of Cannabis Management has not commented on the ongoing litigation. A conference is scheduled for December 18, where state regulators will address the allegations.
This ruling follows a similar 2023 case in which another judge temporarily blocked license processing on behalf of disabled veterans. That case was ultimately settled.
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