{"id":26320,"date":"2025-11-03T01:03:29","date_gmt":"2025-11-03T01:03:29","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ny\/26320\/"},"modified":"2025-11-03T01:03:29","modified_gmt":"2025-11-03T01:03:29","slug":"breaking-news-dispensary-openings-legal-wrangling-cannabis-licensing","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ny\/26320\/","title":{"rendered":"Breaking News; Dispensary Openings; Legal Wrangling; Cannabis Licensing"},"content":{"rendered":"

<\/a><\/p>\n

Subscribe to our newsletter dedicated to New York\u2019s Cannabis industry with a state-wide focus. Sign-Up now to receive the newsletters. By signing up, you agree to receive information and advertising related to cannabis, cannabis dispensaries, cultivators, processors, and similar regulated entities. View a sample \u201cMarijuana Monday\u201d newsletter<\/a>.<\/p>\n

Recent Adult-Use Dispensary Openings:<\/p>\n

Seneca Cannabis
662 Seneca Ave, Ridgewood 11385
nyhighrollers.com<\/a>
Monday through Sunday: 10AM \u2013 9PM<\/p>\n

High Rollers Cannabis
909 State Route 9, Suite #3, Queensbury 12804
nyhighrollers.com<\/a>
Monday through Saturday: 9AM \u2013 9PM
Sunday: 12PM \u2013 6PM<\/p>\n

The Flowery Haverstraw
35 Route 9W, Haverstraw 10927
thefloweryny.com<\/a>
Monday through Sunday: 10AM \u2013 10PM<\/p>\n

Victory Road Farm
556 Victory Rd, Red Creek, NY 13143
astoriabudboutique.com<\/a>
Monday: Closed
Tuesday through Saturday: 11AM \u2013 8PM
Sunday: 12PM \u2013 5PM<\/p>\n

Capital District Cannabis Clifton Park
1508 US-9, Clifton Park 12065
capitaldistrictcannabis.com<\/a>
Monday through Saturday: 9AM \u2013 9PM
Sunday: 10AM \u2013 6PM<\/p>\n

Green Leaf Wellness
971 Albany Shaker Rd, Latham 12110
glccny.com<\/a>
Monday through Friday: 10AM \u2013 6PM
Saturday: 10AM \u2013 4PM
Sunday: Closed<\/p>\n

(As of October 31, 2025)
***Denotes Delivery Only<\/p>\n

New York State CCB Issues \u201cUnreasonably Impractical\u201d Advisory Opinions Preempting Local Laws<\/p>\n

October 9, 2025 \u2013 The New York State Cannabis Control Board (CCB) issued two advisory opinions, finding local ordinances on Long Island, in Southhampton and Riverhead, \u201cunreasonably impracticable,\u201d under Cannabis Law.\u00a0 These decisions affirm that municipalities have limited ability to impose barriers that frustrate state-licensed businesses from opening within their jurisdictions.<\/p>\n

\u201cThis outcome makes clear that local laws do not override the laws of New York State,\u201d said Felicia A.B. Reid, Acting Executive Director of the Office of Cannabis Management.<\/p>\n

\u201cThe Legislature set out that cannabusiness is a legal economic driver \u2014 not to be hampered by local efforts to undermine their collective vision. The CCB has issued a clarion call to municipalities: economic development suffers when legitimate opportunities are open for some but withheld from others. Cannabusiness means jobs\u2014plant-touching and non \u2014 that support families and communities; so long as they follow the rules, they have earned the right to exist.\u201d<\/p>\n

Here are the details:<\/p>\n

Riverhead\u2019s ordinance included certain expanded distance buffers, including:<\/p>\n

1,000 feet from schools, libraries, day care; 500 feet from beaches, playgrounds, \u201ccommunity centers,\u201d children\u2019s amusements; 2,500 feet between cannabis businesses;
\n1,000 feet from residential uses;
\nCategorical bans in mixed-use buildings.<\/p>\n

The CCB held these are outside the enumerated TPM categories and conflict with state-set distances, making them unreasonably impracticable.<\/p>\n

Riverhead also imposed a municipal opinion restriction, requiring a 90-day expiration and a requirement to secure a favorable local opinion before filing any required land-use applications. The CCB found these requirements to conflict with Cannabis Law \u00a7 76, which states that municipal opinions are advisory only, and provided Riverhead with an improper local veto power over cannabis applicants.<\/p>\n

Riverhead had also imposed a one-year moratorium on permits, which the CCB also found objectionable. \u00a0The CCB stated that a blanket pause on processing cannabis applications is inconsistent with \u00a7 131(2) and Part 119, i.e., if narrower location limits are impermissible, a total shutdown plainly is also impermissible.<\/p>\n

With respect to Southampton, the CCB assessed certain special exception uses and fees imposed on applicants. Southampton identified all \u201cnon-medical cannabis dispensaries\u201d as \u201cspecial exception uses,\u201d subjecting those applicants to additional conditions set by the Southampton Planning Board, a special review process, and payment of a special fee. The ordinance also limited dispensaries to only two (2) of eight (8) business districts, while similar businesses like liquor stores can operate more broadly.<\/p>\n

The CCB referenced the TPM rules promulgated by CCB referenced previously, and stated that \u201c[i]f a local law restricting the time, place, and manner of operations does not fall within one of the actions enumerated [under Section 119.2(a)], then it is not a permissible time, place, and manner restriction and is, therefore, pre-empted and prohibited under the Class Law Section 131(2). The CCB also noted that municipalities are prohibited from \u201cimposing a special fee that is specific to cannabis businesses or the licensee that intends to operate within the jurisdiction of the municipality.\u201d<\/p>\n

Moreover, by limiting the location of such businesses to two (2) of the eight (8) business district zones (while permitting other regulated businesses to operate in broader zoning districts), doing so \u201cis not among the enumerated time, place, and manner restrictions\u201d permitted by CCB\u2019s rules.<\/p>\n

Imposing operational and design mandates also exceed the authority provided to municipalities under TPM rules. This includes: lot size and transitional yards, architectural and interior layout reviews outside historic districts, drive-thru bans, signage limits, security specifications, licensure posting and certificate-of-occupancy preconditions. The CCB found that all of these additional municipal restrictions either duplicate or conflict with CCB rules and fall outside Section 119.2.<\/p>\n

Cannabis Quick Takes<\/p>\n

October 2, 2025 \u2013 Crains New York Business is reporting that the \u201chigh-profile cannabis lifestyle brand Happy Munkey has shuttered its second New York City cannabis dispensary less than a year after it opened, a closure that at least for now appears to be indefinite, if not permanent.\u201d<\/p>\n

It is also positing that the closures could be a canary (of sorts) in the coal mine and an ominous sign for cannabis retailing in New York State.<\/p>\n

The New York Post is reporting that \u201cCannabis stocks surge after Trump posts video touting Medicare coverage for CBD.\u201d\u00a0 Donald Trump\u00a0promoted a video pushing to put cannabidiol, or CBD, under Medicare coverage.<\/p>\n

The source for the NYP story was Crains New York Business which reported that Tilray Brands surged nearly 20%, Canopy Growth jumped about 20%, and Cronos Group rose 13%. Aurora Cannabis climbed 13.3%, and Trulieve Cannabis spiked almost 20%.<\/p>\n

The video, posted last week on TruthSocial<\/a> has been making the rounds and adding to speculation that the Trump administration will legalize (or take steps to legalize) cannabis in 2026.<\/p>\n

The video was produced by The Commonwealth Project, founded by\u00a0Howard Kessler<\/a>, a Palm Beach, Florida billionaire with ties to the CBD industry.<\/p>\n

Remember that regulations around the commercial use of hemp and CBD were significantly eased through the enactment of the 2018 Farm Bill during President Trump\u2019s first term, though there are all new players involved, most strongly anti-cannabis.<\/p>\n

Cannabis Briefs:<\/p>\n

The Office of Cannabis Management (OCM), in partnership with local law enforcement in Seneca Falls, NY executed four search warrants at businesses suspected of illegally selling cannabis without a New York State license.<\/p>\n

The enforcement action took place at:
\u2022 Hemp Vibes \u2013 963 Route 5 & 20, Seneca Falls, NY 13148
\u2022 Dream Falls Convenience \u2013 82 Fall Street, Seneca Falls, NY 13148
\u2022 Smokers N. Munch \u2013 25 Bridge Street, Seneca Falls, NY 13138
\u2022 Rick\u2019s VIP \u2013 2109 Route 5 & 20, Seneca Falls, NY 13148<\/p>\n

The operation led to the seizure of significant quantities of illegal cannabis products, including: 20.20 pounds of cannabis flower; pounds of concentrate; 6.60 pounds of edibles packages.<\/p>\n

Law enforcement also confiscated several weapons, including an illegally modified firearm.<\/p>\n

Pre-Qualification: Your First Step Toward NYS Grant Funding<\/p>\n

Is your organization ready for the next round of OCM grant opportunities? The Office is reinvesting legal cannabis tax revenue into communities across the State. To apply, nonprofit organizations must be pre-qualified in the Statewide Financial System (SFS). This is a required step before submitting an application or receiving an award.<\/p>\n

Whether you\u2019re starting the process or checking an existing status, keep in mind that pre-qualification must be updated annually.<\/p>\n

Learn more and get started:\u00a0https:\/\/grantsmanagement.ny.gov\/get-prequalified\u00a0<\/a><\/p>\n

The NYS Department of Labor\u2019s Cannabis Employment & Education Development (CEED)<\/p>\n

It\u2019s Back to School Season\u2014Explore Cannabis Education and Connect with Talent<\/p>\n

Looking to build a career in the cannabis industry? Or hiring for your cannabis business? Explore SUNY, CUNY, and private colleges across the state that offer a growing number of programs in cannabis, including majors, minors, certificates, micro-credentials, and individual courses.<\/p>\n

Job seekers: Enhance your skills and knowledge by enrolling in these programs to stand out in the cannabis industry.
\nBusinesses: Find candidates with specialized training in cannabis-related fields.<\/p>\n

Find new and exciting\u00a0Cannabis Education Programs<\/a>\u00a0that drive success in the industry!
Want to learn more? Attend the Monthly Cannabis Employment Information Webinar on September 24, 2025 from 11AM \u2013 12PM.<\/p>\n

Aggrieved Cannabis Retailers File Lawsuit Against Office of Cannabis Management<\/p>\n

Coalition Seeks to Halt OCM\u2019s Policy Reversal that Forces 152 Dispensaries to Move, Calls on State to Protect Small Businesses and\u00a0New York\u2019s\u00a0Regulated Cannabis Market<\/p>\n

August 24, 2025 \u2013 According to a press release issued by Housing Works, a coalition of licensed cannabis operators are suing state regulators to block a new interpretation as to how distances are measured from a school that would force at least 152 retailers to relocate or shut down.<\/p>\n

The\u00a0lawsuit<\/a>\u00a0was filed\u00a0Aug. 15\u00a0in the New York Supreme Court in\u00a0Albany. The plaintiffs are: Conbud, The Cannabis Place, Rezidue, Summit Canna, LLC, Hush, High Fade, Elise Pelka, LLC, Housing Works Cannabis Co., Common Courtesy Dispensary, LLC, Toastree, LLC, Monarch NYC, LLC, and Luxe Leaf Boutique, LLC<\/p>\n

\u201cThe OCM\u2019s actions will jeopardize livelihoods, undermine social equity goals and further encourage consumers to turn to the illicit market,\u201d the coalition said in a joint statement. \u201cThe state threatens to cement a flawed system that forces taxpaying licensees to start over again, which is something we cannot afford to do.\u201d<\/p>\n

In\u00a0July 2025, OCM announced a reinterpretation of how the agency measures the required distance between licensed dispensaries and schools. Affected operators may be forced to move and are now in a state of noncompliance. OCM spent years in community review constructing their proximity policies to create a system that would create access to safe, regulated cannabis while ensuring operators and communities were supported.<\/p>\n

Nearly 90% of affected dispensaries were owned by justice-involved individuals, many of whom are Black and Latino.<\/p>\n

Relying on OCM\u2019s guidelines and prior approvals, the plaintiffs\u2014all Conditional Adult-Use Retail Dispensary (CAURD) or Social and Economic Equity (SEE) licensees\u2014secured leases while awaiting government approval, completed costly buildouts, hired staff and, in many, cases opened their doors to the public. \u201cIt\u2019s a process that can take years and cost an exorbitant amount of money,\u201d said\u00a0Matthew Bernardo, President of the nonprofit Housing Works, which operates the state\u2019s first licensed dispensary, Housing Works Cannabis Co, in\u00a0New York City. \u201cThere is a misconception that the cannabis industry is incredibly lucrative and corporate, but the reality is that it\u2019s made up of independent small business owners operating on thin margins with high taxes and complicated regulations. Moving is simply not an option.\u201d<\/p>\n

The suit outlines 10 causes of action, including unlawful rulemaking under State Administrative Procedures Act (SAPA); arbitrary and capricious agency action; violations of state and federal due process and equal protection clauses; regulatory taking without compensation; and violation of the Marihuana Regulation and Taxation Act\u2019s (MRTA) equity mandate.<\/p>\n

If granted, the relief sought would annul OCM\u2019s reinterpretation of \u00a7 72(6), declare the plaintiffs\u2019 existing locations compliant and permanently enjoin the state from enforcing the new proximity measurement against them. A preliminary hearing is tentatively scheduled for\u00a0August 29th.<\/p>\n

Second Circuit Court Of Appeals Throws A Wrench Into New York\u2019s Cannabis Licensing Regimen
\nCourt Says New York Cannabis Regulators Illegally Gave Preference To New York Applicants Over Out-Of-Staters For Retail Cannabis Licenses<\/p>\n

August 15, 2025 \u2013\u00a0According to the Second Circuit Court of Appeals, New York has been violating the law in how it awarded adult-use cannabis dispensary licenses.<\/p>\n

The case,\u00a0Variscite NY Four, LLC v. New York State Cannabis Control Board<\/a>, revolves around a legal challenge to New York\u2019s marijuana retail dispensary licensing system, specifically its prioritization criteria, and more specifically under the dormant Commerce Clause of the U.S. Constitution, a clause that generally prohibits states from giving priority to its own residents on economic issues, including the awarding of licenses.<\/p>\n

When New York legalized adult-use marijuana in 2021, it established a licensing system for dispensaries. \u200bThe state, in awarding licenses, gave priority to applicants who met certain criteria, including: (1) being from communities disproportionately impacted by cannabis prohibition; (2) having a low income based on objective data; and, (3) having a conviction (or a close relative with a conviction) for a marijuana-related offense under New York law before March 31, 2021. \u200b<\/p>\n

This prioritization effectively favored New York residents over out-of-state applicants, and an out-of-state applicant for a retail cannabis license sued, arguing that the cannabis law licensing criteria violated the United States Constitution.<\/p>\n

The applicants applied for and were denied priority under the New York\u2019s Adult Use program because their owners had marijuana convictions under\u00a0California law, not New York law.<\/p>\n

Citing the Dormant Commerce Clause, the plaintiffs claimed New York\u2019s prioritization system is protectionist and discriminates against out-of-state economic interests.<\/p>\n

In response, and in a nutshell, New York argued that the dormant Commerce Clause does not apply because marijuana is federally illegal under the Controlled Substances Act (CSA).\u00a0\u200b<\/p>\n

The Second Circuit Court of Appeals ruled in favor of the plaintiffs on two key points: (1) the dormant Commerce Clause does apply to New York\u2019s marijuana licensing system, even though marijuana is federally illegal; and (2) New York\u2019s prioritization of applicants with New York-specific marijuana convictions is protectionist\u00a0and unconstitutional under the dormant Commerce Clause.\u00a0\u200b<\/p>\n

\u201cCongress has given New York no clear permission to enforce protectionist marijuana licensing laws,\u201d Judge Dennis Jacobs wrote in the majority opinion. He added, \u201cNew York\u2019s prioritization of applicants with convictions under New York law is a protectionist measure that cannot stand.\u201d<\/p>\n

The Circuit Court vacated the lower court\u2019s decision denying the plaintiffs\u2019 request for a preliminary injunction and remanded the case for further proceedings.<\/p>\n

In dissent, Chief Judge Debra Ann Livingston argued that the dormant Commerce Clause should not apply to federally illegal markets like marijuana. \u200bShe reasoned that Congress\u2019s criminalization of marijuana under the CSA implicitly allows states to enact laws that restrict interstate commerce in marijuana. \u200b<\/p>\n

The case was sent back to the lower court for further proceedings, and New York may need to revise its licensing criteria to comply with constitutional requirements. The decision should not impact existing licensees, but for the thousands of applicants waiting on the Cannabis Control Board, the decision may have implications.<\/p>\n

Last month, state regulators said there were nearly 4,700 applications awaiting consideration, with more than half of them for adult-use recreational dispensaries. Many applications have been waiting since December 2023 for review, with no meaningful time frame for when the review might be completed.<\/p>\n

This case also highlights the tension between state-level marijuana legalization and federal prohibition, as well as the constitutional limits on states\u2019 ability to favor their own residents in economic regulations. \u200b It could set a precedent for how states structure marijuana licensing systems in the future.<\/p>\n

The same plaintiffs have filed similar lawsuits in a handful of states, including California, Washington, Maryland and Rhode Island.<\/p>\n

Budies Sues OCM Charging Rescission Of\u00a0Approved Location Was Illegal<\/p>\n

June 1, 2025 \u2013 According to a petition filed in the Supreme Court, Kings County (Brooklyn) on Thursday, OCM improperly and illegally rescinded the location approval and associated proximity protection previously granted Budies (a CAURD licensee) for a dispensary at 589 Metropolitan Avenue in Brooklyn.<\/p>\n

The approval, granted in December of 2024, induced Budies to make significant investments of time and capital toward securing a lease for its dispensary. According to the complaint, based on OCM\u2019s unconditional approval, Budies signed an 11-year commercial lease obligating it to pay more than $5 million if future rent for the dispensary location, along with a personal guarantee from the licenses for the first three years of rent.<\/p>\n

Budies paid the landlord a non-refundable lease deposit of $210,000, and informed OCM of both the execution of the lease and the payment of the deposit. Budies also retained architects, designers and contractors and secured insurance. The investment in the locations amounted to about $335,000 \u2013 out of pocket.<\/p>\n

Then, in April, four months after receiving its location approval, Budies was notified by email that its location approval had been \u201crescinded\u201d saying that the initial December approval had been \u201cissued in error\u201d without giving a reason for the alleged error.<\/p>\n

According to the complaint, Budies had the options of: (1) identifying a new location; (2) requesting a waiver for public convenience and advantage; or (3) request reconsideration.<\/p>\n

Budies claims in it lawsuit that OCM was not responsive and failed to provide a meaningful vehicle for reconsideration. Pleas for relief went nowhere, and Budies filed for relief in court, asking for its location approval to be reinstated.<\/p>\n

Budies, through counsel, says that the annulment of OCM\u2019s initial unconditional approval was illegal, arbitrary, capricious and an abuse of OCM\u2019s discretion. Budies also claims that OCM acted in excess of its jurisdiction and that its action denied it of due process. And, Budies argues that OCM should be \u201cequitably estopped\u201d from rescinding the approval based on its good-faith reliance on OCM\u2019s approval and the extent of the investment it made and the obligation it incurred on reliance on that approval.<\/p>\n

A court date has yet to be set. In the event that OCM\u2019s rescission cannot be vacated, Budies is asking for damages for the expenses incurred and yet to be incurred in an amount in excess of $1 million.<\/p>\n

OCM LAUNCHES \u201cBUY LEGAL MAP\u201d
\"Buy<\/a><\/p>\n

OCM LAUNCHES STATEWIDE LISTEN & LEARN SERIES<\/p>\n

Series Aims to Close Gaps in Evidence-Based Cannabis Education for, Young People, Educators, Parents, and Caregivers Across New York State<\/p>\n

Listening Sessions Will Run May-August in Schools, Libraries, and Community Hubs Across the State<\/p>\n

The New York State Office of Cannabis Management (OCM) announced the launch of a new statewide \u201cListen & Learn\u201d series focused on engaging young people and the trusted adults in their lives \u2013 including parents, mentors, educators and caregivers \u2014 to better shape the future of cannabis education in New York.<\/p>\n

As the legal cannabis market continues to grow, OCM recognizes the urgent need for youth-centered messaging that helps young people navigate the realities of cannabis in their communities and make informed choices that best protect their health.<\/p>\n

The series will feature private in-person listening sessions across the state from May through August, hosted in accessible locations by community-based youth serving organizations.<\/p>\n

The Office plans to use the sessions to produce culturally relevant, developmentally appropriate, youth driven resources that meet youth and their trusted adults \u201cwhere they\u2019re at\u201d with the information they need most\u2013\u2013answering the call from communities across the state for clearer, more accessible cannabis education. For more information and educational resources about cannabis, visit the OCM\u2019s Cannabis Education Library at\u00a0cannabis.ny.gov\/education<\/a>.<\/p>\n

Show Us The Money!<\/p>\n

Adult-Use Cannabis Tax Revenue and Retail Dispensaries in New York State<\/p>\n

All counties and New York City are eligible to receive adult-use cannabis (AUC) tax revenue from the sale of AUC products sold within their jurisdiction. The Office of the State Comptroller (OSC) has developed an interactive map (see link below) that displays the location of each AUC retail dispensary by county as well as the total amount of AUC tax revenue received by local governments to date, grouped by upstate counties, downstate counties and New York City.<\/p>\n

AUC retailers must file tax returns and remit payment of taxes due on a quarterly basis with the New York State Department of Taxation and Finance. OSC anticipates that most of the revenue associated with these payments will be distributed to local governments in January, April, July and October. OSC is responsible for making payments to counties and New York City, while counties are responsible for distributing a percentage of AUC tax revenue to cities, towns and villages that host a retail AUC dispensary within the county. OSC maintains a\u00a0website\u00a0to help local governments navigate the AUC tax revenue process, including how to record this relatively new revenue source.<\/p>\n

Click<\/a>\u00a0through the map image below to use the interactive map. Hover over a region to see the data. For example, in the Mid-Hudson Region, the 50 operating dispensaries contributed $3,913,460 in regional AUC tax revenue to date.<\/p>\n

New York City\u2019s 156 dispensaries contributed $14,803,367 through the first quarter of 2025. Check out your area on the\u00a0map<\/a>\u00a0to learn more. Data is current through April 25, 2025.<\/p>\n

\"AUC<\/a><\/p>\n

Strong Sales Data And Continued Sales Growth<\/p>\n

According to the data published by Headset, the cannabis market in New York has shown remarkable growth, particularly evident in the latest data from April 2025. The state witnessed a total sales volume of approximately $115.64 million, up from $109.38 million in March of 2025. This represents a significant year-over-year sales growth of 134.5%. Such figures not only highlight the expanding consumer base but also suggest a robust market potential that continues to attract new users and investors.<\/p>\n

Despite a slight decrease in average item prices from the previous year, the market\u2019s expansion in terms of sales and unit growth indicates a strong consumer demand that outweighs price sensitivity. This trend is crucial for stakeholders aiming to position their products strategically in a competitive landscape. The consistent growth amidst fluctuating prices underscores the market\u2019s resilience and the consumers\u2019 growing acceptance and preference for cannabis products.<\/p>\n

OCM reports robust sales in its 2024 year-end report, a trend expected to continue as the market matures and new dispensaries open.<\/p>\n

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Senate Bill Proposes More Rigidity And Limitations on Proximity To Religious and Youth Facilities<\/p>\n

Senate Bill 7275<\/a>, introduced April 8th, and referred to the Senate Committee on Investigations and Government Operations, would restrict cannabis retailers and on-site consumption sites from opening within 500 feet of a child day care center, public park or playground.<\/p>\n

New York already has location-based restrictions barring retailers and lounges from being within 500 feet of school grounds or within 200 feet of a house of worship. SB 7275 also broadens the definition of a house of worship to include religious use within mixed-use buildings, closing what the bill calls a \u201cloophole\u201d in the current statute.<\/p>\n

This bill would include child day care centers, houses of worship, public parks and playgrounds located in mixed use buildings within the proximity requirement that cannabis retail licensees or adult on-site consumption licensees may not operate a storefront. The bill also clarifies that school grounds will include public or private pre-school, nursery school, elementary school, secondary school or charter schools located in mixed use buildings for purposes of the proximity requirement for operating a cannabis storefront.<\/p>\n

The law is designed to ensure that mixed-use properties housing certain uses are included in the restricted zones. For example, a school, daycare facility, or house of worship that shares space in a mixed-use building would bar cannabis retailing or lounges within 500 feet.<\/p>\n

The proposed law is an effort to better align marijuana licensing rules with the standards already in place for alcohol retailers. Opponents say it would add another unnecessary burden for legal cannabis businesses, and that tenancies in mixed-use buildings vary significantly, are generally short-term, and needlessly limit legal cannabis retailing opportunities, and the related tax-benefits to municipal governments.<\/p>\n

Some municipalities that already allow retailing and lounges are considering incorporating their own proximity limitations in their zoning codes as a hedge against waivers granted by the state on proximity limitations.<\/p>\n

A Review of the Proposed \u201cCannabis Adult-Use Transition Act\u201d<\/p>\n

April 11, 2025 \u2013 A new bill proposed in the New York State Legislature, called the \u201cCannabis Adult-use Transition Act\u201d serves multiple purposes. In short, it increases the number of members on the state cannabis advisory board from thirteen to seventeen voting members.<\/p>\n

But, that\u2019s the least of it.<\/p>\n

The heart of the proposed law can be found in its \u201cJustification\u201d memo.<\/p>\n

JUSTIFICATION:<\/p>\n

In 2021, New York passed the Marijuana Regulation and Taxation Act, which legalized and regulated cannabis for adult-use in the state. In response to the delays in licensing, Chapter 18 of the laws of 2022 created the conditional adult-use cultivator and processor licenses to jump start New York\u2019s adult-use cannabis market with New York farmers.<\/p>\n

Due to a variety of circumstances beyond the control of New York\u2019s cannabis licensees and applicants, there have been delays and unforeseen challenges with the implementation of various components of the state\u2019s cannabis marketplace and industry ecosystem.<\/p>\n

Conditional cultivators cannot afford to process their cannabis or sell their finished products; conditional processors are struggling with limited retail outlets open; conditional adult-use retail dispensary licensees and applicants do not have ready and timely access to capital, locations, or the resources they need to become operational; and the state\u2019s medical registered organizations and patients are facing a diminishing medical cannabis market. As a result, the state\u2019s cannabis industries are losing value and jobs, patients are being left behind, and the illicit market is growing.<\/p>\n

This bill: Expands the retail outlets available to farmers pending a more comprehensive adult-use cannabis roll out; mandates CAURD licensees be provided with the support and resources envisioned in the MRTA; and clarifies the registered organizations\u2019 transition into the adult-use cannabis program.<\/p>\n

There are additional policy changes needed in the cannabis industry, but this bill attempts to address the most critical needs for the active retail licensees and workforce. New York State cannot wait to make these necessary changes or there may not be a legal market left to change.<\/p>\n

The law would expand opportunities for CAURD licensees to many of the benefits that SEE licensees have, including access to low and zero-interest loans.<\/p>\n

The law would smooth the path for ROs to transition to adult-use recreational licensees, with certain phase-in timing for ROs with multiple locations. It would also spread the fee out over several years, timing the payment with achieving certain sales goals.<\/p>\n

The law would preclude the CCB from establishing additional setbacks beyond the five hundred feet of a school grounds as such term is defined in the education law or within two hundred feet of a house of worship.<\/p>\n

The law would mandate that OCM act on proximity applications within 30 days or the request would be automatically granted (provided it complied with existing setback requirements.)<\/p>\n

And, the law would require DASNY to make a list of addresses for executed lease agreements entered into or potentially available to eligible CAURD licensees public on its website. The list would have to be updated weekly to maximize transparency.<\/p>\n

The changes to MRTA are considered relatively urgent by the bill\u2019s sponsors.<\/p>\n

Massachusetts Proposes Regulations for Marijuana Social Consumption Sites; New Jersey Opens Consumption Lounge Applications<\/p>\n

April 11, 2025 \u2013 Massachusetts is moving forward, taking steps toward the introduction of social consumption alternatives, including cannabis cafes, consumption lounges and outdoor cannabis festivals.<\/p>\n

In December, the Massachusetts CCC released a proposal for regulations concerning adult-use marijuana consumption sites. The regulations outline the licensing process, operational standards and safety protocols for various types of establishments that will allow on-site consumption of marijuana and marijuana products by adults 21 years of age or older. The establishments include cultivators, manufacturers, retailers and transporters.<\/p>\n

Social consumption sites are licensed premises where adult consumers may purchase and consume marijuana in \u201cDesignated Consumption Areas.\u201d Designated Consumption Areas\u00a0require CCC approval and can be either indoor or outdoor smoking and non-smoking areas.<\/p>\n

License Types
The proposed regulations outline several license types for social consumption.<\/p>\n

Supplemental On-site Consumption Establishments Licenses\u00a0allow existing marijuana establishments, including marijuana retailers, cultivators, product manufacturers, microbusinesses, craft marijuana cooperatives and delivery operators to apply for a license that allows the addition of on-site consumption areas to their current operations.
\nHospitality On-site Consumption Licenses\u00a0enable new or existing non-cannabis businesses to apply to offer on-site marijuana consumption. However, the consumption areas for these licensees must be in commission-approved areas that are separate from the non-cannabis business operations.
\nMarijuana Event Organizer Licenses\u00a0can be obtained to organize Temporary Consumption Events, up to five consecutive days at locations other than licensed establishments for the sale and consumption of marijuana products<\/p>\n

Operational Requirements<\/p>\n

Social Consumption Establishments must follow specific operational rules. These rules address various areas, including the handling of marijuana, sanitation, advertising, packaging and labeling, waste disposal, transportation, security and recordkeeping
.
New Jersey Opens Applications For Consumption Lounges<\/p>\n

Meanwhile, in New Jersey, applications for cannabis consumption areas opened in January 2025, with social equity designated retail businesses (owners with cannabis-related convictions or residents of Economically Disadvantaged Areas), getting first dibs. On April 2nd, the portal opened for all other microbusinesses and diversity-owned dispensaries (minority-owned, woman-owned, disabled veteran-owned). And on July 2nd, applications will open for all other retail operators.<\/p>\n

The New Jersey application fee is $1,000 ($200 submission fee + $800 approval fee).\u00a0The annual licensing fee is $1,000 for microbusinesses and $5,000 for standard businesses.<\/p>\n

Municipal approval is required, as are Standard Operating Procedures for the handling of cannabis, age verification, the provision of information on safe consumption, and removal of unused cannabis from the premises.<\/p>\n

Other restrictions apply, including a ban on the sale of food, beverages, alcohol and tobacco, though patrons can bring their own food or have it delivered. There are limitations on the amount of cannabis patrons can purchase, and no free samples are permitted.<\/p>\n

The ventilation requirements applicable to cigar lounges are applicable.<\/p>\n

New York Challenges<\/p>\n

New York historically walks behind New Jersey and other states in developing a full-throated cannabis industry and lags in adoption of rules and regulations that support licensees and their business investments.<\/p>\n

When MRTA first passed, municipal governments had to decide whether to\u00a0opt out<\/a>\u00a0of allowing retailing and consumption lounges within their municipal boundaries. A mix of the jurisdictions that authorized retailing, also allowed consumption lounges.<\/p>\n

An on-site consumption license, as authorized by MRTA, would allow license holders to sell cannabis products to adults twenty-one years of age and older as well as provide space for adults to consume the cannabis they purchase on the same licensed premises.<\/p>\n

Licensees can\u2019t apply for a license to open a lounge because the Office of Cannabis Management has yet to put regulations in place.<\/p>\n

\u201cThe Office continues to develop and deploy the business licenses listed in the cannabis law, prioritizing first the licenses that are critical to establishing a stable and sustainable supply chain, including cultivation, processing, and retail,\u201d said OCM rep Taylor Randi Lee.<\/p>\n

\u201cCurrently the Office is assessing the regulatory approaches for consumption licenses in New York, including evaluating outcomes and best practices from other jurisdictions, and analyzing the public health and safety considerations for employees and patrons.\u201d<\/p>\n

Regulations governing cannabis lounges and establishment of a competent application process are the next steps.<\/p>\n

New Requirements For Workforce Training<\/p>\n

April 6, 2025 \u2013 Last week, the New York State Office of Cannabis Management (OCM) and the New York State Department of Labor (NYSDOL) announced the launch of the Responsible Workforce Training Program, requiring all persons performing activities under a licensed cannabis business, complete Responsible Workforce Training.
The initiative is aimed at providing comprehensive safety education to workers in the cannabis industry.
Responsible Workforce Training includes four training requirements:<\/p>\n

A Cannabis Product Safety and Responsibility course developed by the OCM which reviews health and safety in the regulated cannabis industry.
\nA Cannabis Workforce Responsibility course developed by the New York State Department of Labor which reviews labor standards and workplace health and safety in the regulated cannabis industry.
\nAt least two hours of training for the specific activity in which the licensee (employer) is approved to pursue. This is determined and provided by the licensee (employer); and
\nAn implicit bias training determined and provided by a licensee (employer).<\/p>\n

The cannabis regulations require that all persons performing activities under a licensed cannabis business complete Responsible Workforce Training within 30 days of the employee\u2019s start date.
The Responsible Workforce Training consists of four required components including:<\/p>\n

Cannabis Product Safety and Responsibility:\u00a0An\u00a0hour-long free online<\/a>\u00a0course focusing on protecting health and safety in the regulated cannabis industry. The course educates participants on key facts about cannabis products and New York State regulations that impact daily cannabis operations.
\nCannabis Workforce Responsibility:\u00a040-minute free online<\/a>\u00a0course highlighting labor standards, worker rights, and workplace health and safety.
\nLicense Education:\u00a0At least two hours of training provided by a licensee that is intended to assist in training employees on the specific activities specified by their license. This training may include a combination of on-the-job training and written instructional materials offered by the licensee.
\nImplicit Bias or Cultural Competency Training:\u00a0At least one hour of training is intended to identify and address unconscious prejudices that may influence decision-making and behavior. Cultural competency training focuses on understanding and respecting diverse cultural backgrounds to improve interactions.<\/p>\n

Once the course is complete, employees are required to attest to participation and completion through an\u00a0online portal<\/a>\u00a0and share the confirmation email with their employer for their employment records..
The Responsible Workforce Training program empowers workers with valuable information on product safety, labor standards, and best practices, fostering a culture of responsibility and compliance across the entire supply chain. The program is designed to enhance workplace safety and reinforce New York State\u2019s commitment to creating a fair, accountable, and sustainable cannabis industry.<\/p>\n

President Trump\u2019s \u201cGifts\u201d To New York\u2019s Cannabis Industry<\/p>\n

March 30, 2025 \u2013 While most of the attention on President Trumps on-again, off-again tariffs, and how the tariffs will raise costs for New York\u2019s fledgling marijuana industry, Trump\u2019s anti-immigrant agenda is also affecting New York cannabis growers.<\/p>\n

The New York Times reports that federal immigration agents visited Hepworth Farms last week and served the owners with a subpoena for payroll records. Gail Hepworth, who runs the 207-year-old farm with her twin sister, Amy, said they decided to turn over the records after meeting with their workers.<\/p>\n

Hepworth AG, Inc., a licensed Adult-Use Conditional Processor in the State of New York.<\/p>\n

All employers are required to verify that everyone they hire is eligible to work in the U.S. For assistance, check out this presentation by\u00a0Cornell Agricultural Workforce Development<\/a>.<\/p>\n

Tariffs, the other third-rail for cannabis growers and processors, will add costs to fertilizers, hoop-houses, vaping equipment, packaging and other components of both cultivating and processing at a time when prices are generally falling, squeezing profit margins on the already fragile cannabis economy.<\/p>\n

If tariffs drive up prices, there may be a renewed push on consumers to return to the illicit market. Small businesses that can\u2019t absorb costs may close, forcing industry consolidation to larger players. If the goal is to bring manufacturing back to the United States, domestic incentives to develop manufacturing expertise must accompany tariffs.<\/p>\n

State-By-State Adult-Use Recreational Cannabis Tax<\/p>\n

Whatever Happened To Consumption Lounges?<\/p>\n

March 30, 2025 \u2013 The Marijuana Regulation and Taxation Act of 2021 legalized adult-use cannabis and retail sales. The same legislation also allowed on-site marijuana consumption lounges, at least in theory. In practice, there is no mechanism, some four years after authorization, to open a consumption lounge in New York.<\/p>\n

When MRTA first passed, municipal governments had to decide whether to\u00a0opt out<\/a>\u00a0of allowing retailing and consumption lounges within their municipal boundaries. A mix of the jurisdictions that authorized retailing, also allowed consumption lounges.<\/p>\n

An on-site consumption license, as authorized by MRTA, would allow license holders to sell cannabis products to adults twenty-one years of age and older as well as provide space for adults to consume the cannabis they purchase on the same licensed premises.<\/p>\n

Licensees can\u2019t apply for a license to open a lounge because the Office of Cannabis Management has yet to put regulations in place.<\/p>\n

\u201cThe Office continues to develop and deploy the business licenses listed in the cannabis law, prioritizing first the licenses that are critical to establishing a stable and sustainable supply chain, including cultivation, processing, and retail,\u201d said OCM rep Taylor Randi Lee.<\/p>\n

\u201cCurrently the Office is assessing the regulatory approaches for consumption licenses in New York, including evaluating outcomes and best practices from other jurisdictions, and analyzing the public health and safety considerations for employees and patrons.\u201d<\/p>\n

Meanwhile, in New Jersey, applications for cannabis consumption areas opened in January 2025, with social equity designated retail businesses (owners with cannabis-related convictions or residents of Economically Disadvantaged Areas), getting first dibs. On April 2nd, the portal opens for all other microbusinesses and diversity-owned dispensaries (minority-owned, woman-owned, disabled veteran-owned). And on July 2nd, applications will open for all other retail operators.<\/p>\n

New York, as has been historically accurate, walks behind New Jersey and other states in developing a full-throated cannabis industry and lags in adoption of rules and regulations that support licensees and their business investments.<\/p>\n

Federal Court Dismissed Due Process Challenge By\u00a0NYC Shuttered Businesses<\/p>\n

March 30, 2025 \u2013 Last week, a federal court dismissed a complaint<\/a>\u00a0filed by twenty-seven businesses that claimed New York\u2019s sealing orders and OATH hearings failed to provide businesses accused of the unlicensed sale of cannabis adequate due process in contesting government closures of their businesses.<\/p>\n

The twenty-seven plaintiffs, each treated somewhat differently by the NYC Sheriff and OATH hearing officers had one consistent complaint \u2013 the process by which they can challenge closures denied them the right to operate and re-open their businesses, in particular, those parts of their businesses that had nothing to do with the sale of cannabis.<\/p>\n

The court addressed and recognized that the plaintiffs had an ongoing and legitimate \u201cproperty interest\u201d in their non-cannabis-related business activity and weighed those interests against the government\u2019s interest in protecting the public from illegal cannabis sales.<\/p>\n

But the real question the Court wrestled with was whether the system set up by New York State provided adequate \u201cdue process\u201d to businesses subject to closure.<\/p>\n

The Court outlined the various opportunities a business had to challenge closure, to secure a prompt evidentiary administrative hearing, to provide evidence outside a hearing setting, and ultimately, if dissatisfied with the result to file an action for immediate relief in Court under New York\u2019s Article 78 (a procedure that allows an aggrieved business to seek injunctive relief in court).<\/p>\n

Balancing the State\u2019s interests against the deprivations of the business owner and considering the various avenues of relief, the Court favored the state scheme and dismissed the complaint by the twenty-seven business owners, saying that there was adequate due process protections in the law as written and as used by several of the business owners.<\/p>\n

To fully understand the \u201cdue process\u201d landscape may require some legal training, but we linked the\u00a0Court\u2019s Order here<\/a>\u00a0for review.<\/p>\n

Governor Advocates For Using Cannabis Odor As Evidence Of Drugged Driving<\/p>\n

February 24, 2025 \u2013 A debate is raging in Albany. Governor Hochul is advocating to allow law enforcement to rely on the existence of cannabis odor as evidence of \u201cdrugged driving,\u201d according to her annual executive budget.<\/p>\n

Top lawmakers, including Assembly Majority Leader Crystal Peoples-Stokes, an author of the state\u2019s adult-use bill and Office of Cannabis Management acting and deputy Executive Director Felicia A.B. Reid as pushing back, calling the measure \u201cunnecessary\u201d and saying that it \u201cundermines the basic tenets\u201d of the adult-use law and decriminalization more broadly.<\/p>\n

The Governor\u2019s Office\u2019s goal is to \u201ckeep New Yorkers safe from drugged driving,\u201d but the law specifically outlaws using cannabis odor as a reason for vehicle stops and searches was an integral part of the original passage of MRTA.<\/p>\n

The reality is also that simply working with cannabis can leave workers, especially those working in cultivation or processing, carrying the odor into their vehicles, even if they change clothes or work with protective gear. The plan to allow stops and searches for cannabis odor effectively can criminalize working in the cannabis industry.<\/p>\n

The Governor\u2019s office is negotiating some sort of compromise with the state legislature. The proposed budget language says the odor of cannabis could be used to support a court-ordered blood test, but the concern is it could also be used to establish probably cause for a host of other criminal activity.<\/p>\n

Prior to MRTA, law enforcement used the smell of cannabis to justify car searches and arrests, which disproportionately led to the incarceration of minorities.<\/p>\n

Effort To Switch To Annual Tax Payments Offers Monthly Reporting As A Compromise<\/p>\n

February 24, 2025 \u2013 A group of key New York cannabis stakeholders have banded together to advocate for a change from the current quarterly tax payment schedule for wholesalers, cultivators and processors to an annual one. The proposal was rejected by Governor Hochul last year.<\/p>\n

Several industry leaders are working to raise awareness about this issue and work to make a change in 2025, and are proposing a compromise solution: in addition to switching to an annual payment cycle, distributor would be required to submit monthly revenue reports to New York\u2019s Department of Taxation and Finance.<\/p>\n

Nicolas Guarino is the CEO and Co-Founder of\u00a0Jaunty<\/a>\u00a0\u00a0says, \u201cThe current quarterly tax payment schedule is problematic because businesses must pay taxes before receiving payments from that period\u2019s sales, which almost guarantees that even the most successful companies remain strapped for cash.\u201d He says the compromise allows the state agency knows how much money they\u2019ll be receiving and can budget accordingly and that this transparent practice is similar to what has been required from alcohol distributors for years.<\/p>\n

Vince C. Ning, CEO and Co-Founder of\u00a0Nabis<\/a>\u00a0says, \u201cThe recent veto of the cannabis excise tax reform bill is a missed opportunity for New York\u2019s industry, but it also presents a chance for regulators to rethink their approach. The current quarterly tax payment deadlines combined with the burdensome 9% tax rate, places unreasonable strain on entrepreneurs and operators trying to establish themselves in New York\u2019s emerging industry.\u201d<\/p>\n

OCM Is Hiring; Multiple Opportunities Around The State; Join A Virtual Career Session<\/p>\n

February 24, 2025 \u2013 Governor Hochul has proposed spending $5 million to hire 29 additional staffer to assist with enforcement, compliance, licensing and legal counsel at the Office of Cannabis Management.<\/p>\n

The agency currently has 215 staffers, 35 more since OCM acting and deputy Executive Director Felicia A.B. Reid took over.<\/p>\n

\u201cThat [29 more employees] is a good start, but I think we also have to think about when we\u2019re staffing up to make sure we\u2019re doing so in a way where we\u2019re not also losing folks,\u201d Reid said.<\/p>\n

OCM has posted a host of job offerings on\u00a0StateJobsNY website<\/a>. Jobs include Program Specialists, Program Analysts, Administrative Assistants, Assistant Counsel, and Public Information Specialists. Positions are available in different parts of the state, some travel is required, and salaries are competitive.<\/p>\n

Legal Online Cannabis Activities Locator (LOCAL) Map!<\/p>\n

OCM has introduced a new mapping tool for searching out Adult-Use, MicroBusiness, Medical Dispensaries, and Coming Soon (in the same categories). The map is easy to use, and has a wealth of information. You can access information about open and soon-to-be-open facilities, including license number, address, license type, and website.<\/p>\n

<\/a><\/p>\n

This is a real step forward for both the consumer and licensee. Check it out at:\u00a0local.cannabis.ny.gov<\/a><\/p>\n

New York State Cannabis Industry Hits More Than $1 Billion in Retail Sales; Details From Annual Report<\/p>\n

January 4, 2025 \u2013 So, if this sounds a bit like a press release, that\u2019s because OCM has summed up all of its accomplishments in a year-end 2024 report<\/a>. It is no small matter what has been accomplished, despite detractors, established dispensaries seeking to preserve their competitive advantages, individuals who feel slighted by OCM, and litigants who are willing to shut down the industry to carve out their piece of the pie.<\/p>\n

All in all, though, it has been a strong and transformative year for New York cannabis, as highlighted in the just released OCM Annual Report. Report highlights below:<\/p>\n

2024 in Review<\/p>\n

Over 5,250 Licenses, Permits, and Registrations issued or provisionally approved to date in State Fiscal Years 2023-2024 and 2024-2025<\/p>\n

221 Adult-Use Cultivator Licenses
\n292 Adult-Use Processor Licenses
\n569 Conditional Adult-Use Retail Dispensary Licenses
\n448 Adult-Use Retail Dispensary Licenses
\n185 Adult-Use Distributor Licenses
\n272 Adult-Use Microbusiness Licenses
\n3,265 Cannabinoid Hemp Licenses and Permits
\n17 Registered Organizations<\/p>\n

269 Adult-Use Retail Dispensaries open for business
\n54.1 percent of Adult-Use Licenses issued to social and economic equity businesses
\n$757.8 million in Adult-Use retail sales in 2024 as of November 30, 2024
\n$80.2 million in tax, fee, and fine revenue in State Fiscal Year 2023-2024
\n$67 million in tax, fee, and fine revenue by the mid-point of State Fiscal Year 2024-2025<\/p>\n

EQUITY + COMMUNITY PARTNERSHIPS + TRAINING<\/p>\n

OCM continued its support for equity applicants and licensees into 2024 through its programs, including the Cannabis Hub and Incubator Program (CHIP) SEE Application Assistance, collaborating with Technical Assistance Providers, CHIP Academy, and the CAURD Accelerator Program.
\nTo significantly improve license processing, and enhance transparency, OCM implemented\u202fa single point of contact (SPOC) licensing review model.
\nIn partnership with the Cannabis Advisory Board, opened the application window for Community Reinvestment Program grants, which will invest in neighborhoods that have been historically under-resourced, underserved, and over-policed.
\nIn Feb. 2024, the OCM Veterans Taskforce was established to support, educate, and provide resources related to cannabis to the veteran population.
\nIn 2024, 22 Advanced Roadside Impaired Driving Enforcement Trainings were conducted by the Governor\u2019s Traffic Safety Committee (GTSC) with support from OCM, training 797 officers in necessary skills to identify impaired driving.
\nAdditionally, four Drug Recognition Expert (DRE) Schools were held by GTSC with support from OCM, adding 60 newly certified DRE officers to the force and bringing the number of active DRE-Certified Officers in NYS to 445.<\/p>\n

MEDICAL CANNABIS<\/p>\n

Over 100,000 patients registered with the Medical Cannabis Program
\nNearly 8,500 Registered Caregivers
\n4,454 Certifying Providers
\n21 Medical Dispensaries
\n11 Medical and Adult-Use Co-located Dispensaries
\n3,550 Lots of medical cannabis products laboratory tested
\n2024 Medical Cannabis campaign earned over 9.8 million impressions, over 42,500 clicks, and prompted 1 million video completions<\/p>\n

ENFORCEMENT<\/p>\n

1,300 enforcement inspections conducted
\n450 businesses padlocked
\n16,900 pounds of illicit products seized
\n$68.5 million street value of products seized
\n8,700 Lots of adult-use cannabis products laboratory tested
\n431 field hours of compliance inspections<\/p>\n

New York\u2019s cannabis strategy is to provide a safe and fair marketplace for small businesses and entrepreneurs across the state. Say what you will, it has not always been smooth, and we still fall behind other states similarly situated, but the seeds are planted, and the rewards are being reaped.<\/p>\n

Show Us The Money!<\/p>\n

Adult-Use Cannabis Tax Revenue and Retail Dispensaries in New York State<\/p>\n

January 4, 2025 \u2013 All counties and New York City are eligible to receive adult-use cannabis (AUC) tax revenue from the sale of AUC products sold within their jurisdiction. The Office of the State Comptroller (OSC) has developed an interactive map (see link below) that displays the location of each AUC retail dispensary by county as well as the total amount of AUC tax revenue received by local governments to date, grouped by upstate counties, downstate counties and New York City.<\/p>\n

AUC retailers must file tax returns and remit payment of taxes due on a quarterly basis with the New York State Department of Taxation and Finance. OSC anticipates that most of the revenue associated with these payments will be distributed to local governments in January, April, July and October. OSC is responsible for making payments to counties and New York City, while counties are responsible for distributing a percentage of AUC tax revenue to cities, towns and villages that host a retail AUC dispensary within the county. OSC maintains a\u00a0website\u00a0to help local governments navigate the AUC tax revenue process, including how to record this relatively new revenue source.<\/p>\n

Click<\/a>\u00a0through the map image below to use the interactive map. Hover over a region to see the data. For example, in the Mid-Hudson Region, there were 29 operating dispensaries contributing $1,824,517 in regional AUC tax revenue. Check out your area on the map to learn more.<\/p>\n

\"Local<\/a><\/p>\n

Medical\u00a0Cannabis\u00a0Providers\u00a0Challenge\u00a0Constitutionality\u00a0Of\u00a0New\u00a0York\u00a0Adult-Use\u00a0Market\u00a0Entry\u00a0Fee<\/p>\n

Legal Complaint Outlines How \u2018Special Licensing Fee\u2019 is the Latest Example of Cannabis Regulators Overstepping Their Role, Systematically & Arbitrarily Blocking Medical Cannabis Operators from Serving the Adult-Use Market<\/p>\n

December 6, 2024 \u2013 The New York Medical Cannabis Industry Association (NYMCIA)\u00a0\u2013\u00a0representing licensed registered medical cannabis operators \u2013 filed a lawsuit challenging the constitutionality of the\u00a0$20 million \u201cspecial licensing fee\u201d established by state regulators.<\/p>\n

The lawsuit, filed in the New York State Supreme Court in Albany, alleges that the New York State Office of Cannabis Management (OCM) and the New York State Cannabis Control Board (CCB) overstepped their authority, subverted the intention of the state Legislature in the 2021 Marihuana Regulation And Taxation Act (MRTA) and assessed a punitive tax in the guise of a special licensing fee.<\/p>\n

According to its press release: \u201cIn establishing a \u201cspecial\u201d fee that is a magnitude higher than any other state in the nation has charged for a cannabis license of any kind, New York has reduced the potential for a vibrant adult-use cannabis market, has undercut its own stated social equity goals, and has compelled eleven medical-only dispensaries to close leaving medical patients unserved. By setting the financial bar for medical operator entry into the adult-use program unattainably high, operators cannot afford the special licensing fee. This onerous fee has kept these medical operators out of the adult-use cannabis retail market, deprived New York State of tax revenue, and is deteriorating patients\u2019 access to medical cannabis.\u201d.<\/p>\n

As outlined by the MRTA, the CCB was authorized to assess medical operators with a one-time special licensing fee to allow these operators to also serve adult-use consumers. The MRTA further provided that the \u201cone-time\u201d fee must be \u201can amount to adequately fund social and economic equity and incubator assistance\u201d.<\/p>\n

In response to a public comment period, CCB and OCM acknowledged that they disregarded the MRTA\u2019s direction and instead devised the Fee to \u201cfacilitate[] fair competition amongst all operators\u201d\u00a0and\/or to effectively exclude the ROs from the adult-use retail market altogether.<\/p>\n

The lawsuit seeks to invalidate the so-called fee because it (i) violates the separation of powers doctrine, (ii) constitutes an impermissible tax in the guise of an administrative fee, and (iii) violates the Equal Protection and (iv) Taking Clauses of the New York Constitution.<\/p>\n

\u201cAs a result of this unconstitutional and punitive fee, Defendants have prevented many medical operators from dispensing adult use cannabis and decimated the overall enterprise value of these operators.\u201d<\/p>\n

\u201cNew York\u2019s\u00a0repeated attempts to block medical cannabis providers from participation in the adult-use market is unacceptable, but sadly, not surprising,\u201d said Matthew Schweber, of Feuerstein Kulick LLP.
\u201cFor the New York cannabis market to fully live up to its stated potential, the regulators must lower the barriers to entry for medical providers and embrace what the law clearly intends for them \u2013to serve as a mechanism to fuel social equity participation.\u201d<\/p>\n

To read the full complaint,\u00a0click here<\/a>.<\/p>\n

Connecticut Cannabis Map<\/p>\n

Maryland Cannabis Map<\/p>\n

\ufeff<\/p>\n

Where Does Donald Trump Stand On Cannabis Reform?<\/p>\n

November 10, 2024 \u2013 Kamala Harris made her views clear on cannabis reform. She supported re-scheduling and possibly legalization at the federal level, and was prepared to offer a raft of incentives to support social equity programs.<\/p>\n

Donald Trump may be a bit harder to read, but at least at the state level, taking him at his word, he supported (even endorsed) the failed effort in Florida to legalize adult use cannabis.<\/p>\n

He supported changes to the banking laws sought by cannabis industry players. He also supported the cannabis rescheduling process initiated by the Biden administration, with hearings scheduled for the first weeks of his new term.<\/p>\n

Of course, voicing support is very different than taking the steps necessary to implement actual reforms.<\/p>\n

Republicans generally oppose marijuana reform. Changes to the banking laws (in whatever shape they take) have to be initiated and pass the new Republican Senate majority.<\/p>\n

Also, Trump can\u2019t act alone. Whomever he chooses to serve as Attorney General will put his or her own imprint on how the federal government interacts with those states that have passed adult use cannabis laws. In Trump\u2019s last go-round, Attorney General Jeff Sessions walked back Obama\u2019s hands-off approach to federal involvement in state cannabis industries. We don\u2019t know yet who Trump will choose as Attorney General, but prosecutorial discretion lies largely (but not exclusively) with the AG\u2019s office.<\/p>\n

Regarding the Florida legalization effort, Trump said, \u201csomeone should not be a criminal in Florida, when this is legal in so many other States. We do not need to ruin lives and waste taxpayer dollars arresting adults with personal amounts of it on them, and no one should grieve a loved one because they died from fentanyl laced marijuana.\u201d<\/p>\n

From his statement, one can glean that he is at least aware of the rigorous testing and stringent licensing laws that enable safe, clean, untainted product produced by licensed cultivators and processors and the sold through regulated retailers. We can assume he knows the risks of selling untested cannabis from unlicensed sellers.<\/p>\n

Trump did express some concerns about the Florida initiative, and said, \u201cWe need the State Legislature to responsibly create laws that prohibit the use of it in public spaces, so we do not smell marijuana everywhere we go.\u201d<\/p>\n

\u201cIn Florida, like so many other States that have already given their approval, personal amounts of marijuana will be legalized for adults with Amendment 3,\u201d Trump said. \u201cWhether people like it or not, this will happen through the approval of the Voters, so it should be done correctly.\u201d<\/p>\n

Despite Trump support for both medical marijuana as being \u201cabsolutely amazing\u201d for patients, and adult use marijuana in Florida, the initiative did not garner the 60% of the vote necessary for passage.<\/p>\n

Remember that during Trump\u2019s first term, he signed a sweeping agriculture bill that legalized the production of hemp after decades of prohibition. And, during his first term, he supported a bill that allowed states to set their own cannabis policies, outside of federal law.<\/p>\n

His clearest declaration of support came during the campaign when he said his administration would \u201ccontinue to focus on research to\u00a0unlock the medical uses of marijuana to a Schedule 3 drug, and work with Congress to pass common sense laws, including safe banking for state authorized companies, and supporting states\u2019 rights to pass marijuana laws, like in Florida, that work so well for their citizens.\u201d<\/p>\n

So, whichever way the election went, the two candidates shared a basic approach to cannabis \u2013 letting the states continue to decide, supporting banking reform efforts, and rescheduling. Legalization at the federal level may have stood more of a chance under a Harris administration.<\/p>\n

The major uncertainties now are Trump\u2019s choice for Attorney Geneal and how independent that person is in his or her thinking, and how conservative the new Republican majority in the Senate will be on the issue.<\/p>\n

The other issue, less spoken about, is the influence of Christian Nationalism on marijuana policy \u2013 with some saying cannabis is God\u2019s perfect medicine, and other saying cannabis use is a sin. Given the influence Christian Nationalists have on the Republican Party, their views can neither be discounted nor ignored.<\/p>\n

For these issues and how they play out, we\u2019ll have to wait and see.<\/p>\n

Cannabis Rescheduling Pushed Back To 2025; More Questions Than Answers<\/p>\n

November 10, 2024 \u2013 Hopes for rescheduling of cannabis before year-end were dashed when Chief Administrative Law Judge (ALJ) John Mulrooney found fault with the DEA\u2019s list of witnesses.<\/p>\n

Mulrooney said the list was inadequate for purposes of the hearing. It was sent without addresses or phone numbers and failed to state whether the interested party would be adversely affected or aggrieved by the proposed regulation change.<\/p>\n

The hearing, scheduled to start on December 2nd\u00a0won\u2019t include witness testimony or documentary evidence until at least early January or February of 2025.<\/p>\n

The order included a letter from the DEA\u2019s Anne Milgram listing her approved list of witnesses:<\/p>\n

Village Farms International (VFF), Shane Pennington of Porter Wright
\nNational Cannabis Association (NCIA) Aaron Smith and Michelle Rutter Friberg
\nAmerican Academy of Hospice and Palliative Care, Dr. Chad Kollas MD
\nCannabis Bioscience International Holdings, John Jones
\nHemp for Victory
\nState of Connecticut Cannabis Ombudsman Erin Kirk
\nMassachusetts Cannabis Advisory Board, Ellen Brown
\nVeterans Initiative 22, Shanetha Garulay
\nThe Doc App, dba My Florida Green, Nicholas Garulay, Jason Castro
\nThe Commonwealth Project, Katy Green
\nSaint Michael\u2019s College, Ari Kirshenbaum PhD
\nNational Drug and Alcohol Screening Association, Jo McGuire
\nSmart Approaches to Marijuana, Patrick Philbin
\nInternational Academy on the Science and Impact of Cannabis, Roneet Lev
\nCannabis Industry Victims Educating Litigators, David Evans Sr.
\nKenneth Finn MD
\nNational Transportation Safety Board, Jennifer Homendy
\nPhillip Drum, Pharm D
\nState of Nebraska, Attorney General Mike Hilgers
\nInternational Association of Chiefs of Police
\nDrug Enforcement Association of Federal Narcotics Agents
\nAmerican College of Occupational and Environmental Medicine, Natalie Hartenbaum
\nCommunity Anti-Drug Coalitions of America, Sue Thau
\nTennessee Bureau of Investigations
\nNational Sheriff\u2019s Association<\/p>\n

The participants were told that they needed to provide additional information by Nov. 12 including their names, addresses, phone numbers and the general mission of their practice or business. The list did include email addresses for each proposed witness.<\/p>\n

The hearings will be livestreamed with media access granted to a limited number of credentialed media.<\/p>\n

Questions legal and financial experts are studying include how rescheduling affects banking and other laws. As reported in Forbes: The American Institute of Certified Public Accountants sent a\u00a0letter<\/a>\u00a0to the Internal Revenue Service and the Department of the Treasury on Monday, urging them to update their guidance for cannabis businesses.
This request comes as cannabis may soon be rescheduled to Schedule III of the Controlled Substances Act, which would allow these businesses to operate without the restrictions imposed by section 280E.<\/p>\n

Recommendations included retroactive treatment for expenses previously subject to section 280E, clarification of\u00a0\u00a0issues stemming from prior section 280E disallowance, uniform tax treatment among cannabis businesses, and a volunteer disclosure program that would allow business previously subject to 280E\u2019s restrictions to understand the new landscape without fear of repurcussion.<\/p>\n

Attorney General James Secures $9.5 Million Judgment Against Unlicensed Cannabis Store Owner in Ontario County<\/p>\n

October 27, 2024 \u2013 Canandaigua Dispensary Owner Fined $9.5 Million for Selling Cannabis Without a License and Ignoring Notice to Stop OperatingNew York Attorney General Letitia James secured a $9.5 million judgment against the owner of an unlicensed cannabis dispensary in Ontario County. George West, the owner of the unlicensed dispensary Jaydega 7.0, ignored a June 2023 notice and order from the Office of Cannabis Management (OCM) to stop operating without a license. The Office of the Attorney General (OAG) and OCM obtained a judicial closing order that shut down Jaydega 7.0 in November 2023. The money judgment requires West to disgorge more than $1 million of illegal profits he got from selling cannabis without a license and pay $8.4 million in penalties for continuing to sell cannabis after being ordered by OCM to stop.<\/p>\n

New York\u2019s Cannabis Law requires any person who cultivates, processes, or sells any cannabis product to be registered and licensed by the New York State Cannabis Control Board. The law imposes a $10,000 penalty for each day an individual sells cannabis without a license, and a $20,000 penalty for each day an individual continues to sell cannabis after receiving an order to cease operating from OCM. Additional revenue-based civil penalties may also be imposed based on the amount of the unlicensed sales. The $9.5 million judgment against West resulted from a combination of disgorgement, administrative fines, daily penalties, and revenue-based penalties for West\u2019s unlicensed activities.<\/p>\n

George West operated his cannabis store on Main Street in Canandaigua and was selling cannabis without a license since at least September 2022. On June 28, 2023, OCM conducted an administrative inspection of Jaydega 7.0, confirmed West was selling cannabis without a license, and seized more than 200 pounds of cannabis and cannabis products. Following the inspection, OCM sent West a notice and order to stop operating and requested West provide an accounting and full financial disclosure of his operations at Jaydega 7.0. Although West refused to provide this information, OCM obtained financial records showing that West recorded nearly $2.4 million in sales revenue from June 2022 through October 2023. West continued to sell cannabis without a license until OCM and OAG obtained a court order mandating the closure of the Jaydega 7.0 store in November 2023.<\/p>\n

Cannabis products sold by unlicensed businesses are not lab tested by OCM facilities, can be unsafe, and are not taxed. The OAG is authorized upon request by OCM to bring a proceeding against any person who violates the Cannabis Law.<\/p>\n

Illegal Dispensaries Hurt Suburban & Rural Operators, Municipalities<\/p>\n

September 29, 2024 \u2013 The problem of illegal, unlicensed dispensaries is not just an urban one, though most of the attention seems to be focused on New York City and other urban environs. Just north of NYC, in Rockland County, four of the five towns opted-out of cannabis retailing, and just a handful of villages opted in. In Rockland, a county of over 330,000 people, there is one licensed, operating dispensary.<\/p>\n

\"HazyThat said, it is possible to buy cannabis just about everywhere around the county. Put yourself in the shoes of the legal operator who spent a large fortune securing its license, its storefront, its inspected inventory. How is that dispensary supposed to compete with the illegal operator? What about the municipal government that opted in to receive a share of sales tax revenue? And, what\u2019s to do about the wholesalers and distributors in New York (and elsewhere) who supply the illegal operator with product?<\/p>\n

In a small victory for both the sole licensed operator and the Village of Piermont, Village officials (with the help of New York State) closed down the Hazy Joint, operating openly and illegally on Route 9W in Piermont. The Hazy Joint operated for months just steps from a licensed dispensary that had yet to open its doors, not knowing if it ever could, or how it would,\u00a0compete with an illegal seller less than 500 feet away.<\/p>\n

Well, that operation is padlocked, its merchandise seized. What happens next is up in the air, but it would seem that the best course is to come down on the landlord (who should have a duty to know who it is renting to), and more importantly, the suppliers (wherever they are). The Hazy Joint is just one of too-many-to-count illegal operators in Rockland County. It is likely the same elsewhere, everywhere.<\/p>\n

Federal Advisory Panel Calls For Larger Government Role In Cannabis As Flower Potency Increases\u00a0\u00a0<\/p>\n

September 29, 2024 \u2013 Marijuana is more potent and contains more THC than in years past.<\/p>\n

Earlier this week, the Centers For Disease Control & Prevention reported the need for the federal agency to take a deeper dive into cannabis policy and health.<\/p>\n

About 18 million Americans acknowledge daily, or near-daily, cannabis use. That number exceeds the number drink alcohol.<\/p>\n

\u201cWe\u2019d like the federal government to step up to provide some leadership in this area,\u201d said Dr. Steven Teutsch of the University of Southern California, Chair of the Committee behind the National Academies of Sciences, Engineering and Medicine report. The CDC and the National Institutes of Health sponsored the report. A CDC spokesperson said Thursday that the agency would study the recommendations and that more money would be needed to implement them.<\/p>\n

Thirty-eight states and the District of Columbia allow the medical use of marijuana, with many of them also accommodating legal adult recreational use. Come this November, Florida will likely join the ranks on recreational adult use.<\/p>\n

And, while local and state governments benefit from sales taxes on cannabis, marijuana remains illegal under federal law.<\/p>\n

Twenty-five years ago, cannabis flower contained about 5% THC.<\/p>\n

\u201cNow you go into the stores, it\u2019s hard to find products that are less than 20% THC,\u201d said Beau Kilmer, co-director of the RAND Drug Policy Research Center and a report committee member.<\/p>\n

As reported on\u00a0pbs.org<\/a>, among the report\u2019s recommendations for the CDC:<\/p>\n

Develop and evaluate health campaigns about cannabis, specifically for parents, young people, pregnant women and people 65 and older.
\nMonitor cannabis cultivation, sales, use and health impacts.
\nCreate best practices for state regulation, including ways to limit youth access.<\/p>\n

For Congress:<\/p>\n

Close a loophole that allows intoxicating products derived from hemp to be widely sold, even in states where other cannabis products are illegal.
\nRemove restrictions on the Office of National Drug Control Policy that prevent it from studying the effects of cannabis legalization.<\/p>\n

For states:<\/p>\n

Require training and certification for cannabis retail staff.
\nAutomatically expunge or seal records for low-level cannabis-related offenses in states that have decriminalized cannabis.
\nAdopt and enforce quality standards set by the U.S. Pharmacopeia, an independent group that sets standards in medicines and dietary supplements.<\/p>\n

Hemp Sellers Fight Back<\/p>\n

September 2, 2024 \u2013 Licensed sellers of hemp have been treated arbitrarily, illegally, and according to a lawsuit filed by a group of hemp sellers from New York City to Saratoga Springs, with Gestapo-type tactics, including raids by heavily armed SWAT teams.<\/p>\n

The suit, filed last week in Albany County Supreme Court against the Cannabis Control Board, the Office of Cannabis Management, and the New York City Sheriff\u2019s Office seeks a temporary restraining order and a preliminary injunction stopping New York State officials from engaging in warrantless military style raids against lawful licensed hemp retailers selling legal hemp products.<\/p>\n

Plaintiffs also ask the court to rein in defendants and require them to cease applying MRTA regulations applicable to marijuana retailers during inspections of lawful licensed hemp retailers selling legal hemp products.<\/p>\n

They complain that OCM and inspectors are adjudicating the legality of hemp products based on packaging rather than testing the actual product. They challenge the seizure and retention of hemp products without meaningful hearings. And, they challenge the legality of the state\u2019s Revised Hemp Regulations because they are pre-empted by Federal Law. Plaintiffs say that federal law defines hemp, and that the state cannot impose additional or more stringent definitions than the federal rules allow.<\/p>\n

The complaint details the raids, arrests, seizures, and padlocking of licensed hemp sellers by overzealous state and municipal officials, including the closure of stores and signage effectively labeling the store as having sold illicit cannabis though the owners say they were selling legal hemp products, and the harm that the signage has done to their ongoing businesses.<\/p>\n

The complaint details the farcical nature of the hearings, the lack of review of product certifications, the refusal to test seized products, and the refusal to return seized products. Plaintiffs tell of officials efforts to frustrate the store owner\u2019s relationship with their landlords and efforts to seize of the retailer\u2019s financial accounts by labeling the lawful retailer a \u201ccriminal.\u201d<\/p>\n

<\/p>\n

Plaintiff\u2019s charge: \u201cRespondents\u2019 Gestapo-like conduct cannot continue unabated.\u00a0 Respondents must not be permitted to violate the constitutional rights of small business owners who invested time and money to obtain a license at great expense to sell a legal, licensed product.\u00a0 Without swift action by this Court, Respondents\u2019 unconstitutional actions will continue in violation of fundamental constitutional rights, and Petitioners and many other licensed hemp retailers will suffer irreparable harm.\u00a0 Judicial action is necessary to put an end to Respondents\u2019 unconstitutional enforcement scheme.\u201d<\/p>\n

<\/p>\n

On Friday, the Court ordered the OCM and other defendants\/respondents to appear in Court on September 13th\u00a0and defend their tactics, effectively requiring the state to \u201cshow cause\u201d why the hemp sellers should not get the relief they seek.<\/p>\n

These sort of heavy-handed tactics are not used against sellers of alcohol or tobacco who run afoul of the law. Everyone agrees that the closure of unlicensed cannabis sellers is a legitimate (and necessary) goal of the state, but the tactics employed seem to outweigh the necessity of the actions taken. Where constitutional rights are trampled to achieve an economic goal, court intervention is necessary.<\/p>\n

Read the Court Complaint<\/a><\/p>\n

Sales Tax Revenue Starts To Flow Back To Local Municipalities Where Cannabis Is Sold<\/p>\n

August 24, 2024 \u2013 For all of the excitement over gross revenue, the flow of tax dollars to municipalities has been \u2013 well \u2013 slow.<\/p>\n

The total amount distributed to counties and to New York City through July 31, 2024 is $13.7 million. Counties are required to share the bulk of the sales tax revenue with local towns and villages where the revenue is actually generated<\/p>\n

Of that $13.7 million paid to date, $4.5 million went to New York City (where 68 dispensaries operate legally); $5.9 million went to Upstate communities; and $3.2 million went to downstate communities, excluding New York City.<\/p>\n

Downstate includes Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, Sullivan, Ulster and Westchester. None of the towns\/villages in Nassau County opted in, so no tax revenue flows there. Putnam has no operating dispensaries.<\/p>\n

Upstate includes every other county north of the Downstate counties. New York City includes its five boroughs.
The map below shows tax distribution and the number of operational dispensaries in each county.<\/p>\n

<\/a>
So, where is the money?<\/p>\n

In the first quarter of 2024, about $100 million worth of cannabis was sold. In the second quarter of 2024, over $160 million worth of cannabis was sold, and according to OCM, the third quarter should surpass the second quarter.
OCM said for the second quarter of 2024, that\u2019s about $23 million in cannabis taxes.<\/p>\n

New York imposes a 13% sales tax to all cannabis products that are sold retail. 9% stays with the state. 4% goes to the municipalities where these transactions were done with the bulk of that money going to the town or village where the dispensaries are located.<\/p>\n

AUC retailers must file tax returns and remit payment of taxes due on a quarterly basis with the New York State Department of Taxation and Finance. The revenue associated with these payments will be distributed to local governments in January, April, July and October.<\/p>\n

So, again, where\u2019s the money?<\/p>\n

(Map: Office of State Comptroller)<\/p>\n

Anti-Cannabis Group Files Another Lawsuit Seeking To Undermine Cannabis Industry<\/p>\n

August 6, 2024 \u2013 The Cannabis Impact Prevention Coalition<\/a>\u00a0and the Cannabis Industry Victims Seeking Justice and filed suit in State Supreme Court in Albany County claiming that CCB, OCM, the Dormitory Authority, the Department of Taxation and Finance and others are using state money illegally in support of MRTA and MRTA\u2019s various programs supporting cannabis cultivation, distribution, distribution and other endeavors related to cannabis.<\/p>\n

Plaintiffs claim to represent the victims of cannabis as well as taxpaying citizens of the state who argue that using state funds in support of the cannabis industry is contrary to both state and federal law.<\/p>\n

The arguments raised focus around the state\u2019s NYS Cannabis Revenue Fund, a vehicle for collection and disbursement of taxes and fees raised from the cannabis industry. In a nutshell, plaintiffs argue that New York State and all of the entities established by it that are involved in cannabis are violating the Controlled Substances Act in numerous ways.<\/p>\n

Derivatively, they also argue that those same expenditures violate New York State law. Plaintiffs as citizen-taxpayers charge that can maintain an action for declaratory relief against state authorities who have \u201ccaused, is now causing, or is about to cause a wrongful expenditure, misappropriation, misapplication, or any other illegal or unconstitutional disbursement of state funds.\u201d<\/p>\n

For relief, they seek a temporary and permanent injunction against state authorities prohibiting them from using state funds in furtherance of cannabis, as well as declaratory relief that MRTA violates both state and federal law.<\/p>\n

This is not the first attempt by these plaintiffs to derail New York\u2019s cannabis industry.\u00a0 Last year, the group filed a federal lawsuit against New York and the state Office of Cannabis Management, alleging that the State\u2019s Social Equity Fund was illegal.<\/p>\n

Before that, the coalition filed suit to overturn MRTA alleging that the underlying claims supporting passage of MRTA and about cannabis were fraudulent.<\/p>\n

According to its website, the Cannabis Impact Prevention Coalition is a grassroots coalition made up of concerned citizens, parents, healthcare professionals, educators, treatment providers, law enforcement, and other professionals \u00a0whose mission is to prevent the social, health, public safety and environmental impacts of marijuana\/cannabis.<\/p>\n

\"Home<\/a><\/p>\n

Proximity Protection Upheld By Albany County Supreme Court<\/p>\n

August 4, 2024 \u2013 Update on the proximity protection litigation pending in the Supreme Court, Albany County. Readers will recall that Gracious Greens, LLC (GG) filed suit challenging the cannabis regulations both on their face and as applied in denying GG its preferred locations in New Paltz and Peekskill, where Valley Greens and Big Gas Dispensary already enjoyed proximity protection for their nearby locations.<\/p>\n

To undermine that protection, GG argued: (1) that municipalities should decide cannabis dispensary locations, not OCM; (2) that taking away municipal discretion violated New York\u2019s Home Rule law, which generally allows local governments to make decisions affecting their zoning and related land-use issues; and (3) that the proximity protection regulations were\u00a0too vague to pass constitutional muster, both as written and as applied.<\/p>\n

In a well-reasoned opinion, the Court rejected those claims and denied GG the temporary relief it sought.<\/p>\n

The Court addressed the merits of GG\u2019s claims and rejected its interpretation that the final say-so of location approval rests with the municipal government, as the legal framework clearly gives the CCB the last word on licensing a dispensary at a particular location.<\/p>\n

On the Home Rule argument, the Court found the rules promulgated by CCB were applicable statewide and did not infringe on a local jurisdiction\u2019s home rule. It found the statutory scheme to be of general application, effectively trumping (so to speak) any effort by a municipality to make a decision inconsistent with the statewide law.<\/p>\n

And, of the vagueness claims (constitutional due process claims) the Court effectively found the law passed constitutional muster. It found the laws neither vague nor applied arbitrarily or in a discriminatory manner.\u00a0 The Court found the proximity protection provision\u00a0clear on its face. The Court considered plaintiff\u2019s argument that not knowing what areas were protected at the time it applied to secure their preferred\u00a0locations, it could not know that its chosen locations were ineligible for licensure, and kind of skirted the argument, saying that nothing in the regulations prevented GG from applying for a license at a location that was already protected.<\/p>\n

In a lengthy discussion, the Court also rejected the possibility that GG would succeed on the merits of its claims and denied it the injunctive relief it was seeking. What comes next is a bit unclear. The case proceeds for now \u2013 but the judge has made his views on the merits pretty clear.<\/p>\n

Read the Court\u2019s Order here.<\/a><\/p>\n

Governor Hochul Has Bills Sitting On Her Desk That Could Help Stabilize New York\u2019s Cannabis Industry<\/p>\n

August 4, 2024 \u2013 Bills sitting on Governor Kathy Hochul\u2019s desk could improve the economic prospects of participants in New York\u2019s cannabis industry.<\/p>\n

Several bills made it past both the Assembly and Senate and await signature, veto or lapse at year-end.<\/p>\n

While cannabis suppliers won a victory when the State replaced the potency tax with a flat tax, and the change from quarterly to annual tax payments helped, there are other measures that growers and processors say are important and necessary.<\/p>\n

The Cannabis Association of New York released data last week detailing its concerns over possible supply shortages, particularly as new dispensaries open their doors. The issue is: can supply keep up?<\/p>\n

78% of dispensary owners and 66% of processors say cultivators and suppliers plan to ship less cannabis product. 53% of cultivators say they cannot meet order requests. And, about 27% of that group claims they often fail to fill orders.<\/p>\n

In contrast dispensary sales are on the rise, with an average 17% month-over-month growth rate, according to the Office of Cannabis Management.<\/p>\n

So, what are stakeholders looking for?<\/p>\n

One, they want Hochul to sign a measure into law that would define cannabis as an agricultural crop under state law, removing the stigma of growing cannabis and opening new options for growers with municipalities and AgMarkets.<\/p>\n

Long on the table is another bill that would make Cannabis Grower Showcases (CGS) permanent. Legislation would allow farmers to partner with dispensary owners, as they did in the past, to sell their products at approved events like markets, festivals and fairs, provided the municipality that the events were in had opted into cannabis retail sales. The pending bill would make the CGS program permanent and allow dispensary owner and growers to hold approved events for up to two weeks at a time.<\/p>\n

The success of the CGS helped launch New York\u2019s market, providing access to buyers when there were few dispensaries open for retail business. It also helped growers unload unsold product when the market could not yet absorb all of the grown cannabis.<\/p>\n

Advertising Rules Relaxed For Retail Cannabis Shops<\/p>\n

July 14, 2024 \u2013 New York\u2019s restrictive rules governing advertising by licensed cannabis retailers have been relaxed by regulators who approved changes that will permit retailers to tout their locations on billboards and other external signage.<\/p>\n

Proposed revisions also would also allow some marketing by company mascots, provided the dispensaries are not appealing to underage (under 21) customer. Also permitted will be a broader spectrum of colors on signage, and the introduction of promotional items such as sandwich boards, tee-shirts and handbills, within limits.<\/p>\n

Retailers shared their disappointment that the rules prohibiting neon lighting, and the requirement that windows be tinted to prevent interior viewing from the outside, were not modified. Darkened windows leave dispensary staff vulnerable to robberies, and give the appearance that the legal sale of cannabis is still something to be hidden behind darkened windows. There are no similar rules for alcohol sales.<\/p>\n

Retailers hoped that relaxing the rules would help level the playing field, not only with illegal sellers in New York, but against out-of-state sellers that advertise in New York.<\/p>\n

The revisions still prevent images of cannabis, edibles and other products on billboard advertising. The changes, subject to a 45-day comment period, still restrict the content that can be shown. The new rules limit content to a retailer\u2019s logo, name, and location address.<\/p>\n

\u201cNew York\u2019s packaging, labeling, and marketing regulations for cannabis are some of the most restrictive in the nation, making them incredibly challenging for brands, and we\u2019re thankful the CCB acted (this week) to make at least some changes that will help brands in our state better compete,\u201d said Mack Hueber, president of the Empire Cannabis Manufacturers Alliance, as reported in the Albany Times Union.<\/p>\n

But he added that \u201cfar more work needs to be done to improve these regulations and boost our industry and, ultimately, the state should align its rules for marketing cannabis products with those that allow for creativity in the alcohol industry, while still protecting against advertising to youth.\u201d<\/p>\n

The rules, retailers hope, will soon mirror those for the sale of alcohol and tobacco, which allow generous advertising of their product in public view. Beer, wine, and liquor advertisements are viewable on network and cable television, without any restriction on age, and are prolific on sporting events which attract a diverse age audience.<\/p>\n

The new regulations also allow retailers to offer loyalty rewards programs and discounted products.
These new regulations may level the playing field for licensed, tax-paying sellers who have to compete against illegal sellers that flout regulations, advertise widely, and sell to underage customers.<\/p>\n

IN BRIEF:<\/p>\n

July 14, 2024 \u2013 A new analysis of violence between intimate partners concludes that legalizing marijuana for adult use \u201cresults in a substantial decrease in rates of intimate partner violence.\u201d<\/p>\n

The finding also indicate that recreational cannabis legalization \u201csubstantially impacts the relationship between heavy drinking\u201d and intimate partner violence (IPV), possibly as the result of people substituting marijuana for alcohol.<\/p>\n

Author Samantha Gene Baldwin, a Georgetown master of public policy student, wrote in the thesis that the findings are \u201csurprising,\u201d saying the links between recreational marijuana legalization (RML) and IPV \u201crequire careful consideration.\u201d<\/p>\n

Read the full story (Legalizing Marijuana Leads To \u2018Substantial Decrease\u2019 In Intimate Partner Violence, Study Shows)\u00a0here<\/a>:<\/p>\n

Another Lawsuit Challenging Cannabis Board\u2019s Social Equity Program<\/p>\n

May 19, 2024 \u2013 Yet another lawsuit has been filed in State Supreme Court in Albany claims CCB acted arbitrarily, capriciously and illegally. The suit argues that the CAURD program is an \u201carbitrary and capricious\u201d application of state law and that \u201cand any and all licenses improperly granted pursuant to this program are invalid.\u201d<\/p>\n

The suit once again raises challenges to New York\u2019s controversial Conditional Adult-Use Retail Dispensary (CAURD) program, which prioritized \u201cjustice-impacted\u201d individuals who could demonstrate harm caused by the war on drugs.<\/p>\n

In a lawsuit filed May 9 in state Supreme Court in Albany County against New York\u2019s Cannabis Control Board and Office of Cannabis Management, four plaintiffs \u2013 Organic Blooms, Niagara Nugget, Blackmark and Windward Management \u2013 point out that CAURD applicants were able to file an initial request for a state license without securing real estate and alerting the local municipality.<\/p>\n

The suit charges that those privileges were not extended to anyone who applied for a general license rather than a social equity permit during an October-December application window..<\/p>\n

Plaintiffs filed their adult-use applications during the October-December application period and are still waiting to receive a decision from the state on their pending applications.<\/p>\n

The lawsuit seeks declaratory relief and asks the court to invalidate the CAURD licenses issued to date, equating with the revocation of roughly 460 CAURD permits, including most of the 127 adult-use stores licensed to date.<\/p>\n

Nearly all of the retail stores open in New York are CAURD licensees.<\/p>\n

A copy of the lawsuit is available\u00a0here<\/a>.<\/p>\n

Rescheduling Marijuana To Schedule III, What Does It Mean?<\/p>\n

May 5, 2024 \u2013 According to the Associated Press, the Drug Enforcement Administration (DEA) has concurred with decisions made by the US Department of Health and Human Services (USHHS), advancing the move of marijuana from Schedule I to Schedule III under the Controlled Substances Act (CSA).<\/p>\n

Cannabis was first listed more than 50 years ago as a strictly prohibited drug, on par with heroin and LSD and defined as a substance with no known medical value and a significant abuse potential. Previous efforts to reschedule cannabis during the Obama administration were rejected.<\/p>\n

USHHS determined that cannabis \u201chas a currently accepted medical use in treatment in the United States\u201d and has a \u201cpotential for abuse less than the drugs or other substances in Schedules I and II.\u201d
The move to Schedule III will have a major impact on state-legal cannabis businesses, and not all of them good.<\/p>\n

One positive business impact \u2014 marijuana firms can officially take federal tax deductions that they\u2019ve been barred from under an Internal Revenue Service (IRS) code known as 280E.<\/p>\n

One not so good. Marijuana would remain regulated by the DEA. That means, absent a legislative exemption, the roughly 15,000 cannabis dispensaries in the U.S. would have to register with the DEA like regular pharmacies and fulfill strict reporting requirements, something that they are loath to do and that the DEA is ill equipped to handle.<\/p>\n

On the plus side, the proposed rescheduling would allow more research on cannabis. Research on cannabis as a Schedule I drugs extremely difficult and limited.<\/p>\n

The move to Schedule I would not legalize marijuana at the federal level. Schedule III drugs are still controlled substances and subject to rules and regulations, and people who traffic in them without permission could still face federal criminal prosecution.<\/p>\n

The rescheduling does not directly address another important issue to cannabis businesses \u2013 banking restrictions. There is legislation pending that would address banking as well as effort to de-schedule cannabis, which would remove it from the Controlled Substances Act.<\/p>\n

\u201cWhile this rescheduling announcement is a historic step forward, I remain strongly committed to continuing to work on legislation like the SAFER Banking Act as well as the Cannabis Administration and Opportunity Act, which federally de-schedules cannabis by removing it from the Controlled Substances Act,\u201d Senate Majority Leader Sen. Chuck Schumer of New York said in a statement. \u201cCongress must do everything we can to end the federal prohibition on cannabis and address longstanding harms caused by the War on Drugs.\u201d<\/p>\n

The next step in the rescheduling process is for the White House Office of Management and Budget (OMB), to review the rule. If approved, it would go to public comment before potentially being finalized.<\/p>\n

New Litigation Filed Challenging License Issuance Under OCM\u2019s Queue System<\/p>\n

May 5, 2024 \u2013 A Hudson Valley applicant seeking a marijuana cultivation and processor license is suing regulators in the latest legal challenge to alleged \u201cpriority\u201d status in the state.<\/p>\n

Tree Hill Innovations, operated by its majority owner, Marguerite Mikol of Saugerties, filed a petition claiming certain applicants were given \u201cextra priority\u201d by submitting up to three applications in a lottery designed to vet requests, according to a story in the Albany Times Union.<\/p>\n

The lawsuit against the state\u2019s Cannabis Control Board and Office of Cannabis Management alleges regulators changed licensing application rules last year in an \u201carbitrary and capricious\u201d manner without informing the public.<\/p>\n

According to the suit, Mikol has invested more than $700,000 to establish operations, including the purchase of 67 acres in Ulster County.<\/p>\n

\u201cThis is my livelihood that has been trampled and I would like to see correct policy implemented as it relates to the legislation and have my application reviewed under the current terms with approved time to correct or challenge any and all deficiencies,\u201d Mikol wrote in court papers.<\/p>\n

Mikol takes issue with allowing up to three duplicate applications to be submitted and says the change was made \u201cwithout disclosing it to the public prior to the (second) application period \u2026 and suggests that it was established and implemented in an arbitrary and capricious manner.\u201d<\/p>\n

She also alleges that some applicants may have submitted more than three applications in the Office of Cannabis Management\u2019s online queue to try and improve their chances of having one reviewed.<\/p>\n

Mikol asks the Court to annul the queue system for license applications as arbitrary, capricious and without a rational basis in law. She says that they are outside the scope of OCM\u2019s regulatory authority and in excess of its jurisdiction.<\/p>\n

She also asks the Court to require transparency and reveal to the public the exact policies and procedures utilized in the creation and selections made from the queue. She asks for the existing queue to be vacated and for adherence to the law in any future queue system.<\/p>\n

The Court has ordered OCM to \u201cshow cause\u201d on June 7th\u00a0in Albany why it should not grant the relief requested. The case has been assigned to Justice Justin Corcoran.<\/p>\n

New York has been besieged by cannabis-related lawsuits regarding a variety of claims challenging: social equity licensing; residency requirements; a ban on third-party advertising for cannabis retailers; exclusion of multi-state operators; reverse discrimination of priorities and fees; and new rules governing hemp-derived cannabinoids.<\/p>\n

Some of the litigation has stalled the rollout of the state\u2019s cannabis program which Governor Kathy Hochul described as a \u201cdisaster.\u201d<\/p>\n

New York 2025 Budget Screws Growers, Replaces Potency Tax, Bolsters Local Law Enforcement, Eliminates State Share of Medical Excise Tax<\/p>\n

April 21, 2024 \u2013 Maybe it\u2019s just a disconnect.\u00a0New York State Senator Jeremy Cooney is touting the accomplishments in the just-passed New York State Budget, what he calls Padlocks, Potency & Prescriptions, while ignoring the stab-in-the-back cultivators suffered when a proposed fund in the budget to help distressed cannabis farmers was removed from the state\u2019s $237 billion spending plan during negotiations.<\/p>\n

Cannabis farmers were expecting some relief in the budget. The proposed Senate version included provisions for cannabis farmers to access $60 million in loans, $40 million in grants, and $28 million in tax credits. Farmers would have accepted less and looked to the dairy bailouts from years past when the State recognized the importance of sustaining a failing agricultural market. They got nothing.<\/p>\n

Cultivators are less than pleased. Joseph Calderone from the Cannabis Farmers Alliance said growers felt abandoned by the governor, that farmers are underwater and may be reconsidering planting this year, with some farmers looking to broker their licenses rather than lose more money.<\/p>\n

Cannabis Farmers Alliance acting President Joseph Calderone said many cannabis farmers in the state are facing financial ruin. The CFA recently polled the state\u2019s 289 licensed cannabis cultivators, and 97% of those who responded said they\u2019re operating at a loss.<\/p>\n

\u201cThe burden rate for our farmers is $300,000 a year,\u201d Calderone said. \u201cIt\u2019s really difficult to make business decisions.\u201d<\/p>\n

\"\"<\/a><\/p>\n

Meanwhile, there is some celebration with added enforcement at the local level, the replacement of the potency tax with a flat wholesale tax of 9%, and the elimination of the State\u2019s share of the medical excise tax, keeping in place only the local tax share.<\/p>\n

Municipalities will now be able to set their own local enforcement rules to padlock illicit shops and collect civil fines from the illegal businesses they shut down, creating some incentive for local governments to act.<\/p>\n

The newest provision in the FY2025 budget addresses landlords. Landlords who turn a blind eye to the illegal activity and fail to bring forth eviction proceedings against tenants in violation of the cannabis law will be held to strict penalties including: a $50,000 fine for any landlord notified of the violation within New York City; or five times the rent from the time the landlord was notified of the violation outside of New York City.<\/p>\n

The FY25 Budget also lowers the standard of proof required to evict a tenant in violation of cannabis law. Landlords will now only have to prove that a business is \u201ccustomarily or habitually\u201d engaged in selling cannabis without a license, rather than \u201csolely or primarily\u201d doing so.<\/p>\n

The changes in the burden of proof are intended to eliminate a defense illegal sellers utilized to avoid closure and eviction \u2013 making it easier for landlords to remove unlicensed operators.<\/p>\n

Court Tosses Regulations Banning Third-Party Platform Participation<\/p>\n

April 7, 2024 \u2013 State Supreme Court Justice Kevin Bryant took no prisoners (pulled no punches) in his opinion last week on Leafly Holdings v. New York State OCM<\/a>. In laymen\u2019s terms, he basically said that OCM more or less \u201cmade up\u201d regulations barring third party marketing firms from participating in New Yok\u2019s legal cannabis market.<\/p>\n

What third party marketers or platforms (TTPs) do is basically provide a sort of one-stop shop for cannabis information \u2013 who is selling legally, where they are located, what they are offering, what prices they are asking, how to order, etc. TTPs do not sell, fill orders, or deliver cannabis. They basically provide a marketing and educational vehicle for consumers. They create a check-and-balance on pricing by retailers by publishing competitive information, and allow retailers to market their products on the TTP\u2019s database and mapping programs.<\/p>\n

For reasons that were never articulated, or that were justified only after-the-fact, OCM\u2019s regulations banned TTPs in New York. When regulations were first promulgated, Leafly, along with other TTPs, sought to participate in the drafting of the regulations, and for whatever reasons OCM had, it didn\u2019t accept (probably didn\u2019t even read) their input, or the input of similar entities. When the regulations were passed, Leafly had no option but to go to court this past September as it was effectively closed out of the nascent cannabis market in New York.<\/p>\n

If claimed that the regulations were arbitrary, capricious, lacked a rational basis, were anti-competitive, violated the New York state constitution, and the US Constitution, largely because they sought to exclude TTPs based on the content of material that it sought to offer consumers. It said OCM wanted to competitive information away from consumers and keep consumers in the dark (and keep prices high) on product pricing from competing dispensaries.<\/p>\n

OCM agreed in a temporary arrangement to allow Leafly to service New York while the litigation was pending, and then fought vociferously to have its regulations upheld and ultimately push Leafly out.<\/p>\n

While the litigation was pending, Leafly, a publicly traded company, saw its stock price fall by one-half, presumably based on the possibility that it would be permanently barred from one of the potentially largest cannabis markets in the country.<\/p>\n

Justice Bryant saw the regulations for what they were, and in a 13-page opinion struck the Third-Party Marketing Ban, the Pricing Ban, the Third-Party Order Ban, the Third-Party All License Listing Mandate, and the Third-Party Distributor Listing Mandate. He rejected the arguments made by OCM and detailed a complete lack of transparency, support, expertise, and process in the passage of the regulations.<\/p>\n

He said that there was a \u201ccomplete lack of justification for the action in the record\u201d and that the \u201cregulations constituted impermissible restrictions\u201d on Leafly\u2019s right to free speech and that they were also unconstitutionally vague.<\/p>\n

Lawsuit Challenges Regulations On Proximity Protection<\/p>\n

April 7, 2024 \u2013 Perhaps OCM needs to hire some additional lawyers.<\/p>\n

Last week, a suit was filed in Albany Supreme Court against New York\u2019s cannabis regulators that claims applicants were irreparably harmed because they had to secure retail locations outside of other retailers protected proximities without knowing where those protected areas were located.<\/p>\n

The case filed by the law firm of Prince Lobel Tye for its client Gracious Greens, a service-disabled veteran and minority owned SEE candidate, says that its client secured municipal approvals for two locations in Peekskill and New Paltz only to discover that those locations already fell within proximity protection for other licensees.<\/p>\n

An attorney from Prince Lobel told that New York Law Journal: \u201cFinding an invisible competitor, not knowing where they are located, and being told, \u2018Too bad, you should\u2019ve known\u2019 is incomprehensible.\u201d<\/p>\n

The complaint says the proximity regulation is void for vagueness, fails to provide a person with ordinary intelligence with a reasonable opportunity to know what is prohibited, and is written in a manner that encourages arbitrary or discriminatory enforcement.\u201d<\/p>\n

The action also takes issue with regulators usurping local municipal planning and zoning by reserving the final say on location with OCM.<\/p>\n

As written, the regulations forbid dispensaries from locating within a 1,000 foot radius of another dispensary in municipalities with populations of 20,000 people or more, and a 2,000 foot radius where populations number less than 20,000 people.<\/p>\n

The suit basically asks to do away with proximity protection in the earlier application window because applicants were told to secure locations without knowing if they would be acceptable to OCM\u2019s grant of proximity protection to other retailers.<\/p>\n

Last month, OCM put out an\u00a0interactive map<\/a>\u00a0designating current and pending storefronts.<\/p>\n

Cannabis Farmers Relief Fund Proposed For New York Budget<\/p>\n

March 20, 2024 \u2013 If the New York State Senate has its way with this year\u2019s budget, cannabis farmers can expect some relief. The proposed Senate budget include provisions for cannabis farmers to access $60 million in load, $40 million in grants, and $28 million in tax credits.<\/p>\n

Last year, Governor Hochul vetoed legislation that would have allowed cannabis farmers and cultivators to offload tested, packaged, and sealed cannabis products and cannabis to a cannabis dispensing facilities licensed by a tribal nation for retail. The legislation would have created a new avenue for sales for cannabis farmers.<\/p>\n

The Cannabis Farmers Relief Fund will require proof of financial hardship before licensed cultivators and processors could access benefits.<\/p>\n

Potency Tax Repeal Considered<\/p>\n

March 20, 2024 \u2013 The Senate budget proposal also repeals the potency tax and replaces it with a wholesale flat tax that would start at 5% come June 1, 2024, but comes with a catch. The flat tax would increase to 7% in 2028 and then up to 9% in 2031. Governor Hochel proposed a 9% flat tax. The Senate version gives a few years of relief before each boost in the tax.<\/p>\n

Also considered is a repeal of the medical cannabis excise tax. New York State currently has one of the highest tax rates on medical cannabis in the nation. Bordering states, including Connecticut, Massachusetts, New Jersey, Rhode Island, and Vermont have no excise tax on medical cannabis products whatsoever.<\/p>\n

COD List? What\u2019s That About?<\/p>\n

In New York State, licensed retailers who purchase cannabis products from licensed suppliers are required to pay in full for the purchase no later than 30 days from the date of delivery. Suppliers are required to report to the Office of Cannabis Management any retail licensee who, after 30 days from delivery date, still has an outstanding balance due for a credit purchase.<\/p>\n

Suppliers are also required to send a \u201cNotice of Default\u201d and upload a copy to OCM when reporting delinquent payments. When payment is received in full from the retailer, suppliers must send a notice to OCM of receipt of payment to remove the retailer from the COD (Cash On Delivery) list.<\/p>\n

The list is not public, and OCM does not act as a collection agency for past due receivables. OCM simply determines the validity of the report before placing a retailer on the COD list. Retailers remain on the list until past due invoices are cleared.<\/p>\n

If a retailer appears on the list, no supplier can sell cannabis products to it on credit. Suppliers are required to check the COD list before extending credit. Licensed retailers can request information about the C.O.D. list by emailing\u00a0CODReporting@ocm.ny.gov<\/a>.\u00a0The Office will provide the retailer with information specific to your business only. If on the C.O.D. list, OCM will provide the name of the supplier(s) who reported you as delinquent and how much they claim you owe them.<\/p>\n

Powerhouse Pacific Legal Foundation Joins The Fray Challenging New York\u2019s SEE Licensing Preferences<\/p>\n

March 11, 2024 \u2013 January\u2019s lawsuit by Jamesville, New York\u2019s Valencia, AG LLC was largely minimized (and sometimes laughed at) by New York\u2019s Cannabis Bar \u2013 the commentaries of experts who predict the outcomes of every lawsuit, even though most have been resolved by settlement and not litigation.<\/p>\n

Valencia\u2019s lawsuit, filed in the United States District Court for the Northern District of New York challenged the advantages given to women and minority applicants in retail licensing by the Office of Cannabis Management. According to the lawsuit, the plaintiff was owned by \u201cmales of light pigmentation who might best be described as Caucasian or white men.\u201d Valencia filed an application with OCM on October 12, 2023 seeking a microbusiness cannabis license. Not falling into any of the categories for SEE status, Valencia was unable to request any sort of priority status in its application.<\/p>\n

In OCM\u2019s randomized hierarchy for reviewing applications, Valencia ranked 2,042 out of what was supposed to be 2,200 \u201coperationally-ready\u201d applicants and knew he had no chance of having his application reviewed or receiving a coveted license.<\/p>\n

The complaint alleged that the preference or priority given to women and minorities, over white men, violates the Equal Protection Clause of the United States Constitution. Plaintiff also charges that the higher application fees paid by white men over women and minorities also violates the US Constitution.<\/p>\n

For relief, Plaintiff asks for: (1) a preliminary and permanent injunction against the preferences given women and minorities; (2) a prohibition against OCM from processing any applications for cannabis licenses where those applications claim SEE status based on women or minority ownership; (3) the revocation and cancellation of licenses granted to SEE status licensees when based on women or minority ownership; (4) a refund of the higher application fees paid by applicants unable to claim SEE status based on women or minority ownership; and (5) a prohibition against the differing fee schedules based SEE status.<\/p>\n

Valencia\u2019s request for a temporary restraining order was denied when the District Court found that the plaintiff had not demonstrated that it would suffer irreparable harm waiting for a full hearing on a preliminary injunction. That ruling was sound.<\/p>\n

With the hearing originally set for Thursday, March 14th, OCM filed its affirmations, hundreds of pages of exhibits and memoranda of law in opposition to the request for a temporary injunction. It referred to the harm to applicants, farmers, processors, the market in general, and how an injunction would bolster the illicit market.<\/p>\n

Then, a funny thing happened on the way to the courthouse.<\/p>\n

On February 29, 2024, Valencia\u2019s local counsel got some help. Two attorneys from the\u00a0Pacific Legal Foundation<\/a>\u00a0(PLF) entered appearances as co-counsel on plaintiff\u2019s behalf. On Friday, the team from PLF asked to have the Motion For A Temporary Injunction taken off the Court calendar.<\/p>\n

For those unfamiliar with the Pacific Legal Foundation (PLF), it is generally known as a powerhouse litigation group supporting libertarian and conservative causes. As of 2022, PLF has litigated 19 cases before the United States Supreme Court, won 17, and lost 2.<\/p>\n

Its practice has been focused lately on challenging race-based preferences. It filed a lawsuit last month challenged Alabama\u2019s racial quota on the Real Estate Appraisers Board where the State off Alabama sets aside two seats on its Real Estate Appraisers Board for racial minorities. It has filed lawsuits around the country challenging diversity set-asides and quotas.<\/p>\n

In New York City, PLF is fighting policies that adversely impact Asian high-school students in admission to preferred schools because of social equity set-asides.<\/p>\n

It fights race-based quotas and challenges laws giving preferential treatment to minorities. In fact, the Foundation is known for challenging minority set-asides and quotas that adversely impact non-minorities or that set up systems for racial quotas.<\/p>\n

While PLF has not disclosed its strategy going forward in the Valencia case, it is fairly certain that it will mount a vigorous legal challenge to New York\u2019s SEE policies in granting cannabis licensing preferences.<\/p>\n

This is now the case to watch.<\/p>\n

Potency Tax Repeal?<\/p>\n

March 11, 2024 \u2013 New York\u2019s controversial \u201cpotency tax\u201d on cannabis products is likely to be repealed in the state budget as Gov. Kathy Hochul and the state legislature figure out how to best replace it with a flat excise tax.<\/p>\n

According to the Albany Times Union, sources in the Senate and Assembly said their \u201cone-house\u201d budgets, due next week, both have policy language to repeal the potency tax, which industry stakeholders have said is also damaging legal retail sales and has driven more consumers to buy cannabis from unlicensed vendors who are not collecting or paying taxes.<\/p>\n

Governor Hochul\u2019s proposal would replace the potency tax with a wholesale excise tax of 9 percent, which would be in addition to the state and local retail sales taxes of 9 and 4 percent, respectively.<\/p>\n

A Senate proposal would repeal the potency tax and replace it with a flat-rate 7 percent tax, which is similar to how alcohol products that vary in potency are taxed.<\/p>\n

Whatever the ultimate tax rate, it seems that the potency tax is on the way out.<\/p>\n

Will (And When Will) Cannabis Events Take The Place Of Growers\u2019 Showcases?<\/p>\n

March 11, 2024 \u2013 We may have to wait some time for the release of regulations governing the reincarnation of Growers\u2019 Showcases as Special Events, but word is that rules are being considered for publication, public comment, and adoption some time in the next few months. Regulators are not known for swift work on regulations.<\/p>\n

Growers\u2019 Showcases were instrumental in relieving the backlog of product in cultivators\u2019 inventories late last year when there were only a handful of open licensed dispensaries and dozens of showcases operating.<\/p>\n

Now, with 78 dispensaries open, and more set to open soon, there is less pressure to pass regulations allowing cannabis events. What these Special Events will look like is anyone\u2019s guess right now, but any opportunity for increased sales will presumably be welcome especially in those areas of the state with minimal retail options.<\/p>\n

Opportunity Knocks! Community Reinvestment Grant Funding<\/p>\n

March 4, 2024 \u2013 Last week, we explained\u00a0that after the costs of\u00a0administering MRTA, and costs related to training, and implementing incubators and workforce development for social and economic equity applicants, 40% of the tax revenue is dedicated to Community Grants Reinvestment Fund (CGR Funds).<\/p>\n

The funds go to qualified community-based non-profit organizations and local governments to support several different community revitalization efforts, including, employment, adult education, mental health treatment, housing, financial literacy, and a litany of other programs assisting adults and children.<\/p>\n

Last week, the Cannabis Advisory Board (CAB) convened its first meeting of 2024 to discuss the Community Grants Reinvestment Fund (CGR Fund).<\/p>\n

The CAB is a multidisciplinary group of experts, comprised of 13 voting members appointed by the Governor, New York State Senate, and Assembly, and supported by a range of context experts from various agencies from across New York State.<\/p>\n

The CAB is also tasked with governing and administering the CGR Fund which reinvests tax revenue from cannabis sales to those communities disproportionately affected by past cannabis prohibition policies.<\/p>\n

The money in the CGR Fund will be administered and disbursed by the Office of Cannabis Management to provide grants for qualified community-based nonprofit organizations and approved local government entities to reinvest in communities disproportionately affected by past federal and state drug policies.<\/p>\n

With New York topping $180 million in total cannabis sales in 2023, the CAB will soon be able to begin issuing these grants from the CGR Fund to community-based nonprofits and local governments. The Community Grants Reinvestment Subcommittee meeting furthered the discussion of how the CAB will decide who to issue these grants to.<\/p>\n

Building on this momentum, the CAB has proposed a tentative timeline to establish goals for the implementation and distribution of the first funds in the CGR Fund:<\/p>\n

Mid-April:\u00a0Public announcement of the CGR Fund opportunity and anticipated release date for the Request for Applications (RFA). Those interested in learning more about this opportunity shall register with the New York State Contract Reporter (https:\/\/www.nyscr.ny.gov\/<\/a>) to receive updated notifications on available opportunities. Nonprofit organizations must also be prequalified to receive awards and may visit\u00a0https:\/\/grantsmanagement.ny.gov\/get-prequalified<\/a>\u00a0to learn more about registering early.
\nEarly June:\u00a0Goal to release the RFA, allowing applicants to start the application process.
\nOctober 1st:\u00a0Projected deadline for applicants to submit their applications.
\nNovember\/December:\u00a0Anticipated Announcement of the awardees, culminating the selection process for community-based nonprofits and local governments.<\/p>\n

Critics of this schedule have asked the same questions you are probably asking: Several years into cannabis sales and no grants have yet been awarded? And, the second question: Why no awards until November\/December? Should it really take the better part of a year to get this program going? It looks like tax revenue collected from 2023\u2019s sales won\u2019t reach community-based organizations until early 2025 \u2014 at best.<\/p>\n

New York awards 110 more adult-use marijuana business licenses<\/p>\n

February 18, 2024 \u2013 It\u2019s the event that we\u2019ve all been waiting for: the first round of issuance of new licenses from the application window opened last year. At its last meeting, the Cannabis Control Board, voted to issue twenty-four cultivator licenses, nine distributor licenses, twenty-six microbusiness licenses, twenty-five non-provisional adult use retail licenses, and 13 provisional retail licenses.<\/p>\n

The approvals mark the first round of non-conditional licenses issued by the state.<\/p>\n

On Friday, the governor celebrated the board\u2019s issuance of non-conditional licenses.<\/p>\n

\u201cAdult-use cannabis is a growing industry in New York that will help local economies across the state,\u201d she said. \u201cThe approval of over 100 licenses is a good start and provides individuals with the opportunity to apply for licensing to help drive up local economies around them.\u201d<\/p>\n

[Congratulations to all of the successful applicants and awardees, and a shout-out to Rockland County-based Highland Gallery, LLC, a soon-to-be-open retailer in the Village of Piermont.]<\/p>\n

Keep in mind that it may still take some time for some of the licensees to open their doors as there are likely still local municipal rules and inspections that need to be completed, depending on their jurisdictions.<\/p>\n

For a complete list of licensees,\u00a0click here<\/a>.<\/p>\n

2100 applications were received in the last round for what has been announced to be 250 licenses.<\/p>\n

Some good news:\u00a0New York retailers have recorded at least $174 million in legal cannabis sales, according to OCM figures released Friday.<\/p>\n

New York Regulators Approve Marijuana Home Grown Rules<\/p>\n

February 18, 2024 \u2013 Rolled over from the canceled meeting last month was consideration of rules allowing the home cultivation of recreational marijuana. At last week\u2019s meeting, proposed rules were approved, but the approved resolution also starts a 60-day public comment period before the rules are finalized.<\/p>\n

The regulations would allow anyone 21 or older to grow up to six plants for personal use, only three of which could be mature at one time. A residence with multiple adults could have a maximum of 12 plants, and people could possess up to five pounds of marijuana derived from the plants.<\/p>\n

The six allowed for individuals include three mature and three immature plants. An immature plant is one that does not have visible flowers or buds.<\/p>\n

For those who transform the flower to a concentrate, the limit on how much of that substance they can possess will be the equivalent of what the product would represent in weight from cultivated cannabis.<\/p>\n

The rules also include a provision allowing licensed retailers to sell starter plants. The proposal was designed to give licensed retailers another vehicle to generate revenue. Retailers intending to sell starter plants will be required to have an active nursery dealer registration certificate from the New York State Department of Agriculture and Markets. Plants must be labeled with information that includes the strain, expected date of harvest and a warning to keep it out of the reach of children.<\/p>\n

Cannabis officials on Friday said that their research indicates the ability of New York residents to grow their own marijuana should have a minimal impact on the licensed retail industry.<\/p>\n

Marijuana seeds have been legally sold in the U.S. since 2018 under the federal Agriculture Improvement Act. The state Office of Cannabis Management does not regulate the sale of seeds and anyone 21 or older can purchase them online or at cannabis retail shops.<\/p>\n

Landlords May Face Civil Forfeiture Of Real Property For Allowing Illicit Retail Operators<\/p>\n

February 18,2024 \u2013 Readers of this newsletter know that we\u2019ve been advocating for an amendment to the MRTA that would allow \u201cin rem\u201d actions against real property that is knowingly used to house illicit cannabis retail sales. The idea is that if a property owner or landlord knew or should have known that its tenant was operating an illicit retail outlet, the real property could be subject to civil forfeiture.<\/p>\n

Last week, an\u00a0Assembly bill\u00a0<\/a>was sent to the Economic Development Committee for review. The bill is titled, \u201cThe SMOKEOUT Act, (Stop Marijuana Over-Proliferation\u00a0 And Keep Empty Operators of Unlicensed Transactions\u201d (Okay, doesn\u2019t really flow off the tongue).<\/p>\n

The SMOKEOUT Act does just that \u2013 Section 455 allows for the taking and forfeiture of real property utilized in the illicit sale of cannabis and cannabis products. Unfortunately, the Act also allows a defense where the property owner establishes by a preponderance of the evidence (more likely than not) that the use of the real property was not intentional on the part of the owner.<\/p>\n

Obvious questions will arise as to what duty of investigation a property owner has. Can it turn a blind eye to the use? Will it have an affirmative obligation to determine and monitor how its property is being used. Do tenant uses like \u201csmoke shop\u201d and \u201cparaphernalia\u201d sufficiently put a landlord on notice that the use may be suspect? Can the property owner insulate itself from forfeiture by using a property manager or leasing agent between it and the tenant?<\/p>\n

All of these issues should be worked out, but as before, we suggest the duty to keep illicit operators out of retail should fall on the property owner, and an affirmative duty to investigate the use of the property and the risk of loss should fall squarely on the property owner.<\/p>\n

The\u00a0Senate version of the SMOKEOUT<\/a>\u00a0bill is currently in Investigations and Government Operations Committee.<\/p>\n

New Lawsuit Challenges Licensing and Fee Schedule Advantages For Women and Minorities; Claims White Men Denied Equal Protection<\/p>\n

January 25, 2024 \u2013 A lawsuit filed yesterday in the United States District Court for the Northern District of New York challenges the advantages given to women and minority applicants in retail licensing by the Office of Cannabis Management. The plaintiff, Valencia AG, LLC, based in Jamesville, NY is owned by \u201cmales of light pigmentation who might best be described as Caucasian or white men,\u201d according to the complaint. Valencia filed an application with OCM on October 12, 2023 seeking a microbusiness cannabis license. Not falling into any of the categories for SEE status, Valencia was unable to request any sort of priority status in its application.<\/p>\n

Believing that priority would be given to applicants that attested they either owned or rented space that was immediately ready to open, and relying on representations made by OCM, plaintiff leased a storefront for $2,000 per month, plus utilities and insurance.<\/p>\n

In January, when OCM published it list of the hierarchy of applicants based on the \u201crandomized,\u201d but prioritized and weighted selection of applicants, plaintiff ranked 2,042 out of about 2,200 \u201coperationally-ready\u201d applicants. Based on statements made by OCM, plaintiff believes it is unlikely that it will have its application reviewed or receive a license.<\/p>\n

The complaint alleges that the preference or priority given to women and minorities, over white men, violates the Equal Protection Clause of the United States Constitution. Plaintiff also charges that the higher application fees paid by white men over women and minorities also violates the US Constitution.<\/p>\n

For relief, Plaintiff asks for: (1) a preliminary and permanent injunction against the preferences given women and minorities; (2) a prohibition against OCM from processing any applications for cannabis licenses where those applications claim SEE status based on women or minority ownership; (3) the revocation and cancellation of licenses granted to SEE status licensees when based on women or minority ownership; (4) a refund of the higher application fees paid by applicants unable to claim SEE status based on women or minority ownership; and (5) a prohibition against the differing fee schedules based SEE status.<\/p>\n

The case was assigned to US District Court Judge Gary L. Sharpe, Case No.: 5:24-cv-00116-GLS-DJS.\u00a0 Plaintiff is represented by Robert Purcell, Esq., of Syracuse, New York.<\/p>\n

\u00a0<\/p>\n

New Jersey Opens Doors To Cannabis Lounges \u2013 Sets Rules<\/p>\n

January 28, 2024 \u2013 New Jersey Cannabis Regulatory Commission (NJ-CRC) finalized regulations to allow marijuana consumption lounges statewide. The regs are set to be published next month.<\/p>\n

Here\u2019s how the \u201csocial use\u201d licenses will work:<\/p>\n

Consumption lounges cannot sell food or alcohol, but adults 21 and older could their own bring food or have it delivered if the local government code allows it;
\nA consumption area must be attached to a dispensary, customers must be at least 21 or older;
\nFood trucks will be allowed, if provided for in the local municipal code;
\nMedical cannabis patients would be able to bring their own marijuana products;
\nA business would be limited to owning one social use license;
\nMicrobusinesses would pay a $1,000 fee for a \u201cconsumption area endorsement\u201d and standard businesses would pay $5,000;
\nThe application process hasn\u2019t opened yet, but according to NJ-CRC Chief Counsel Christopher Riggs, the application portal for prospective licensees will open soon; and
\nThere will also be an exclusivity period (length of time unknown) for social equity and diversity licensees before other social use licenses will be awarded.<\/p>\n

Adding the consumption lounges are expected to generate additional fees and tax revenue for the state.
On top of that, the commission also approved 70 new adult-use cannabis licenses, including retailers, manufacturers, cultivators and delivery services, positioning the state to see more than $1 billion in cannabis sales in 2024.<\/p>\n

OCM Establishes A Randomized Queue For Reviewing Adult-Use License Applications<\/p>\n

January 15, 2024 \u2013 Random generally means \u201cmade, done, happening, or chosen without method or conscious decision.\u201d Is it destiny or fate, or just the luck of the draw? Well, for the 2,000-plus applicants that applied between October 4th\u00a0and November 17th\u00a0for Non-Provisional Adult-Use Retail and Microbusiness, the random sequencing used by OCM establishes their place in line to have their applications reviewed.<\/p>\n

According to OCM, \u201cThe random queuing process was audited by an independent third-party to ensure it was random and unbiased.<\/p>\n

Keep in mind that the queue order doesn\u2019t indicate that order in which licenses will be issued, if at all, just the order in which the applications will be reviewed.<\/p>\n

For brevity, and space, here is a list of the first page of applicants. For the entire list, click here<\/a> to see where applications in your area fall out.<\/p>\n

Hochul Vetoed Law Allowing Growers To Sell Surplus To Tribal Retailers<\/p>\n

January 15, 2024 \u2013 Gov. Kathy Hochul (D) vetoed legislation at the end of December that would have allowed New York cannabis cultivation licensees to temporarily sell surplus cannabis to tribal retailers, as the state continues to struggle with a long-delayed market and limited number of dispensaries.<\/p>\n

Readers of this newsletter may recall that one proposal to aid growers with surplus inventory was to temporarily allow sales to tribal retailers who operate under a different set of laws as Adult-Use dispensaries. Those hopes were dashed by Governor Hochul.<\/p>\n

With the continue, but slow rollout of licensed dispensaries, growers will have additional outlets to sell inventory. But with sunsetting of Growers\u2019 Showcases and the inability to sell to tribal retailers, growers will continue to struggle with existing and new inventory until New York has enough retailers to absorb past and present crops.<\/p>\n

Multistate Operators Slow To Take The $5 Million Plunge<\/p>\n

January 15, 2024 \u2013 PharmaCann is the only medical operator to open a co-located store in the state.
Although\u00a0six cannabis multistate operators were approved by New York regulators to open retail shops, only one has so far taken the plunge.<\/p>\n

The New York Office of Cannabis Management confirmed that as of Jan. 5, only Chicago-based PharmaCann had paid the required $5 million retail license fee and opened a joint medical-recreational location in Albany, which does business as Verilife.<\/p>\n

The other five MSO\u2019s that are eligible to open dual medical-recreational shops are Columbia Care NY LLC, Curaleaf NY LLC, Etain LLC, NYCANNA LLC, and Valley Agriceuticals LLC.<\/p>\n

To open, MSOs will have to pay $5 million to the state for new adult-use cannabis retail locations. Each retail licensee \u2013 including the multistate operators \u2013 will ultimately be allocated three locations.<\/p>\n

Speculation is that until New York\u2019s illicit market is tamed, the $5 million entry fee makes the New York retail market less appealing.<\/p>\n

Here\u2019s The Skinny On Cannabis in New York State<\/p>\n

January 7, 2023 \u2013 OCM issued its 2023 Annual Report<\/a>. Here are some highlights:<\/p>\n

Adult-Use sales are expected to top $150 Million in 2023, with $137 million recorded as of December 9th.
\nThe state has 46 operational adult-use dispensaries opened and operating.
\nState regulators granted 6,200 licenses, permits, registrations and provisional approvals in 2023 and 2024, according to the OCM. This includes 279 adult-use conditional cultivator licenses, 40 adult-use conditional processor licenses, 463 conditional adult-use retail dispensary licenses, 5,404 cannabinoid hemp licenses and permits, and 10 approved medical cannabis organizations, which are called registered organizations (ROs) in New York.
\nThe OCM received 6,934 total applications: 538 from processors, 372 from cultivators, 351 from distributors, 1,349 from microbusinesses and 4,324 from retailers. Of the applications received, 3,826, or more than 55%, were from social equity applicants.
\nOCM officials has released a map<\/a> that identifies the communities deemed disproportionately impacted by past cannabis enforcement (Loads Slowly). Approximately 25% of New York\u2019s population experienced 75% of the arrests over the last four decades.
\nThe OCM indicated that it has provided training and mentorship to up to 300 conditionally approved retail licensees, as well as 241 legacy growers and processors, traditional farmers, and food and beverage manufacturers.
\nThe OCM\u2019s Social & Economic Equity Team trained and engaged more than 60 Technical Assistance Providers (TAPs) to offer support to more than 700 equity applicants who sought assistance.
\nRegulators also announced that the OCM is offering up to $50,000 in grants for eligible TAPs to support their efforts to help applicants in the recent application window.
\nThe OCM has also hosted more than 17 Cannabis Equity Roundtables to present the Social & Economic Equity Plan to advocates, municipalities, elected officials and interagency working groups.
\nRegarding New York\u2019s medical cannabis program, the state has more than 121,900 registered patients.
\nOfficials said they have seized 11,600 pounds of unregulated products, worth approximately $56 million street value. Officials have performed 369 enforcement inspections of unlicensed cannabis operations.
\nDispensary sales rose month by month throughout 2023. Adult-use cannabis sales grew from $2.2 million in January to $18.8 million in November.
\nAdult-use dispensaries carry roughly 550 locally grown strains.<\/p>\n

\u00a0<\/p>\n

End Of A Good Thing \u2014 Cannabis Growers Showcases Sunset December 31st<\/p>\n

December 11, 2023 \u2013 New York\u2019s Office of Cannabis Management made an unexpected announcement on Friday and dealt a fatal blow to the state\u2019s small contingent of craft growers who received a lifeline through Cannabis Growers\u2019 Showcases (CGS).<\/p>\n

OCM announced the successful Cannabis Growers Showcase program would be scrapped by year-end \u2013 over the objections and contrary to the wishes of cultivators.<\/p>\n

The showcases, which range from farmers market-like setups to pop-up tents to more conventional retail experiences, were designed to help marijuana cultivators sell off the glut of inventory left over from last year\u2019s growing season. The showcases generated more than $4 million in sales this year, or just under 4% of the total retail cannabis sales generated so far in 2023.<\/p>\n

The showcases broadened the availability of cannabis products throughout the state and enabled buyers to purchase cannabis products in areas where no retail outlets were open, and where none could open because of litigation that stalled the opening of new retail outlets.<\/p>\n

\u201cThere\u2019s not enough distribution for small farmers,\u201d Wyatt Harms, the co-founder and CEO of Brooklyn-based pre-roll brand Flamer, told MJBizDaily. He added \u201cthat many invested their life savings into legal marijuana. I don\u2019t know why you would stop a program that is providing at least some relief to the farmers.\u201d<\/p>\n

With only a few weeks left in the CGS program, a new application has been filed for two pop-up\u00a0showcases in Rosendale (Ulster County) in the former Esso gas station and Stone Krafters building at 2223 Route 32.<\/p>\n

If approved, the showcases would be held on December 22nd\u00a0through the 24th and again on the 29th\u00a0through the 31st. The promoters expect about 200 customers arriving each day with half-hour entry slots available.<\/p>\n

Two New Retail Dispensaries Open In Capital Region<\/p>\n

On Friday, the Office of Cannabis Management said 31 adult-use stores are now open statewide.<\/p>\n

Two newly opened retail dispensaries in the Capital Region include:<\/p>\n

420 Bliss opened December 7th at 740 Hoosick Street in Troy. According to New York State, 420 Bliss is owned by Al Attoh, Renee Lindo and Gregg Little, entrepreneurs with experience in the retail, real estate, construction and the music business.<\/p>\n

<\/a><\/p>\n

Capital District Cannabis and Wellness, 997 Central Avenue in Albany, opened December 8. The dispensary is owned by Capital Region natives James Frese and Pasha Adams, who bring to their enterprise diverse backgrounds in the restaurant and real estate industries.<\/p>\n


The new dispensaries are supported by the New York Cannabis Social Equity Investment Fund. The fund was created to provide opportunities for those impacted by the inequitable enforcement of cannabis laws.<\/p>\n

Six New Registered Organizations (Multi-State Operators) Receive CCB Approval<\/p>\n

The CCB, at its meeting Friday, approved the following six registered organizations for adult use retailing:<\/p>\n

Columbia Care NY, whose parent is New York-based MSO The Cannabist Co.
\nCuraleaf NY, part of New York-headquartered MSO Curaleaf Holdings.
\nEtain Health, owned by RIV Capital, a Toronto-based investment firm.
\nNYCanna, part of New York-headquartered MSO Acreage Holdings.
\nPharmaCann of New York, whose parent is Chicago-based MSO PharmaCann.
\nValley Agriceuticals, whose parent is Chicago-headquartered MSO Cresco Labs.<\/p>\n

In June, New York\u2019s Office of Cannabis Management proposed allowing ROs\/MSOs to enter the recreational retail market by year-end, reversing itself on the promised three-year waiting period for the state\u2019s 10 vertically integrated medical marijuana providers.<\/p>\n

The original roll-out provided a first-to-market advantage for social equity applicants and smaller suppliers by requiring the larger ROs to wait three years before competing. CCB scrapped that plan as it recognized the need to expand licensed and taxed retail availability in the face of thousands of unlicensed marijuana outlets that flooded the market statewide.<\/p>\n

Other states, like Maryland\u2019s relatively recent launch of adult cannabis, allowed ROs\/MSOs access on day one of opening the adult market without incident.<\/p>\n

Besides, whatever first-to-market advantage that existed was stalled and effectively derailed as approvals for hundreds of Conditional Adult-Use Retail Dispensary (CAURD) applicants and licensees were delayed for months because of lawsuits over the licensing process and social equity provisions that gave priority to justice-affected applicants over disabled veterans, distressed farmers, and women and minority owned businesses.<\/p>\n

The ROs should open their doors to adult-use retail sales on or around December 29th.<\/p>\n

Stipulation And Order Of Settlement Submitted To Court \u2013 Clock Starts On Acceptance<\/p>\n

November 28, 2023 \u2013 The long-awaited \u201cStipulation And Order Of Settlement And Dismissal<\/a>\u201d was filed with the Court this morning. For the 426 CAURD applicants caught up in the litigation and unable to advance their applications or open retail outlets, any relief is good relief, provided it includes lifting the injunction issued back on August 7th by Justice Kevin Bryant.<\/p>\n

The settlement stipulation hangs on the Court accepting its terms and dissolving the Preliminary Injunction within 10 business days of presentation to the Court, with an allowance for an agreement to extend the time should the court not feel bound by the time frame imposed by the Stipulation.<\/p>\n

No consideration is given for a modification of the terms of the injunction \u2013 it seems like a take it or leave it offer, and the terms specifically say that the failure to dissolve the preliminary injunction renders all of the other provisions of the Stipulation and Settlement null and void.<\/p>\n

The Stipulation settles all of the claims between the parties, with each side paying its own costs and attorney\u2019s fees. In exchange for the dismissal, OCM will issue one adult-use dispensary license to each plaintiff and take whatever other steps are necessary to \u00a0allow each plaintiff to become \u201cfully operational.\u201d Each plaintiff will also get \u201csite protection\u201d for the sites submitted.<\/p>\n

Part of the bargain struck precludes OCM from issuing and \u201cnew or additional provisional\u201d CAURD licenses until April 1, 2024, purportedly to allow OCM to focus and dedicate itself to process the pending applications and licenses.<\/p>\n

Another provision of the agreement establishes a requirement that OCM work with the Division of Service-Disabled Veterans Business Development to ensure that participants in that program can avail themselves of opportunities in the cannabis market.<\/p>\n

And, to prevent similarly situated potential plaintiffs from relying on this settlement to secure their own licenses, the language declares the settlement has no \u201cprecedential value\u201d and not binding beyond this agreement.<\/p>\n

Enforcement of the terms of the agreement are only available to the disabled veterans for 30 days from entry of an Order accepting the Stipulation (with a few extra days to cure). Within that window, an aggrieved party can move the court to compel enforcement of the terms of the stipulation. After that window closes, enforcement becomes an open issue.<\/p>\n

So, just like in the Variscite case, OCM avoided the complicated legal and constitutional questions by awarding licenses to complainants instead of addressing the underlying problems with the implementation of the laws and regulations applicable to the agency. But what about the distressed farmers, minority and women-owned businesses and other disabled veterans who were not parties to the litigation?<\/p>\n

Justice Bryant issued the temporary injunction because the implementation of the awarding of licenses ran afoul of the law \u2013 not just for the four plaintiffs, but for any applicant similarly situated. Yes, it\u2019s true that there was no effort to establish a \u201cclass\u201d for a class action suit, and giving away four licenses to set over 400 applicants back on track may seem like a small price to pay, but either the scheme awarding licenses was legal or it wasn\u2019t. Justice Bryant said it wasn\u2019t.<\/p>\n

For the next few days, perhaps longer, we will see just how Justice Bryant views the stipulation and settlement. Perhaps he has a longer, more expansive view of the legal issues, or perhaps he will defer to the litigants. Either way, we will know very soon.<\/p>\n

View the Stipulation and Order Of Settlement and Dismissal here<\/a>.<\/p>\n

Find a Cannabis Growers\u2019 Showcase Near You (As of December 2, 2023)<\/p>\n

\"Cannabis<\/p>\n

\u201cSettlement In Principle\u201d Reached In Disabled Veterans\u2019 Litigation<\/p>\n

November 20, 2023 \u2013 New York regulators and a collective of disabled military veterans who challenged the state\u2019s adult-use marijuana licensing process in state court have reached \u201can agreement in principle to settle this matter,\u201d according to correspondence from Plaintiffs\u2019 Counsel filed with the Appellate Division, 3rd Department, New York State.<\/p>\n

The agreement announced Monday between the New York Cannabis Control Board and plaintiffs is likely to lead to the end of a temporary injunction that\u2019s been in place since August as well as render moot motions for summary judgment pending before the Supreme Court.<\/p>\n

The injunction, put in place by the New York State Supreme Court Justice Kevin Bryant, stalled the issuance of more than 400 conditional adult-use retail dispensary (CAURD) licensees across the state, and prevented the opening of licensed dispensaries for months.<\/p>\n

The lawsuit, Carmine Fiore v. New York State Cannabis Control Board, filed by a cohort of disabled veterans, charged that the OCM overstepped its authority under New York\u2019s 2021 legalization law \u2013 the Marijuana Regulation and Taxation Act (MRTA) \u2013 when it opened the licensing application window first to those with cannabis-related offenses and their immediate family rather than allowing other similarly situated applicants \u2013 disabled veterans, distressed farmers and women and minority-owned businesses\u00a0to apply at the same time.<\/p>\n

The agreement still must be finalized by all parties, including the state Cannabis Control Board\u00a0and Justice Bryant, according to court documents.<\/p>\n

During the pendency of the litigation, the New York State Supreme Court allowed a few exceptions to the injunction. \u00a0Applicants caught up in the legal morass were left in a sort-of legal limbo, waiting on the sidelines while incurring financial losses from rent payments, legal fees, and other obligations they were obligated to meet.<\/p>\n

The \u201cagreement in principle\u201d is happening at a time when New York has opened its application process broadly, with thousands of new applications expected during the open-application period.<\/p>\n

The court delays from various suits likely contributed to the proliferation of illegal retail outlets across the state \u2013 some estimates put the number of illicit operations in the thousands, despite New York\u2019s efforts to crack down on unlicensed sellers of cannabis products.<\/p>\n

Tax Relief For NYC-based Cannabis Businesses<\/p>\n

November 20, 2023 \u2013 Governor Kathy Hochul has signed legislation that provides income tax relief to New York City marijuana businesses that are currently prohibited from declaring business expenses as federal deductions under an Internal Revenue Service (IRS) code known as 280E.<\/p>\n

Hochul signed it into law on Friday.<\/p>\n

While Hochul signed a separate bill last year that included provisions allowing state-level cannabis business tax deductions, New York City has its own tax laws that weren\u2019t affected by the state-wide change. The new measure is meant to close that gap and provide relief for New York City-based businesses.<\/p>\n

\u201cThis bill would allow a deduction for business expenses, incurred by taxpayers authorized by the Cannabis Law to engage in the sale, distribution, or production of adult-use cannabis products or medical cannabis, for purposes of the unincorporated business tax (UBT), the general corporation tax (GCT), and the corporate tax of 2015, commonly referred to as the business corporation tax (BCT),\u201d a summary of the law says.<\/p>\n

The city\u2019s tax code would be amended to add sections allowing the deductions \u201cin an amount equal to any federal deduction disallowed by section 280E of the internal revenue code.\u201d<\/p>\n

\u201cThis modification to income is appropriate because, while the expenses of cannabis-related business cannot be deducted for federal purposes, New York law permits and encourages these businesses akin to any other legitimate business occurring in the State,\u201d a memo attached to the bill says. \u201cThe City\u2019s business taxes should similarly encourage these business activities.\u201d<\/p>\n

Other states have pursued similar income tax workarounds. Marijuana tax reform legislation at the federal level is stalled, leaving state-licensed cannabis businesses with significantly higher federal effective tax rates than similarly situated businesses.<\/p>\n

The governor of New Jersey signed legislation in May to allow licensed marijuana businesses to deduct certain expenses on their state tax returns as a partial IRS 280E fix.<\/p>\n

Multistate Operators (Registered Organizations) Gain Entry To New York Cannabis Marketplace<\/p>\n

November 6, 2023 \u2013 To the joy of many, and the chagrin of others, New York is expanding medical cannabis retail licenses to large multistate operators.<\/p>\n

The application window for \u201cregistered organizations\u201d opened October. 31 and will run until 5:00pm\u00a0December\u00a019, according to a notice from state\u2019s Office of Cannabis Management (OCM).<\/p>\n

Registered organizations will pay a premium to enter what many refer to as the nation\u2019s most untapped retail marketplace. New York, nearly two years after launching adult use sales has just 27\u00a0fully-operational licensed adult-use retailers in the entire state, about one outlet for every million New Yorkers.<\/p>\n

The entry price is steep. Applicants must submit: (1) a nonrefundable application fee of $10,000 before the application deadline; (2) a registration fee of $200,000 within 10 business days of approval; and (3) in lieu of a lease or secured property, a secured bond of $2 million.<\/p>\n

OCM has not put a cap or limit on the number of RO licenses. Instead, the agency says it will \u201cissue registrations based on the quality of applications received and market needs.\u201d That statement is contained in a\u00a0FAQ put out by OCM<\/a>\u00a0offering explanations and details of OCM policies with links to other relevant materials.<\/p>\n

The early release of licenses to registered organization is a blow to the licensed and soon-to-be-licensed adult-use retailers as well as hundreds of Conditional Adult-Use Retail Dispensary (CAURD) licensees and applicants who have been trying to open stores for months while lawsuits drag on challenging the very framework of license issuance in the state.<\/p>\n

In September, the OCM voted to allow the state\u2019s 10 medical marijuana operators to apply for adult-use retail licenses, essentially reversing its policy to ban MSOs entering the recreational market for the first three years.<\/p>\n

OCM plans to protect the RO\u2019s trade secrets and confidential information from New York\u2019s Freedom of Information Law requests made by the general public and likely competitors by asking the ROs to identify which areas of the application they wish to be redacted as exempt from disclosure.<\/p>\n

And, the guidance says that ROs that submit applications earlier within the application window will not have an advantage over applications submitted later. All applications must be submitted by the December 19th deadline.<\/p>\n

Senate Subcommittee Meeting Discusses\u00a0Flaws in Cannabis Rollout<\/p>\n

November 6, 2023 \u2013 Last Monday, members of a New York Senate committee heard from witnesses and discussed legislative solutions to the state\u2019s ongoing cannabis legalization implementation rollout and related problems.<\/p>\n

The Senate Cannabis Subcommittee is chaired by Sen. Jeremy Cooney (D), who said, \u201cThe goal of the hearing today is to provide an opportunity for stakeholders across the adult-use retail cannabis space to raise concerns and to offer constructive feedback regarding the current cannabis landscape in order to foster a more robust and equitable recreational adult-use cannabis marketplace in New York.\u201d<\/p>\n

Chris Alexander, Executive Director of the Office of Cannabis Management (OCM), along with other officials with OCM, testified at the hearing.<\/p>\n

Alexander assured members that state regulators are working to address concerns with what some refer to as the state\u2019s cannabis legalization rollout failure. He recognized that delays related to various lawsuits and pending litigation have had a \u201csignificant impact on the rest of New York\u2019s adult use cannabis supply chain.\u201d<\/p>\n

\u201cSmall farmers who are already distressed were left with no outlets for their product and have experienced significant financial hardship and uncertainty as a result,\u201d he said. \u201cWe still have a long way to go before we can claim that the supply chain is functioning as intended.\u201d<\/p>\n

Supply chain issues were also raised by Senate Agriculture Committee Chair Michelle Hinchey (D) who said she and other lawmakers have been \u201csounding the alarm since the middle of the legislative session earlier this year on the crisis that\u2019s happening right now for our cannabis farmers to effectively very little to almost zero response.\u201d<\/p>\n

Hinchey referred to legislation that was passed by lawmakers and is awaiting the governor\u2019s action, the Cannabis Crop Rescue Act. It would allow licensed marijuana producers to sell products to tribal retailers, which Hinchey said is an example of how the legislature is seeking to ameliorate the issue.<\/p>\n

Lawmakers and regulators discussed the state\u2019s THC potency tax, illicit market enforcement efforts, licensing distribution priorities, preventing youth from accessing cannabis, and laboratory testing practices.<\/p>\n

Additional governmental witnesses included representatives of the Cannabis Advisory Board, Dormitory Authority of the State of New York (DASNY), New York State Department of Taxation & Finance, New York City Council and New York City Sheriff\u2019s Office.<\/p>\n

Watch the New York Senate committee marijuana hearing in the video below:<\/p>\n

Powerhouse Lawyers Take On Federal Government\u2019s Interference With Legal Cannabis<\/p>\n

October 29, 2023 \u2013 Finally, a suit filed in the United States District Court for the Western Division of Massachusetts against Merrick Garland in his capacity at United States Attorney General by a group of cannabis growers, processors, transporters and retailers from Massachusetts sets the stage for the undoing of the part of the Controlled Substances Act that makes participation in state cannabis programs a federal crime.<\/p>\n

Filed by powerhouse lawyers at\u00a0Boies, Schiller and Flexner<\/a>\u00a0on October 25th, the lawsuit details the obstacles that legal cannabis businesses face based on what the suit describes as an archaic adherence to federal marijuana laws that are no longer applicable in a nationwide environment where 38 states, including the District of Columbia have legalized medical and\/or recreational cannabis.<\/p>\n

The suit describes a myriad of problems \u2014 denial of access to SBA loans and federal grants, denial of access to banking and credit card processing, denial of access to mortgages, loans and leasing opportunities, denial of access to payroll processing, denial to access to job fairs and training programs, unfair taxation and other difficulties \u00a0\u2014 all caused by the federal government\u2019s adherence to what the suit says is an unconstitutional exercise of federal authority.<\/p>\n

Additional obstacles include denial of access to bankruptcy and trademark protections, complications with delivery to customers residing in federal housing or receiving federal housing support, and denial of federal farm benefits to farmers that lease even a portion of their fields for cannabis cultivation.<\/p>\n

While the suit, filed in Massachusetts describes the difficulties of Massachusetts residents and businesses, the same obstacles are faced in New York and elsewhere and any relief afforded would likely be applied nationwide, or certainly to any state that adheres to the rigid controls in place in Massachusetts to keep cannabis out of interstate commerce.<\/p>\n

The suit asks for relief in the form of declaratory judgments. First, that the CSA as applied to plaintiffs exceeds Congress\u2019s authority under the commerce clause (regulation of interstate commerce) and the necessary and proper clauses. Second, declaratory relief that the CSA as applied to plaintiffs violates due process, that is by regulating cannabis in states where it is legalized, the federal government\u2019s actions are unwarranted and unlawful.<\/p>\n

The obstacles are real and this is the suit to watch going forward, though no temporary or permanent injunctive relief was requested. The SAFE Banking Act and rescheduling of cannabis may relieve some of the pressure on cannabis businesses, but would only have a limited impact on the problems created by the federal government\u2019s adherence to the CSA.<\/p>\n

The suit was filed in the Western Division of\u00a0the United States District Court for the District of Massachusetts, Case No.:\u00a03:23-cv-30113-KAR.<\/p>\n

State Senate Subcommittee Meeting Studies Flaws in Cannabis Rollout<\/p>\n

October 29, 2023 \u2013 All eyes are on the New York State Senate Subcommitee on Cannabis which is holding a public hearing, set for 11:00 October 30 at 11:00am, to discuss problems plaguing New York\u2019s fledgling cannabis market.<\/p>\n

The hearing, organized by Senator Jeremy Cooney, D-Rochester, who serves as the chair of the Subcommittee on Cannabis, will discuss the multiple lawsuits stymying the rollout of retail dispensaries as it relates to the State\u2019s commitment to social justice goals, as well as the adverse impact on growers, processors and retailers.<\/p>\n

Since passage back in 2021, the legal market for cannabis in New York has met a number of obstacles, both legal and logistical.<\/p>\n

\u201cAs state lawmakers, we can\u2019t just pass bills and hope they work out. Instead, through legislative oversight, we have the responsibility to work with our governor and state agencies to ensure our collective goals are met,\u201d Cooney said. \u201cTwo years after legalizing adult-use recreational cannabis, New Yorkers are frustrated and disappointed in the state\u2019s ability to launch a safe and legal marketplace. I am calling this hearing with my partners in the Senate because we believe New Yorkers deserve clarity on what has been done so far and how we can help the retail market going into the next legislative session.\u201d<\/p>\n

Licensing, has proven a challenge for the state. When New York first legalized recreational cannabis, it established the Conditional Adult-Use Retail Dispensary\u00a0(CAURD)<\/a>\u00a0licensing program.<\/p>\n

However, in recent litigation, New York Supreme Court Judge Kevin R. Bryant halted the approval of CAURD licensing for all of New York State, based on the priority given justice-affected applicants over other eligible licensees. The suit was brought by a group of disabled veterans who were supposed to have the same access to licensing as justice-affected applicants.<\/p>\n

Bryant has since partially lifted the suspension, but only for about 30 licensees out of 463 given conditional approval. What\u2019s clear to Cooney and his committee is that industry iprogress\u00a0is pretty much at a halt, even with the opening of new applications and licensing options.<\/p>\n

The October 30 hearing will also host the chairs of related Senate committees. The committee chairs of Agriculture, Finance and Investigations and Government Operations will all be attending. Additionally, testimony from cannabis growers, retailers and regulators will shine a spotlight on the flaws of the budding industry and hopefully discuss solutions.<\/p>\n

This newsletter will update its readers on what happens at the committee meeting as soon as we are able.<\/p>\n

New York\u2019s Report Card on Dispensaries & Sales Show Comparative Weakness<\/p>\n

October 23, 2023 \u2013 Let\u2019s face it. New York\u2019s rollout of legalized recreational marijuana dispensaries has not met the state\u2019s expectations. Whether it was the federal lawsuit that challenged a system that preferred in-state applicants, or the state suit challenging the exclusion of disabled veterans as compared to justice-affected applicants, there have been a series, to be generous, of \u201cspeed bumps.\u201d<\/p>\n

But how bad has New York\u2019s rollout been compared to other states and how have revenues met or fallen short of expectations. Remember that New York\u2019s recreational market was expected to generate more than $1 billion per year in sales by 2025, and $4.41 billion by 2030, according to cannabis research firm New Frontier Data.<\/p>\n

So let\u2019s take a data dive at the numbers and see how New York is faring compared to other states that have legalized recreational marijuana. The analysis leaves off those states that had several years head start, and looks primarily at those states that legalized cannabis in 2019 or later.<\/p>\n

<\/p>\n

New York passed MRTA in 2021. States like Maryland and Missouri passed their versions of legalized cannabis in 2022. Michigan with and Montana both had a head start over New York. But, New York has only\u00a027 open dispensaries (as of this writing), while states like Maryland (which legalized cannabis in 2022) already have 101 dispensaries. Missouri, which legalized last year, has 214.<\/p>\n

When New York State legalized recreational cannabis sales in 2021, the state predicted it at least 120 adult-use recreational dispensaries would be open by now.<\/p>\n

Montana has 432 dispensaries. New Mexico has 633 \u2013 more than twenty times the number in New York.<\/p>\n

But it\u2019s not only the number of dispensaries that are behind expectations. Let\u2019s take a dive at taxable sales, compiling the best numbers available.<\/p>\n

In 2023, New York has pulled in about $66 million in taxable sales. Montana, with about 1\/20th\u00a0of the New York\u2019s population has generated nearly $170 million during the same time period.<\/p>\n

<\/p>\n

And, even though New York and New Jersey have about the same number of legally operating dispensaries, New Jersey has sold more than $305 million worth of recreational pot from its 29 dispensaries, four times New York\u2019s sales. Connecticut\u2019s sales eclipse New York\u2019s by 50%.<\/p>\n

Maryland stands apart. With legalized sales outlets first open in July, including allowing medical operators to sell recreational cannabis, it has generated $85 million in sales in the first month of opening dispensaries\u00a0\u2013 more than New York has all year to date.<\/p>\n

Critics say that New Yok has made a series of errors, including a flawed roll-out preferring justice-affected applicants, delay in allowing sales from medical cannabis operators, and a calamity in funding available to conditional licensees.<\/p>\n

Others say despite these self-inflicted errors, New York sought to protect small operators from being overwhelmed by bigger, more experienced growers and sellers and that that was the right thing to do.<\/p>\n

But these same stumbles have rendered New York\u2019s legal cannabis cultivators unable to find buyers for a good part of last year\u2019s crop, as well as this year\u2019s.<\/p>\n

New York is trying to make amends and get its cannabis industry back on track. Licensing is opened up broadly with thousands of applications flooding in. Medical marijuana firms will be able to to open adult-use stores this year and next.<\/p>\n

Marginalized applicants will still receive some priority, with a lion\u2019s share of the licenses in the general application pool going to them. New York is also fast-tracking applicants who can adequately prove they have control of a location (without contingencies) hoping to have more locations open soon.<\/p>\n

All of these measures should help. Let\u2019s take a look at these same metrics in mid-2024 and hopefully, New York\u2019s nascent industry will be on a path to better meet its potential and expectations.<\/p>\n

Adult Use Cannabis License Application Window Extended to December 18th<\/p>\n

October 23, 2023 \u2013 The New York State Cannabis Control Board (CCB) voted to extend the adult-use cannabis license application window from December 4, 2023, to 5 PM EST\u00a0Monday, December 18, 2023.\u00a0This application window applies to all adult-use license types.<\/p>\n

Additionally, the\u00a0priority application period for non-provisional\u00a0retail dispensary or microbusiness licenses where the applicant can demonstrate proof of control over a location, is also extended from November 3, 2023, to\u00a05 PM EST on Friday, November 17,\u00a02023.<\/p>\n

Due to the uncertainty caused by the pending litigation challenging the validity of the CAURD program, provisional CAURD licensees have been notified of the opportunity to apply for an adult-use retail dispensary license during this application window.<\/p>\n

Individuals with questions about the application process are encouraged to attend one of OCM\u2019s \u201cRoadmap to Adult-Use Application\u201d events\u00a0virtually or in-person to get real-time answers. These live sessions will provide insight\u00a0and guidance on\u00a0the application process.<\/p>\n

Stay Pending Appeal Denied; Expedited Briefing Schedule and Calendar Preference Issued<\/p>\n

October 16, 2023 \u2013 Many were surprised when the Supreme Court, Appellate Division, asked pointedly if the Cannabis Control Board\u2019s Motion For A Stay of Justice Bryant\u2019s Injunction was rendered moot by the opening of Adult-Use Licenses on October 4th. More surprising though was the response from the CCB and the Appellate Court\u2019s Order denying the stay pending appeal. It seemed of little consequence to those awaiting relief that the Court agreed to a calendar preference (over other pending appeals) and an expedited briefing schedule.\u00a0With briefing completed by November 3rd, perhaps a resolution of the matter is not far off.<\/p>\n

Meanwhile, the CAURD licensees stuck behind the injunction continue to incur losses in time and money. Growers continue to lose access to retail markets. Processors the same. The opening of the licensing options on October 4th\u00a0was good news for some, but to date only five licensees have secured relief from the temporary injunction.<\/p>\n

Those fortunate few are Kush Culture Industry (Queens, NY), ConBud LLC (Manhattan), Air City Cannabis (Mohawk Valley), Gotham Buds, LLC (Manhattan), North Country Roots, Inc (North Country, Plattsburgh).<\/p>\n

The license\u00a0applications open\u00a0as of October 4th\u00a0include\u00a0Adult Use Cultivators<\/a>,\u00a0Adult Use Processors<\/a>,\u00a0Adult Use Distributors<\/a>,\u00a0Adult Use Retail Dispensaries<\/a>, and\u00a0Adult Use Microbusinesses<\/a>.<\/p>\n

Applications for nursery, delivery, cooperative or collective, and on-site consumption licenses will be made available at a later date. Most municipalities in the state opted out of allowing consumption lounges in their jurisdictions.<\/p>\n

The existing conditional adult-use dispensary or CAURD licenses are good for four years from the day issued. However, conditional cultivator licenses expire two years after issue and OCM is recommending those licensees start the transition (away from conditional) during the upcoming window.<\/p>\n

The Office of Cannabis Management has sought to clarify the \u201cNotice To Municipality\u201d requirements for applicants applying for a retail dispensary or microbusiness license with retail authorization and made clear that OCM does not consider these types of applications filed until:<\/p>\n

the applicant provides proof of notification to the municipality;
\nthe applicant submits proof of control over the proposed retail dispensary location; and
\nthe proposed retail dispensary location receives a location determination from the Office as to whether the location meets the proximity requirements in the Cannabis Law and corresponding regulations.<\/p>\n

In order to comply with Section 76 of the Cannabis Law, an applicant must have completed their notification to municipality 30 days before an application is filed with the Office.<\/p>\n

OCM acknowledged some confusion and said, \u201cApplicants intending to apply for a final license during the first 30-day application window have expressed concerns that they will not be able to meet the 30-day notice to municipality requirement and still be able to apply by November 3, 2023.\u00a0 In response, the Office is clarifying that the Office will not be making any location determinations on proposed retail locations submitted with an application on or before November 3, 2023 until at least 30 days following the closing of that application window. Accordingly, any applicant that applies with proof of control of a retail location (for a proposed retail dispensary or microbusiness with retail authorization) can upload their application on or prior to November 3, 2023, at 5:00PM, and still meet the notice to municipality requirement established by Section 76 .\u201d<\/p>\n

Applicants applying for a provisional license (without proof of control over a proposed retail location) can apply up until December 4, 2023 at 5:00PM. Applicants for a provisional license do not need to complete the notification to municipality at the time of initial application upload, since no location is associated with their application. Once a provisional licensee finds a location, they must complete the notification to municipality requirement in the same manner as an applicant applying with proof of control of a retail location.<\/p>\n

Municipalities will each receive a minimum of 30 days (or 60 days if a 30-day extension is properly requested) to review the proposed location for the retail dispensary or microbusiness with retail authorization and be able to provide an opinion to the Cannabis Control Board (CCB) as required.<\/p>\n

Clocks (or calendars) are ticking, and applications will likely number in the thousands.<\/p>\n

October 4 Opens The Door To New Cultivators, Retailers, Distributors, Processors & Microbusinesses<\/p>\n

October 2, 2023 \u2013 On Wednesday, New York state will begin accepting applications for new cultivators, distributors, retailers, processors and microbusiness licenses. Microbusinesses are allowed to cultivate and sell their own cannabis from a retail venue or farm stand.<\/p>\n

Expectations are that the OCM will issue between 1,500 and 2,000 new licenses, though new guidance says 500-1000 retail dispensaries, 220 microbusinesses, 40 indoor cultivation licenses, 30 distributors and 155 processor licenses. For more details on guidance,\u00a0click here<\/a>.<\/p>\n

\u201cWe\u2019re expecting thousands of applications from folks all across the country who want to come and operate in what will be the best market in the world,\u201d Chris Alexander, state Office of Cannabis Management Executive Director, said during an advisory board meeting last Tuesday.<\/p>\n

So far, the state has issued about 700 conditional licenses, including 273 for cultivators, 40 for processors, 463 justice-involved and 10 not-for-profit retailers. But, fewer than two dozen retail stores are open to date because litigation over the priority given to justice affected applicants over disabled veterans and others has derailed the openings of new dispensaries.<\/p>\n

On Friday, New York issued new guidance called \u201cA Roadmap To Adult Use Applications.\u201d<\/p>\n

According to the guidance: \u201cStarting October 4, applications for Cultivator, Processor, Distributor, Microbusiness and Retail Dispensary licenses will be available on New York Business Express (NYBE). All adult-use license applications must be submitted by 5:00 PM EST on Monday, December 4, 2024. The Office will commence its first and approval process for applicants who apply with control over a proposed retail dispensary or microbusiness location by 5:00 PM EST on Friday, November 3, 2023. The retail and microbusiness licenses applications will remain open to collect applications for provisional licensure until the 5:00 PM EST on Monday, December 4, 2023, deadline.\u201d<\/p>\n

\u201cApplicants for a cultivator, processor, or distributor license must submit proof of location control to be considered in this application window. Applicants for a retail dispensary or microbusiness license who apply with proof of control over a location will be on track to go through the November 3rd approval process.<\/p>\n

\u201cWith the mission of equity and access, the Cannabis Law establishes a goal to award 50% of all adult-use licenses to Social and Economic Equity (SEE) applicants including individuals from communities disproportionately impacted by the enforcement of the prohibition of cannabis, minority and women owned businesses, distressed farmers, and service-disabled veteran-owned businesses.<\/p>\n

\u201cApplication and license fees are reduced by 50% for all qualified SEE applicants. In order to qualify for SEE status, sole control of the applicant must be held by an individual (or individuals) from the groups that qualify for SEE.<\/p>\n

Proof of location control is generally thought to be ownership of a property, a fully-executed lease without contingencies. An open question would be a binding Letter Of Intent from a Landlord, but as this is not listed as \u201ccontrol\u201d it is probably a better practice not to rely on an LOI, even if binding..<\/p>\n

The licenses available include\u00a0Adult Use Cultivators<\/a>,\u00a0Adult Use Processors<\/a>,\u00a0Adult Use Distributors<\/a>,\u00a0Adult Use Retail Dispensaries<\/a>, and\u00a0Adult Use Microbusinesses<\/a>. Click on the links for an overview of each license type.<\/p>\n

Additional license types, including nursery, delivery, cooperative or collective, and on-site consumption licenses will be made available at a later date. Most municipalities in the state opted out of allowing consumption lounges in their jurisdictions.<\/p>\n

The existing conditional adult-use dispensary or CAURD licenses are good for four years from the day issued. However, conditional cultivator licenses expire two years after issue and OCM is recommending those licensees start the transition (away from conditional) during the upcoming window.<\/p>\n

\u201cThis will not be the only time that conditional licensees can transition. We\u2019ll open up another period for the transition before that license expires but we hope they will get it done now,\u201d Alexander said.<\/p>\n

Authorized Growers\u2019 Showcases:<\/p>\n

\"\"<\/p>\n

\u00a0<\/p>\n

Bulk Sales To Tribal Nations May Offer Cultivators An Outlet For Unsold Cannabis<\/p>\n

October 2, 2023 \u2013 A bill waiting for Governor Hochul\u2019s signature could affect the fortunes of the many cultivators who have been unable to sell cannabis grown in the last season for want of retail outlets.
<\/a>
The law, if signed, will allow the bulk sales of cannabis to tribal retailers. The bill authorizes \u201cconditional adult-use cultivator and processor licensees to sell tested, packaged, and sealed cannabis products or biomass to a cannabis dispensing facility licensed or permitted by a tribal nation for retail sale.\u201d<\/p>\n

Sixty-six members of New York\u2019s legislature are urging Gov. Kathy Hochul to sign the bill that would allow licensed marijuana producers to sell products to tribal retailers. The law would provide much needed relief to the hundreds of cannabis farmers sitting on surplus product with\u00a0less than two dozen open retailers to absorb the inventory and few growers showcases approved and scheduled.<\/p>\n

\u201cRight now, there are over 200 cannabis farmers trying to sell their crops but only 23 dispensaries open statewide,\u201d the bipartisan Senate and Assembly members wrote in the open letter to Hochul on Monday. \u201cThis has resulted in more than 250,000 pounds of unsold cannabis. Farmers who took out loans and leveraged all their assets to cultivate these crops are demoralized and facing financial disaster unless we act quickly to provide them with an alternate market.\u201d<\/p>\n

Lawmakers want the governor to sign S.7295\/A.7375, titled the \u201cCannabis Crop Rescue Act<\/a>\u201d and passed by the legislature in June.<\/p>\n

The letter issued by the legislators cite, \u201cregulatory delays, lawsuits, and logistical and financing challenges have caused the state to miss its timelines and targets,\u201d and continues. \u201chowever, cultivators are the group paying the steepest price.\u201d<\/p>\n

\u201cNew York\u2019s cannabis farmers, who went out on a limb to help get the state\u2019s legal market off the ground, should not be facing financial ruin because of regulatory delays,\u201d the group said. \u201cWe should be giving them every possible opportunity to stay afloat while they await the development of the market they were promised.\u201d<\/p>\n

\u201cWhile lawsuits are being litigated and illegal stores are flourishing, NY\u2019s cannabis farmers are suffering,\u201d lawmakers said in the earlier statement. \u201cCrops were grown last year with the understanding that there would be a legal market for them to sell it\u2026 We are urging the governor to quickly sign this short-term solution, one that will help provide some measure of relief to what is quickly becoming an agricultural emergency.\u201d<\/p>\n

A sponsor memo states that conditional cultivation licenses were originally issued \u201cwith the understanding that growers would not be permitted to sell their product outside of state lines, but that a robust state market would exist during the conditional license timeframe.\u201d<\/p>\n

\u201cDue to a variety of circumstances beyond the control of New York\u2019s cannabis farmers,\u201d it continues, \u201cmany licensees are unable to sell their finished products or afford to process their cannabis.\u201d As a result, \u201ccrops are losing potency, color, and terpene profile in storage, greatly reducing their value. Without the ability to sell their product, many are in severe financial distress and will be unable to afford to plant a crop this growing season.\u201d<\/p>\n

About 280 cultivators in New York currently have conditional licenses, which were initially offered to those already participating in the state\u2019s hemp pilot program. Allowing growers and processors to sell to retailers licensed by tribal nations \u201cprotects New York\u2019s cannabis industry, including distressed growers, to ensure a healthy local cannabis economy into the future,\u201d the sponsor memo says.<\/p>\n

Lawsuit by Third-Party Marketer\/Aggregator Challenges New York Cannabis Regulators As Anti-Competitive<\/p>\n

September 25, 2023 \u2013 It seems like New York State\u2019s Cannabis laws were designed to prevent price competition among dispensaries and keep competitive pricing information away from the public.<\/p>\n

Statements like, \u201cWe don\u2019t want consumers comparing prices. We want them to go to their neighborhood\u201d dispensary to buy cannabis, is the message fromOffice of Cannabis Management former chief of staff Axel Bernabe, according to a lawsuit filed by Leafly, a Delaware company based in Seattle.<\/p>\n

The lawsuit, filed by Leafly and others challenges the barriers to entry in the nascent marketplace. The litigation basically challenges NY\u2019s ban on third-party marketers and information aggregators that would compile pricing and other information for consumer comparison.<\/p>\n

In New York, third-party marketers are allowed to compare alcohol prices and publish them, but not so for cannabis data aggregators.<\/p>\n

A Leafly spokesperson called the ban \u201ca misguided attempt to keep consumers uninformed and to restrict retailers\u2019 ability to market and promote their products.\u201d<\/p>\n

To demonstrate harm and possibly avoid standing issues, Stage One Dispensary in Rensselaer, and an individual Leafly consumer in Erie County are also named plaintiffs in the suit, which calls New York\u2019s adoption of the regulation arbitrary and capricious, and a violation of the U.S. and New York constitutions.<\/p>\n

\u201cNew York\u2019s Office of Cannabis Management has had every opportunity to build on the experiences of other states\u2019 legal cannabis markets, and instead has chosen to adopt a set of misguided regulations that, in some key respects, unduly hamstring the state\u2019s burgeoning cannabis industry,\u201d Leafly said in a statement.<\/p>\n

Small cannabis business owners already \u201cface significant limitations in their ability to reach cannabis consumers.\u201d<\/p>\n

So far, after more than 2-1\/2 years, only 23 retailer businesses have opened, but the state has committed to open applications broadly beginning Oct. 4 and running for sixty days thereafter, with no limitations on the number of applicants or licenses. It has also opened its market to out-of-state operators.<\/p>\n

To prepare for the New York market, Leafly claims to have invested more than $300,000 and 500 hours to connect, strengthen, and grow New York\u2019s cannabis industry. It says retailers rely on Leafly to provide a platform to connect with, and advertise to, consumers.<\/p>\n

According to the lawsuit, the regulations banning Leafly\u2019s marketing services are \u201cinconsistent with the New York Cannabis Law, irrational, unsupported by the facts, and arbitrary and capricious. Even worse, these regulations violate Petitioners\u2019 rights guaranteed by the United States and New York Constitutions.<\/p>\n

Leafly says it operates in a manner\u00a0akin to Open Table, an app that does not take payments and does not sell food, but nevertheless facilitates connecting consumers with restaurants through an online business model providing free publicly accessible information to turn a profit.<\/p>\n

BREAKING NEWS! The New York State Office of Cannabis Management has filed a motion in the appellate court seeking a 60-day stay of Justice Bryant\u2019s Preliminary Injunction. If granted, that time would allow it to continue to process CAURD applications. The major complication and confusion is that the October 4th opening for general licensing will occur before a decision on the stay is likely.\u00a0 Stay tuned\u2026..<\/p>\n

New Regulations From CCB Seek To Offer Clarity On General Non-Conditional\u00a0Licensing<\/p>\n

September 18, 2023 \u2013 A raft of new regulations was adopted by the Cannabis Control Board (CCB) last week that many hope will solve the ills that sidelined the 2-1\/2 year old rollout of New York\u2019s cannabis industry.<\/p>\n

Some also believe that these new regulations will mitigate the complications of various lawsuits brought against the CCB, including the ones brought by medical marijuana sellers and disabled veterans \u2013 both of whom claim that the CCB\u2019s rollout was in contravention of the plain language of the enabling law.<\/p>\n

The new regulations outline licensing and operating procedures for the different segments of the cannabis industry. They provide for the licensing of eight types of businesses: plant nurseries, cultivators, processors, distributors, dispensaries, delivery services, microbusinesses and cooperatives.<\/p>\n

As originally intended, the licensing divides out between suppliers and retailers, with a ban on entities holding stakes in the other to prevent market domination.<\/p>\n

The new rules also offer some clarity on priority licensing for social equity and economic equity applicants and include distressed farmers.<\/p>\n

Companies licensed to sell medical marijuana, after the payment of a $20 million fee, can enter the adult use recreational market as both retailers and wholesalers. Also, like a microbusiness, these companies can grow, manufacture and sell their own product.<\/p>\n

The 300 cultivators and processors who have been operating under conditional licenses will be able to operate with a general, non-conditional license.<\/p>\n

Pending will be additional guidance on completing applications and qualifying as a social and economic\u00a0 equity applicant.<\/p>\n

Starting October 4th, applications will be accepted for 60 days. Application fees range from $750 to $300,000, with discounts available.<\/p>\n

The regulations do not contemplate a cap on the number of dispensary licenses, though the\u00a0New York Times\u00a0recently referred to analysts who estimate up to 2000 dispensaries would be necessary to handle consumer demand.<\/p>\n

One category missing from the new regulations is guidance on consumption lounges.<\/p>\n

Not all commentators at\u00a0last week\u2019s meeting were happy about the acceleration of allowing medical cannabis companies to operate fearing that allowing these large corporations to operate would give them an unfair advantage and ultimately enable them to dominate the market.<\/p>\n

Feds Consider Rescheduling Marijuana From Schedule I To Schedule III<\/p>\n

Change would affect\u00a0taxes, but not access to institutional banking.<\/p>\n

September 8, 2023 \u2013 The Health and Human Services Department has recommended moving marijuana from a \u201cSchedule I\u201d drug to \u201cSchedule 3\u201d essentially reclassifying cannabis from a category of drugs deemed to have \u201cno currently accepted medical use and a high potential for abuse\u201d to a less regulated, but still controlled category.<\/p>\n

No action has yet to be taken, and the decision will be\u00a0made in conjunction with the Drug Enforcement Administration. A lengthy and public review process would follow, including opening a public comment period.<\/p>\n

Schedule I drugs include heroin, quaaludes and LSD.<\/p>\n

Schedule III drugs are still considered controlled substances and generally include ketamine, anabolic steroids and some acetaminophen-codeine combinations. Trafficking Schedule III drugs is still a federal crime. Producing, storing and selling Schedule III drugs requires prescriptions and intensive record-keeping and tracking.<\/p>\n

The biggest benefit to the fledgling New York dispensary business relates to taxes. Under the federal tax code, dispensaries that sell Schedule I drugs cannot deduct rent, payroll or various other expenses that other businesses can write off. Without the ability to write off these expenses, licensed pot dispensaries can pay an effective tax rate of up to 70%. Illicit and unlicensed pot sellers that don\u2019t pay income taxes have an unfair advantage over licensed sellers.<\/p>\n

The ban against deducting business expenses doesn\u2019t apply to Schedule III drugs, so the proposed change would cut dispensaries\u2019 taxes substantially and level the playing field against illegal and unlicensed competitors.<\/p>\n

That said, the reclassification from Schedule I to III doesn\u2019t change the federal rules regarding banking where federal regulations deny dispensaries access to institutional banking. Those changes won\u2019t come until the SAFE Banking Act passes in one form or another.<\/p>\n

National Organization for the Reform of Marijuana Laws Deputy Director Paul Armentano said that reclassifying marijuana would be \u201cperpetuating the existing divide between state and federal marijuana policies.\u201d<\/p>\n

Minority Cannabis Business Association President Kaliko Castille said rescheduling just \u201dre-brands prohibition.\u201d<\/p>\n

\u201cSchedule III is going to leave it in this kind of amorphous, mucky middle where people are not going to understand the danger of it still being federally illegal,\u201d Castille said.<\/p>\n

Change comes slowly and in incremental steps.<\/p>\n

Yet Another Lawsuit Seeks to Undermine New York\u2019s Fledgling Cannabis Industry<\/p>\n

Coalition equates state funding with money laundering.<\/p>\n

September 8, 2023 \u2013 Not everyone is happy that recreational cannabis has been legalized in New York State.<\/p>\n

Anti-cannabis groups \u2014 the Cannabis Impact Prevention Coalition and the Cannabis Industry Victims Seeking Justice, along with several individual plaintiffs \u2013 filed suit in federal court in Albany charging that New York\u2019s $200 million dollar, state-established fund supporting social equity licensees is essentially \u201cmoney laundering\u201d.<\/p>\n

The suit was filed against the Governor, the Cannabis Control Board, the Office of Cannabis Management and various officers and directors of those entities. The suit seeks declaratory and injunctive relief.<\/p>\n

The suit takes a clever approach to shutting down New York\u2019s cannabis industry. It charges that the Dormitory Authority of the State of New York (DASNY), a state agency which oversees the $200 million fund, is violating federal law due to marijuana\u2019s status as a Schedule 1 narcotic.<\/p>\n

\u201cIt is unlawful to knowingly open, lease, rent, maintain, or use property for the manufacturing, storing, or distribution of controlled substances,\u201d the lawsuit claims. \u201cDASNY normally finances, designs, and builds health and education infrastructure. Ironically, DASNY would instead become the biggest marijuana trafficking landlord in New York.\u201d<\/p>\n

\u201cThe taxes that the state collects from marijuana sales are the proceeds of marijuana trafficking,\u201d the lawsuit states. \u201cThe fact that the state collects these proceeds as taxes does not magically cleanse them of their illegality.\u201d<\/p>\n

This is the second lawsuit filed by the coalition seeking to undermine New York\u2019s legalization laws. The earlier suit was based on federal preemption, arguing that federal law making marijuana illegal trumps state laws that legalize it.<\/p>\n

The effectiveness of the DASNY-managed fund has been a subject of much debate. DASNY has signed only twenty three leases for dispensary locations, and is negotiating sixty-one others.<\/p>\n

Earlier this month, an injunction from a New York State Supreme Court temporarily derailed all retail licensing based on a finding that the CCB and OCM illegally gave preference to justice applicants over other social equity applicants, including disabled veterans and women and minority owned businesses.<\/p>\n

In yet another lawsuit, filed in March, a diverse coalition of interested stakeholders demanded that state regulators open up universal licenses to multistate operators that hold medical marijuana licenses in New York. That coalition includes Acreage Holdings, Curaleaf, Green Thumb Industries, and PharmaCann.<\/p>\n

Let\u2019s just say that lawyers representing New York State, CCB and OCM have a lot of work to do to save what\u2019s left of New York\u2019s entry into the recreational marijuana market.<\/p>\n

Court Reverses Itself And Shuts Down Any New Openings Of Dispensaries Pending Truthful Submission From Cannabis Control Board<\/p>\n

September 1, 2023 \u2013 It seems like only last week (that\u2019s because it was last week) that State Supreme Court Justice Kevin Bryant green-lit twenty-three dispensaries that were purportedly fully approved and ready-to-go to open, while holding off on seven others for further investigation.<\/p>\n

Bryant made that ruling, based on the belief that the Cannabis Control Board (CCB) had accurately submitted the names of those entities that were ready-to-go. Turns out that the CCB\u2019s most recent affidavit in the case admitted that \u201cnot all thirty applicants have met all licensing requirement\u201d despite Justice Bryant\u2019s clear instruction that only those licensees that \u201cmet all of the requirements for licensing, including but not limited to site plan approval from the CCB and where applicable\u00a0 from local municipalities\u201d be submitted.<\/p>\n

Something must have gotten lost in the translation, because despite further submissions by the CCB, Justice Bryant said that the additional information \u201cstill does not provide the clarity that is necessary for this Court to determine whether-or-not a particular licensee should be exempt.\u201d<\/p>\n

Bryant described the submission under oath by the CCB as containing \u201ccontradictory and confusing assertions that leave significant\u00a0 questions as to whether the licensees on the list have actually me all requirement.\u201d What was not clear to the Court was whether any of the thirty identified licensees are actually fully approved and compliant with the Court\u2019s order.<\/p>\n

Based on clear frustration with the CCB\u2019s submissions, Bryant re-imposed the preliminary injunction against all licensees and granted no exemptions \u2014 meaning no licensee may open\u00a0until\u00a0the CCB provides clear and unambiguous information regarding full approval, including site plan approval.<\/p>\n

Needless to say, the licensees are in a twist. Many have made their own submissions to the Court to identify the hardships they face from the delays. Plaintiffs in the case \u2014 the four disabled veterans who have been denied access to license applications \u2014 objected to the individual submissions as unnecessary, encompassed by CCB\u2019s submissions, and a potential cause of unnecessarily complicating\u00a0the litigation.<\/p>\n

Justice Bryant was as clear as he could be in his earlier ruling: the CCB\u00a0illegally preferred \u201cjustice\u201d candidates over the clear language in the enabling law which clearly required opening licensing opportunities to all social equity applicants at the same time, including disabled veterans, and women- and minority-owned businesses.<\/p>\n

Another hearing is set for September 15th.<\/p>\n

Court Allows 23 New Retail Licensees To Open; Holds Off On Seven Contested Applications; Halts Hundreds Of Pending Applications.<\/p>\n

August 28, 2023 \u2013 State Supreme Court Justice Kevin Bryant is unambiguous about his ruling \u2014 New York State illegally preferred \u201cjustice\u201d candidates over the clear language in the enabling law which clearly required opening licensing opportunities to all social equity applicants at the same time, including disabled veterans, and women- and minority-owned businesses.<\/p>\n

In fact, Justice Bryant basically felt the entire licensing process used by CCB\/OCM was flawed as the state legislature\u00a0never actually created the Conditional Adult Use Recreational Dispensary (CAURD) category. It was a creation of CCB\/OCM. The state did approve conditional licenses for growers and processors, but opted not to create a conditional dispensary license. This was essentially an \u201coverreach\u201d and an illegal \u201ccreation:of the CCB\/OCM.<\/p>\n

Despite these flaws, Bryant recognized that disrupting\u00a0the entire licensing system and invalidating the existing licenses was a bridge too far. And, despite these clear breaches of the law, Bryant allowed the CCB\/OCM to submit the names of applicants who had essentially met all of the requirements of licensing as of August 7th, including site plan approval from the CCB and zoning\/planning approval from the relevant municipalities. CCB\/OCM submitted 30 names of applicants it deemed having met those requirement.<\/p>\n

Of those 30, only seven were challenged \u2014 mostly delivery-only locations and one where it was unclear it the site selected was suitable \u2014 allowing 23 new licensees to move forward and open. The Court will review the seven challenged applicants and likely make a decision soon about their status soon.<\/p>\n

The 30 licensees submitted to the Court were:
<\/p>\n

Another hearing is set for September 15th.<\/p>\n

New York\u2019s First Round Of Approved Cannabis Growers\u2019 Showcases<\/p>\n

August 21, 2023 \u2013 New York State has approved several Growers\u2019 Showcases to help ease the accumulation of inventory for growers with limited venues for selling, and to give licensed retailers a financial boost.<\/p>\n

<\/a>
New York State is the first in the nation to allow the sale of cannabis at state and locally sanctioned locations. Learn more about the program\u00a0here<\/a>.<\/p>\n

Judge Extends Temporary Marijuana Licensing Shutdown For Two More Weeks<\/p>\n

August 11, 2023 \u2013 As it stands, drug felons have a preference over disabled veterans in New York\u2019s nascent marijuana market. State Supreme Court Justice Kevin R. Bryant is considering leveling that playing field and extended a temporary injunction for an additional two weeks to allow the litigants to file legal briefs making their arguments or sort out a settlement.<\/p>\n

On one side, the Office of Cannabis Management believes it is applying the intended concepts of social equity by opening conditional retail licensing first to individuals who have run afoul of the drug laws (or members of their immediate families). By giving them first dibs, OCM believes it is righting the wrongs of the past in overzealous policing and prosecution of the state\u2019s drug laws.<\/p>\n

On the other side, a group of four disabled veterans read the language of New York\u2019s Marijuana Regulation and Taxation Act\u2019s social equity provisions as putting them on the same ground as justice-affected applicants. They say the law does not give one \u201csocial equity\u201d group \u2013 justice affected individuals \u2014 a higher standing or preference over any other \u201csocial equity\u201d group, including disabled veterans.<\/p>\n

In a preliminary injunction issued last Monday, the Court agreed with the disabled veterans.<\/p>\n

The temporary order stopped all applications from being processed and put on hold all new retailers that have not yet opened their doors. On Friday, at a hearing in Kingston, Justice Bryant extended his order for two more weeks.<\/p>\n

According to papers filed in the case, marijuana retail license applications will open for all applicants on October 4th.<\/p>\n

A group of approved licensees also moved to intervene in the case, saying that even the two week extension may push them into bankruptcy.<\/p>\n

OCM has settled litigation in the past rather than have a court rule against it. In April, OCM settled with an out-of-state applicant who claimed that New York\u2019s program illegally favored in-state applicants over out-of-state applicants in contravention of the U.S. Constitution\u2019s Commerce Clause.<\/p>\n

That case, filed in federal court in the Northern District of New York late last year, disrupted license applications in much of the state until the Second Circuit Court of Appeals modified the injunction, and limited it to the one region where the out-of-state applicant may have qualified for licensure. Shortly thereafter, OCM settled with the out-of-state applicant, promising him first crack at a non-conditional license in the Finger Lakes region.<\/p>\n

To show support for OCM, dozens of conditional use applicants and licensees gathered outside the Ulster County Courthouse on Friday, only to have their hopes dashed as the Court extended its temporary order for an additional two weeks.<\/p>\n

All bets are on a settlement, as OCM gets ready to open applications to more groups this fall.<\/p>\n

\u00a0<\/p>\n

Military Vets Secure Temporary Restraining Order Against NYS \u2014 Blocking New Cannabis Licenses<\/p>\n

August 8, 2023 \u2013 Four military veterans secured a temporary restraining order against New York State, blocking the Office of Cannabis Management from issuing new cannabis licenses.<\/p>\n

The veterans claimed they were unable to secure retail licenses because the State illegally favored \u201cjustice involved\u201d applicants over others. A similar suit was filed in March by Coalition for Access to Regulated & Safe Cannabis.<\/p>\n

The veterans charged that cannabis regulators committed \u201cunconstitutional overreach\u201d when it created a system awarding licenses that gave priority to applicants with prior marijuana convictions and their immediate family members.<\/p>\n

The restraining order was signed Monday by Supreme Court Justice Kevin Bryant, halting new licenses pending a hearing set for Friday morning in Kingston. The Cannabis Control Board is not meeting again until September. New licenses are generally issued at public meetings.<\/p>\n

The order prohibits regulators from \u201cprocessing\u201d or \u201cconferring operational approval\u201d of pending licenses. It specifically blocks regulators from issuing new licenses and from allowing approved operators that have not yet opened their doors from opening dispensaries.<\/p>\n

Justice Bryant ruled that the restraining order was necessary because \u201cthere is genuine urgency and that immediate and irreparable injury, loss, or damage will result\u201d if the licensing program moves forward.<\/p>\n

Although the 2021 licensing law defines, \u201csocial and economic equity applicants\u201d as people from communities disproportionately impacted by cannabis enforcement, minority-owned businesses, women-owned businesses and service-disabled veterans,\u00a0OCM has only addressed those impacted by cannabis enforcement \u2014 closing the door on other applicants similarly eligible to apply and receive licenses. In other words, the legislature did not specify that \u201cjustice involved\u201d applicants should get priority over service-disabled veterans and women or minority owned businesses.<\/p>\n

The petition filed in state Supreme Court in Albany last week accuses officials of changing the rules established by the Legislature that required \u201cthe initial adult-use cannabis retail dispensary license application period shall be opened for all applicants at the same time.\u201d<\/p>\n

The four veteran plaintiffs charged that the Office of Cannabis Management failed to follow New York\u2019s Marijuana Regulation and Taxation Act (MRTA), in part by not issuing licenses to disabled service veterans and other minority groups.<\/p>\n

463 conditional retail licenses were issued to applicants with prior cannabis convictions. A few non-profit agencies have also received approvals to open dispensaries.<\/p>\n

\u201cIt\u2019s out of character for a veteran to sue the state to uphold a law,\u201d William Norgard, a U.S. Army veteran and one of the plaintiffs, said in a statement issued by a public relations firm announcing the lawsuit. \u201cWe take oaths to defend the laws of our nation, and trust \u2014 maybe naively \u2014 that government officials will faithfully and legally execute those laws. What the Office of Cannabis Management is doing right now is in complete breach of that trust. As veterans, we know that someone has to hold the line.\u201d<\/p>\n

The marijuana enabling legislations set a goal of awarding 50 percent of all retail marijuana retail licenses to social and economic equity applicants, which regulators read gave them the authority to give priority those with cannabis convictions or their family members.<\/p>\n

The Office of Cannabis Management does not comment on pending litigation.<\/p>\n

Guidance Issued For Cannabis Growers\u2019 Showcases<\/p>\n

August 1, 2023 \u2013 According to the CCB, a Cannabis Growers Showcase or CGS means a temporary event approved by the Office authorizing AUCC and AUCP licensees to showcase cannabis products which shall be sold by CAURD licensees to customers. The \u201cguidance\u201d was published on July 20, 2023.<\/p>\n

A Conditional Adult-Use Retail Dispensary (CAURD) licensee or an Adult-Use Conditional Cultivator (AUCC) licensee may apply to be a Cannabis Grower Showcase Organizer (CGSO) for a Cannabis Grower Showcase or \u201cCGS\u201d, granting them authorization for temporary retail sales at an approved location.<\/p>\n

The guidance is extremely detailed and complex, and seems to undermine the intent of the program\u00a0 \u2014 to provide outlets for unsold cannabis products, to connect growers and retailers, and to provide additional outlets for retaiil sales to blunt the prevalence of illegal sellers offering substandard product.<\/p>\n

To be eligible, the CGSO\u00a0must partner with at least three (3) or more cultivators and a licensed dispensary. The CGS Vendor will be authorized to sell cannabis products, produced, and distributed by the participating AUCCs, to customers. For every three (3) AUCCs participating,\u00a0one (1) Adult-Use Conditional Processor (AUCP) may participate. For every three (3) AUCCs participants beyond the first three (3), an additional CAURD may participate as an additional CGS Vendor. At least one (1) of the participating AUCCs must be someone the CAURD does not currently carry in their storefront or delivery only inventory.<\/p>\n

All participating CGS Vendors must be CAURD licensees with final retail authorizations, including those who have been approved to operate temporary delivery only locations and have received a license certificate from the Office of Cannabis Management and adult-use cannabis tax registration from the Department of Taxation and Finance. In\u00a0other words, unless you are an approved licensee with\u00a0an approved and operating retail location, you can\u2019t participate.<\/p>\n

And, all Cannabis Growers Showcase Organizers must submit a letter of approval signed by an official or representative from an administrative body responsible for event permitting in the city, town, or village where the CGS is to take place on official letterhead, that states the location, days, and times at which cannabis products are being offered for sale or sold. Cannabis Growers Showcases\u00a0may only be held on premises in municipalities that have not opted-out of allowing cannabis retail dispensaries\u00a0to operate within their jurisdiction pursuant to Section 131 of the Cannabis Law. A list of municipalities that have opt-ed out of retail dispensaries is available on the Office\u2019s website:\u00a0https:\/\/cannabis.ny.gov\/local-government<\/a>.<\/p>\n

Authorized inventory for retail sale at a CGS include:
\u2022 cannabis products;
\u2022 cannabinoid hemp products (only if granted a Cannabinoid Hemp Temporary Retail Permit by the Office to sell hemp);
\u2022 cannabis paraphernalia;
\u2022 merchandise including stationary, gifts, and other minor incidentals;
\u2022 branded merchandise and apparel containing the licensee\u2019s brand, including jewelry and accessories (in adult sizes only); and
\u2022 other items as approved by the OCM.<\/p>\n

No samples of cannabis products are allowed to be offered at a CGS.<\/p>\n

To view the complete guidance,\u00a0click here.<\/a>..<\/p>\n

Plans For Growers Showcase Events At Concerts, Fairs And Festivals Moves Forward<\/p>\n

July 23, 2023 \u2013 New York\u2019s Cannabis Control Board approved a measure last week that would allow, though only temporarily, the sale of cannabis products at \u201cgrowers showcase\u201d events.<\/p>\n

The Cannabis Control Board approved the so-called \u201cCannabis Grower Showcase Initiative,\u201d allowing farmers to partner with licensed retailers to sell pot at events, including farmer\u2019s markets.<\/p>\n

\u201cShowcase\u201d sales can occur at concerts, fairs and festivals, though no actual regulations governing this new sales vehicle have been proffered or developed. Experience with the Board dictates that regulations may still be a far-away occurrence, if past practices equal prologue.<\/p>\n

The plan is intended to help New York growers who have had to warehouse the hundreds of thousands of pounds of marijuana cultivated last year with few places to sell legally. The state\u2019s slow roll out of retail sales has put dire financial strain on many growers.<\/p>\n

Early discussions indicate that each event would require the sale of product from at least three cultivators and one retail licensee to qualify. Sales would only be permitted in venues in municipalities that allow cannabis retailing, and within those municipalities, local zoning may limit the availability of venues. Also, the venues cannot be at places where \u201cit can reasonably be expected that the primary audience is going to be underage,\u201d state Director of Cannabis Policy John Kagia said.<\/p>\n

For example, while a farmers\u2019 market may be a \u201cshowcase\u201d venue, it can only happen if the location of the farmers\u2019 market was\u00a0zoned for retail cannabis sales.<\/p>\n

The state\u2019s commitment to \u201cshowcase\u201d sales is difficult to gauge, as the agency has flip-flopped on allowing the sales of product outside its licensed retail locations.<\/p>\n

The Cannabis Association of New York issued a statement Wednesday cautiously commending the board for approving the measure. \u201cThis is an initiative we have supported with thoughtful and evidence-based recommendations to the Office of Cannabis Management,\u201d CANY said in its statement.<\/p>\n

\u201cBut now, as with any new program, the devil is in the details. We await the details of the \u2018grower\u2019s showcase\u2019 and look to see how the OCM will put this into practice.\u201d<\/p>\n

212 New Conditional Adult Use Retail License Issued Statewide; 18 More In Mid-Hudson Region<\/p>\n

The Cannabis Control Board voted Wednesday to approve 212 additional CAURD retail licenses.<\/p>\n

Licenses were awarded to 46 applicants in Manhattan, 44 in Brooklyn, 28 in the Capital Region, 24 on Long Island,\u00a018 in the Mid-Hudson region, 14 in Queens, nine each in the Finger Lakes, Western New York and the Bronx, five in Richmond, four in the Southern Tier and one each in Central New York and the Mohawk Valley.<\/p>\n

The eighteen new licensees in the Mid-Hudson are:<\/p>\n

<\/p>\n

It marks another, but unexpected, expansion of the state\u2019s Conditional Adult-Use Retail Dispensary license program, which prioritizes applicants with a cannabis conviction under former drug laws or people who have a family member with a previous conviction.<\/p>\n

\u201cThis expansion is necessary to help prepare New York\u2019s market for the next phase of adult-use cannabis,\u201d Office of Cannabis Management Executive Director\u00a0Chris Alexander said at Wednesday\u2019s meeting. \u201cThe decision to further expand the CAURD program will help ensure the retail market is robust enough to sell the cannabis grown by New York farmers and accelerate the transition of New York consumers from the illicit to the legal market.\u201d<\/p>\n

Licensees must still secure retail locations and submit plans for approval to OCM.<\/p>\n

The board has awarded 463 conditional adult-use licenses to date, though the program, expanded several times since inception, was initially intended for 150 licenses.<\/p>\n

\u201cThe provisional approval of today\u2019s 212 CAURD licenses by the Cannabis Control Board marks a momentous leap forward in our pursuit of an inclusive and fair cannabis industry,\u201d Cannabis Control Board chair Tremaine Wright said in a statement Wednesday. \u201cThese licensees are demonstrative of the innovation and diversity of New York state.\u201d<\/p>\n

Of the 463 licenses, only 20 legal dispensaries are open across New York.<\/p>\n

The board will approve one more tranche of CAURD applications in the coming months, with additional applications opening outside the social equity program this fall.<\/p>\n

For a complete list of new licensees, sorted by region,\u00a0click here.<\/a><\/p>\n

Two More Licensed Adult-Use Cannabis Retailers Open<\/p>\n

June 19, 2023 \u2013 Marijuana Monday welcomes the Flynnstoned Cannabis Company, 219 Walton St Syracuse, NY 13202, (315) 299-9334; License Number: OCM-CAURD-23-000010<\/p>\n

Hours: \u00a0Sunday, 10:00am-8:00pm; Monday through Thursday, 10:000am-9:00pm, Friday-Saturday, 10:00am-10:00pm;\u00a0Website:flynnstoned.com<\/a><\/p>\n

\"\"<\/p>\n

Also, and a bit closer to home, welcome to Sesh, NYC, a delivery only location. No in-person sales are allowed at this location.\u00a0 According to its website, Sesh serves customers in the Bronx, lower Westchester, and upper Manhattan. License: OCM-AURC-TD-P23017; Website: myseshnyc.com<\/a><\/p>\n

With the opening of these locations, there are now 15 licensed retailers across New York State. For a complete list, click here<\/a>.<\/p>\n

New York\u2019s Cannabis Control Board Approved 34 Additional CAURD Licenses Thursday<\/p>\n

Seven licenses were approved for the Finger Lakes region \u2013 the last region to receive approvals after litigation holding up the issuance of licenses there was resolved.<\/p>\n

In addition to the seven Finger Lakes licenses, licenses were also awarded as follows: Bronx (2), Brooklyn (7), Central New York (2), Manhattan (2), Mid-Hudson (10) and Queens (4).<\/p>\n

The provisional licensees are now able to submit final application materials to the state, enabling them to receive final licensure and open their retail dispensaries.<\/p>\n

Currently there are 15 open cannabis retailers statewide and over 40 in development. Over 250 licenses have been approved across the state, with 21 percent of New Yorkers now living in a city with legal cannabis access.<\/p>\n

OCM also reported that New York legal cannabis sales so far this year total $22.6 million.<\/p>\n

At the meeting, growers continue to express frustration over the slow speed of the industry roll-out, saying the lack of sales outlets are causing financial hardship and endangering their continued participation.<\/p>\n

Efforts to Close Down The Illicit Retail Market Gain Traction \u2013 Enforcement Outside NYC Started Last Week<\/p>\n

The Office of Cannabis Management and the Department of Taxation and Finance began their first joint inspections authorized by new enforcement laws the week of June 5, 2023, in New York City, where inspections will remain active and ongoing. The two agencies inspected 11 shops in Manhattan last week.<\/p>\n

All of the shops inspected in New York City last week were selling cannabis without a license and were issued Notices of Violation and Orders to Cease Unlicensed Activity.<\/p>\n

The following shops were inspected last week:<\/p>\n

Varieties on Broadway \u2013 736 Broadway
\nRoll 2 Nation \u2013 738 Broadway
\nBaby Jeeter \u2013 793 Broadway
\nMaze \u2013 16 St. Marks Place
\nLaGuardia Smoke \u2013 510 LaGuardia Place
\nNomad \u2013 59 West 30th Street
\nPlay lane \u2013 117B W 23rd Street
\nCannabis Culture \u2013 403 8th Avenue
\nSmoke Factory \u2013 287 7th Avenue
\nGo Green Dispensary \u2013 603 6th Avenue
\nDaydream \u2013 1181 Broadway<\/p>\n

\u201cWe continue to take action against bad actors who seek to skirt around our laws,\u201d Governor Hochul said. \u201cUnlicensed dispensaries violate our laws, put public health at risk, and undermine the legal cannabis market, and we will continue to take these critical enforcement measures to protect New Yorkers from illicit, unregulated sales.\u201d<\/p>\n

On May 3, 2023, Governor Hochul signed legislation enabling for the enhanced, statewide enforcement by OCM on unlicensed cannabis businesses. The legislation now enables OCM to also assess civil penalties against unlicensed cannabis businesses, with fines of up to $20,000 a day for the most egregious conduct, and starts the process of potential closure of a retail location selling cannabis without a license among other penalties.<\/p>\n

The new law also makes it a state crime to sell cannabis and cannabis products without a license.<\/p>\n

Inspections also took place at storefront businesses not licensed to sell cannabis in Ithaca and Binghamton.<\/p>\n

The following shops were inspected in Ithaca:<\/p>\n

Black Leaf \u2014 103 East State Street, Ithaca, NY
\nZaza Convenience \u2014 101 East State Street, Ithaca, NY
\nThe Rezz \u2014 312 Fourth St, Ithaca, NY<\/p>\n

The following shops were inspected in Binghamton:<\/p>\n

Green Magic \u2013 144 Henry St
\nTakeoff 2 \u2013 63 Chenango St<\/p>\n

Governor Hochul Unveils New Statewide Cannabis Public Education Campaign<\/p>\n

\u201cWhy Buy Legal New York\u201d Will Encourage New Yorkers to Purchase Safer, Regulated Cannabis Products from Licensed Dispensaries<\/p>\n

April 22, 2023 \u2013 Governor Kathy Hochul announced the launch of \u201cWhy Buy Legal New York\u201d, a public education campaign promoting safer, informed, legal purchases of cannabis from licensed dispensaries in New York State.<\/p>\n

The campaign focuses on three key pillars: protecting public health and promoting social equity and community reinvestment. Governor Hochul made the announcement alongside the New York State Office of Cannabis Management at CUNY Law School in New York City. The \u201cWhy Buy Legal New York\u201d announcements explain and emphasize the potential health risks associated with purchasing cannabis products from unlicensed businesses and why regulated cannabis products are safer. It also outlines how buying legal supports the advancement of New York\u2019s social and economic equity goals for communities across the State.<\/p>\n

\u201cTo bolster the public health and safety of all New Yorkers, we are providing them with information they need to make informed decisions and enjoy cannabis responsibly,\u201d Governor Hochul said. \u201cAs we continue to build a healthier and more equitable cannabis market, I am proud to launch this important public education campaign to promote safer, legal purchases of cannabis from licensed dispensaries throughout our state.\u201d<\/p>\n

The primarily digital campaign will target cannabis consumers 21 years old and over and includes various educational materials, such as \u201cThe Guide to Safer Cannabis Consumption\u201d. These materials will provide information on how to find legal dispensaries in New York and tips on how to consume cannabis safely. Materials are available at: https:\/\/cannabis.ny.gov\/consumers<\/a>.<\/p>\n

Section 280E Tax Relief Available To Cannabis Businesses In New York State; Federal Relief Proposed<\/p>\n

April 18, 2023 \u2013 Earl Blumenauer, a Congressman from Oregon, introduced a bill this week that would allow legal marijuana businesses to take tax deductions they have been historically denied, despite their availability to other legal businesses.<\/p>\n

The Small Business Tax Equity Act (H.R. 2643), would allow marijuana businesses operating in compliance with state laws to take business deductions associated with the sale of marijuana. Section 280E of the federal tax code currently prevents cannabis businesses from deducting ordinary expenses associated with running a small business, including rent, utilities, and payroll.<\/p>\n

Legally operating marijuana businesses cannot claim the Work Opportunity Tax Credit when they hire veterans, cannot depreciate American-made irrigation equipment, and cannot take any credit or deduction relating to construction or operation costs to revitalize or restore a building.<\/p>\n

\u201cState-legal cannabis businesses are denied equal treatment under 280E. They cannot fully deduct the cost of doing business, which means they pay two or three times as much as a similar non-cannabis business,\u201d\u202fsaid Blumenauer, founder and co-chair of the Congressional Cannabis Caucus.\u202f\u201cThis grotesquely unfair treatment incentivizes people to cut corners. If Congress wants to get serious about supporting small businesses and ending the illicit cannabis market, it is commonsense that we allow legal cannabis operations to deduct business expenses, just like any other industry.\u201d<\/p>\n

Even if passage of federal legislation is an uphill climb, New York State has taken steps to decouple state taxation from federal returns.<\/p>\n

A law contained in New York State\u2019s Budget carved out an exemption from IRC Section 280E. This exemption allows NYS-licensed cannabis businesses to take tax deductions for business expenses and claim credits at the state level that they are barred from utilizing on their federal returns.<\/p>\n

By decoupling the state tax code from the federal law for purposes of 280E, New York-licensed cannabis businesses would see significant tax savings beginning in tax year 2023.<\/p>\n

Many states simply mirror federal tax policy in their own tax codes. Because of this, the federal tax code\u2019s restrictions on cannabis businesses also blocks state-level deductions unless a state acts to exempt these businesses from these restrictions.<\/p>\n

Because of the connection to federal returns, it is estimated that many cannabis businesses pay effective tax rates of up to 80%. To help resolve the issue, New York has joined California, Colorado, Oregon, Massachusetts, and other states to provide relief. Nineteen states have decoupled state returns from federal returns.<\/p>\n

A bill pending in Connecticut would similarly decouple state and federal tax returns. When neighboring states have different tax structures, competition suffers.<\/p>\n

Forcing a business operation to pay taxes on gross revenue, where it cannot deduct payroll, rent, utilities and other expenses is a recipe for near-certain economic failure, and encourages the continued proliferation of the illicit marijuana trade.<\/p>\n

A Tangle of Lawsuits Is Crippling New York\u2019s Entry Into Legalized Cannabis Sales<\/p>\n

March 29, 2023 \u2013 Let\u2019s face it. New York\u2019s legalization and launch of licensed cannabis retailers has been less than perfect. Okay, it\u2019s been a disaster. To date, there are only a handful (less than five) retail cannabis operations open, and those are only open conditionally.<\/p>\n

Illicit sellers and retailers abound, offering marginal product, paying no taxes, and unafraid of State or local law enforcement.<\/p>\n

The preference given to those with prior involvement with cannabis-related offenses has closed the market to the thousands of other operators vying to open up shop. The system of in-state preferences has basically shut down the industry in the Hudson Valley and other areas of the state, while a federal lawsuit grinds its way through courts that are part of a system that still holds cannabis to be illegal.<\/p>\n

What\u2019s to be done to jump-start the industry, or to keep it from collapsing under its own regulatory weight?<\/p>\n

A group of New York-affiliated medical cannabis operators filed a complaint against the state\u2019s regulators asking the Court\u00a0to open available licensing options to\u00a0all\u00a0retail dispensary applicants\u00a0\u2013 not just those with prior marijuana convictions. The Coalition for Access to Regulated & Safe Cannabis (which includes Acreage Holdings, PharmaCann, Green Thumb Industries, and Curaleaf, and several hopeful dispensary owners) filed suit against New York\u2019s Office of Cannabis Management (OCM) and the Cannabis Control Board (CCB), the two agencies charged with devising and implementing the state\u2019s cannabis legislation.<\/p>\n

The lawsuit filed in Albany County Supreme Court on March 16 alleges: (1) unconstitutional overreach and policymaking; (2) the abdication of the agencies\u2019 duties, and (3) negligent actions that needlessly put New Yorkers\u2019 health and safety at risk.<\/p>\n

Plaintiffs allege that defendants failed to fulfill the requirements of the Marijuana Regulation and Taxation Act (MRTA), the law that legalized cannabis in New York in March 2021. It\u2019s main argument though is that defendants failed to follow the law itself and provide all applicants with equal access to retail dispensary licenses. They say the entire Conditional Adult-Use Retail Dispensary (CAURD), which restricts eligibility to those with prior involvement in cannabis-related offenses, runs afoul of the law, and has no basis in statutes that established legalized cannabis.<\/p>\n

They argue that the agency had no right to limit access to dispensary licenses to a specific group of individuals, as opposed to providing equal access to all to available licenses.<\/p>\n

The list of failures continues: a delay of 20 months in proposing regulations for the marketplace, still unfinished; constant changing guidance for growers and processors; failures to realize promised state-subsidized real estate and loans; allowing the cultivation of large quantities of cannabis before establishing a retail infrastructure to sell it; and countless other incidents of mismanagement and incompetence.<\/p>\n

The complaint narrative blames the defendants through inaction of allowing the illicit market to thrive, not stopping tainted cannabis products from entering the illegal market, and depriving communities of essential tax revenue.<\/p>\n

The narrative also refers to a report (detailed earlier in this newsletter) commissioned by the New York Medical Cannabis Industry Association (NYMCIA) and others that highlighted that about 40% of marijuana products sold in New York\u2019s unlicensed businesses contain potentially harmful contaminants. And it blames the state for failing to shut down unlicensed operators while pointing out the folly of sending \u201ccease and desist letters\u201d to illegal sellers and the failures of law enforcement operations to impact the illegal markets. Estimates are that over 1,400 unlicensed businesses are operating throughout the state, resulting in the likely loss of around $2.6 billion in tax revenue over the next seven years.<\/p>\n

Plaintiffs (in a blend of an Article 78 and request for declaratory relief) have asked the court to declare OCM\u2019s CAURD license unconstitutional and outside the agency\u2019s legal authority. It asks the Court to require regulators to take legal action against all illegal cannabis stores. And most important to their interests: to open the licensing process for adult-use retail dispensaries to all applicants now, including registered organizations and those who qualify under the MRTA\u2019s social and economic equity provisions.<\/p>\n

Second Circuit Court of Appeals Modifies Injunction, Clearing The Path To Issuance of Dispensary Licenses in Hudson Valley<\/p>\n

Finger Lakes Remains Under Injunction; Only A Handful of Rockland County\u2019s Villages Opted In For Retail Licenses<\/p>\n

March 29, 2023 \u2013 In a one-paragraph Order, issued late Tuesday afternoon, the Second Circuit Court of Appeals cleared the path for the New York State Office of Cannabis Management (OCM) to issue retail cannabis dispensary licenses in the Hudson Valley, Brooklyn, Central and Western New York. The Circuit Court left in place a ban on the issuance of licenses in the Finger Lakes but set an expedited briefing schedule to address issues affecting that region.<\/p>\n

The ban arose last November, when a District Court Judge in the Northern District of New York entered a sweeping order halting OCM\u2019s ability to issue retail licenses in the Hudson Valley and other areas. An out-of-state applicant for dispensary licenses claimed his company was discriminated against based on a system of preferences favoring in-state applicants.<\/p>\n

The plaintiff, Variscite NY One, Inc. of Michigan, convinced Judge Gary Sharpe that the system New York used to award licenses violated the Commerce Clause of the US Constitution. The Commerce Clause generally prohibits a state from favoring its own residents over out-of-state applicants in commercial matters.<\/p>\n

Judge Sharpe halted the issuance of licenses in every region where Variscite sought one, including the Hudson Valley.<\/p>\n

OCM\u2019s efforts to lift the injunction or at least modify it at the District Court level went nowhere. OCM was also denied a stay from the District Court pending appeal.<\/p>\n

In seeking to modify the injunction, or limit its application in the District Court, OCM argued that no applicant could have obtained a retail dispensary license in more than one area of the state because the number of applicants in each area precluded any applicant from securing a second regional license. It also argued that even if Variscite had received full credit for in-state residency, it would not have otherwise scored high enough to secure a retail dispensary license.<\/p>\n

OCM appealed to the Second Circuit and sought again to have the injunction lifted or modified. Its arguments resulted in a partial victory yesterday, clearing the path for issuance of licenses in every area except for the Finger Lakes \u2013 Variscite\u2019s first preference for licensure.<\/p>\n

The Second Circuit entered an order late Tuesday afternoon saying, \u201cThe district court\u2019s injunction is modified so that it bars the issuance of conditional adult-use retail cannabis dispensary licenses only in the Finger Lakes region.\u201d<\/p>\n

\"cannabis\"The NYS Office of Cannabis Management tweeted that, \u201cWe are excited to begin advancing licenses to these regions shortly.\u201d<\/p>\n

\u201cNew York\u2019s brand-new cannabis industry is making significant progress to promote social equity and right the wrongs of the past, creating the fairest and safest market in the nation,\u201d New York Gov. Kathy Hochul said in a prepared statement. \u201cThis decision will allow New York\u2019s social equity entrepreneurs to open safe, regulated cannabis dispensaries in Central New York, Western New York, the Mid-Hudson Region and Brooklyn. For the first time, New Yorkers in nearly every region of the state will have access to safer, high-quality, adult-use cannabis products. I am committed to ensuring New York continues to lead the nation in our safe and equitable approach to the cannabis market.\u201d<\/p>\n

The temporary injunction against OCM prevented the issuance of 18 licenses, six of which would have allowed retailers to operate in the Mid-Hudson Region. The identities of the six Mid-Hudson retailers are being withheld pending a formal announcement.<\/p>\n

Earlier this month, OCM announced its intent to issue an additional 150 retail dispensary licenses on top of the 150 previously authorized.<\/p>\n

According to a database compiled by Office of Cannabis Management, in Rockland County, only the Villages of Haverstraw, Nyack, Piermont, Chestnut Ridge and Airmont have opted-in to allowing retail dispensaries in their municipal borders. These villages have opted-out of allowing on-site consumption lounges.<\/p>\n

Hudson Valley Retail Dispensary Licenses Could Issue Soon If Second Circuit Court of Appeals Lifts Injunction<\/p>\n

Argument is set for March 28th at the Second Circuit Court of Appeals in Manhattan<\/p>\n

March 20, 2023 \u2013 The Second Circuit Court of Appeals is being asked to stay the preliminary injunction issued by United States District Court (Northern District of New York). The injunction issued below barred the New York Office of Cannabis Management (OCM) from issuing any conditional adult-use retail dispensary (CAURD) licenses in the Finger Lakes, Central New York, Western New York, Mid-Hudson and Brooklyn regions during the pendency of the lawsuit.<\/p>\n

The injunction is why there are no retail dispensaries opened or licensed in the Hudson Valley. The plaintiff below (Variscite NY One, Inc.) convinced Judge Gary Sharpe that he was being discriminated against as an out-of-state applicant and that OCM was favoring in-state applicants in contravention of the Commerce Clause of the US Constitution. The Commerce Clause generally prohibits a state from favoring its own residents over out-of-state applicants in commercial matters.<\/p>\n

OCM\u2019s efforts to lift the injunction or at least modify it at the District Court level went nowhere. OCM was also denied a stay from the District Court pending appeal. Now, in the appellate case in the Second Circuit Court of Appeals, OCM is trying again to get a stay, or a modification of the injunction that would allow it to finally issue licenses in the affected areas.<\/p>\n

In its motion for a stay, OCM argues that Variscite met the \u201csignificant presence\u201d licensing requirement because it is incorporated in New York; therefore, the cannabis company is not being discriminated against. OCM also argues (as it did at the District Court)\u00a0 that Variscite\u2019s application did not otherwise score high enough to qualify for a license, essentially saying that he could not have secured a license even if he was given full in-state credit because of other factors in his application.<\/p>\n

OCM also argued:<\/p>\n

The residency requirements do not violate the Dormant Commerce Clause because they do not discriminate against out-of-state actors, and if the requirements do \u201cburden\u201d interstate commerce, that does not exceed the state\u2019s interest to rectify the harm caused by its historical marijuana laws and the selective enforcement of those laws.<\/p>\n

The state will suffer irreparable harm if the injunction is not lifted. \u201cThe preliminary injunction leaves the putative recipients of 54 dispensary licenses indefinitely unable to do business and threatens the economic stability of cannabis growers and manufacturers who will, as a result of the injunction, lack enough buyers for their goods.\u201d<\/p>\n

Variscite argued against lifting stay blocking New York from issuing the licenses, saying the state is aiming for a \u201cbackdoor dissolution\u201d of the injunction that would leave him without the possibility of a remedy.<\/p>\n

When New York legalized marijuana, it established residency requirements to curtail outside entities from entering and dominating a newly legalized state market from afar. Meanwhile, the law is very unsettled on residency requirements with many experts believing that until marijuana is legalized nationally, the Commerce Clause does not apply and cannot be violated because there is no legal interstate commerce of cannabis \u2013 a drug illegal under federal law.<\/p>\n

Courts don\u2019t regulate illegal markets.<\/p>\n

With a trial date in the District Court set for mid-2024, the uncertainty surrounding New York\u2019s cannabis market continues, further delaying the approval of 54 licenses in the five territories under injunction.<\/p>\n

Let\u2019s just say that the regulatory landscape for the cannabis industry is still very much unsettled.<\/p>\n

Women in New York Are Being Left Behind In Retail Dispensary Licensing<\/p>\n

March 13, 2023 \u2013 In two rounds of license awards, women won only seven percent of Conditional Adult-Use Retail Dispensary (CAURD) licenses in the first round and 14 percent in the second round.<\/p>\n

New York\u2019s social equity program was designed to grant CAURD licenses to qualified entrepreneurs who have either been convicted on a marijuana charge or who had an immediate family member similarly situated. The program was designed to mitigate decades of disproportionate drug enforcement, particularly in communities of color.<\/p>\n

To further make up for past harms, New York is also committing to startup funding and real estate assistance to licensees.<\/p>\n

So, why have women not fared well in the issuance of licenses? Is it because marijuana enforcement laws were disproportionately aimed at young men of color? \u00a0Statistics tell part of the story.<\/p>\n

Between 1997 and 2007, 91 percent of people arrested for marijuana possession in New York City were male, according to a report from the ACLU of New York. Of that male cohort, young Black and Latino men were overwhelmingly the prevalent demographic \u00a0in marijuana possession arrests during that time period.<\/p>\n

To open the door to more women, New York crafted its regulations to include immediate family members of convicted individuals in the qualifying pool of applicants.<\/p>\n

\u201cMy team early on made an effort to make sure that women have a pathway to get a CAURD license,\u201d said Damian Fagon, chief equity officer of the Office of Cannabis Management.<\/p>\n

Despite that effort, a review of the scoring, qualifying based on a conviction is weighted higher than one based on a family member, effectively building in a bias toward men.<\/p>\n

There have been calls for both more transparency and reconsideration in the application process \u2014 particularly when it comes to awarding points for the \u201cjustice-involved questions\u201d on the license application.<\/p>\n

The OCM does not make applications, the information contained therein, or its scoring results public when it comes to license awards, as public disclosure may advantage certain applicants who might shape their applications toward those categories weighted more heavily. Secrecy in the awarding of licenses is OCM\u2019s way.<\/p>\n

The built-in bias against women remains the norm, and no efforts are underway to re-tilt the tables. Preferences for distressed farmers and disabled veterans will also likely favor men as demographically men dominate those categories as well.<\/p>\n

The expansion from 150 to 300 licenses recently did improve the raw numbers for women, but women still remain grossly under-represented in the retail dispensary market.<\/p>\n

New York Expands Conditional Licenses to 300<\/p>\n

Applicants with a family history of marijuana convictions will soon be eligible to open dispensaries with conditional licenses.<\/p>\n

March 6, 2023 \u2013 Cannabis regulators will issue 300 retail shop licenses to applicants impacted by past marijuana convictions, expanding the original cohort from just 150 in the first round.<\/p>\n

\u201cAs we\u2019ve continued to review applications we found there\u2019s still many qualified individuals who can make the most of this opportunity outside of that initial 150,\u201d Chris Alexander, executive director of the Office of Cannabis Management, said at the most recent meeting of the Cannabis Control Board.<\/p>\n

There were originally about 900 applicants for conditional licenses, with 150 granted.<\/p>\n

Plans to provide the first 150 licensees with access to turnkey locations and loans from a state-initiated fund remain unchanged. Should any from the original 150 licensees decline the resources offered by the State, new applicants may become eligible for those same benefits.<\/p>\n

The actual increase in license opportunities will be in line with the original geographic awards, largely based on populations within the different established regions.<\/p>\n

Nothing in the issuance of new license opportunities affects the Hudson Valley. A federal court ruling from the Northern District of New York has kept licensing of shops on hold in five of New York\u2019s 14 regions: the Finger Lakes, central New York, western New York, Mid-Hudson and Brooklyn. The federal court injunction arose from an out-of-state challenge of the New York\u2019s policy prioritizing the awarding of licenses to in-state residents.<\/p>\n

Efforts to modify or lift the injunction fell on deaf ears in the District Court.\u00a0The decision is under appeal, but the process will leave these new potential licensees in the same limbo as the original cohort in the affected regions.<\/p>\n

What To Do With All That Weed?<\/p>\n

February 27, 2023 \u2013 In its first harvest, in what some would call an \u201cupstate cultivation boom\u201d 300,000 pounds of weed were produced, valued at three-quarters of a billion dollars.<\/p>\n

Here\u2019s just one example, Hudson Cannabis reports it has 2,700lb of harvest bud stacked in storage containers waiting to be certified by one of the five state-approved testing labs. At an approximate wholesale market value of $300 a pound, her inventory is valued at $800,000. That\u2019s today\u2019s value. By most estimates wholesale prices are likely to decrease based on oversupply. Hudson Cannabis is licensed to produce 43,000 sq ft of cannabis flower, 29,000 sq ft of which are grown outside.<\/p>\n

And, there are only a handful of state-licensed dispensaries with open doors and delivery services are nascent. So, what\u2019s going to become of all of that product. Lines at open dispensaries snake around the blocks where they are located \u2013 some with \u201cbouncers\u201d to moderate the crowd. How many new retailers are ready to open?<\/p>\n

So where will all of that product go? What about all of that tax revenue that the state touted?<\/p>\n

As of March 2022, weed-legal states reported a combined total of $11.2bn in tax revenue from legal, adult-use cannabis sales. By some estimates, the legal cannabis market could reach $66bn by 2025. What\u2019s up New York?<\/p>\n

What can be done to get the dispensaries open a bit faster?What about roadside \u201cpick-your-own\u201d at some farms to help out the cultivators and farmers that invested with the hope that a legal framework would provide them a return on their investments? And, how much product will have to be processed for its active ingredient or sold to edible-product producers, given the dearth of dispensary and delivery options? How much will end up untested and on the black market?<\/p>\n

New York\u2019s Office Of Cannabis Management Asks District Court To Modify Its Injunction And Allow Retail Cannabis Sales In Hudson Valley<\/p>\n

December 27, 2022 \u2013 An injunction entered against New York\u2019s Office of Cannabis Management (OCM) last month is preventing the issuance of any retail cannabis dispensary licenses in the Hudson Valley and four other regions in New York State. But a court filing by the OCM last week may clear the way for approved licensees in the Mid-Hudson region and three other blocked areas to open retail dispensaries.<\/p>\n

The case was originally filed by Variscite NY One, Inc., through Michigan-based Kenneth Gay, its 51 percent owner, who claimed that application requirements for retail dispensary licenses in New York violated the Commerce Clause of the U.S. Constitution because the law favored New York residents over out-of-state applicants. The Commerce Clause generally prevents a state from favoring its own residents over out-of-staters in commercial matters.<\/p>\n

Variscite had filed an application listing five areas where it sought a retail license, including its first preference, the Finger Lakes, as well as Central New York, Western New York, the Mid-Hudson Region, and Brooklyn. New York is divided into fourteen different geographic zones for retail licensing. Based on the information available to the Court at the time, it agreed with Variscite and issued an order granting Variscite temporary relief, which has prevented OCM from issuing licenses in the five regions.<\/p>\n

OCM in its recent filing is attempting to show the court that only licenses in the Finger Lakes region should be at issue, while the other regions shouldn\u2019t be affected because of the way the New York law is written. The law says an applicant can only get its first choice of region when there are an insufficient number of applications for its second and later choices. At best, Variscite would only be eligible for a license in the Finger Lakes region, according to the filing.<\/p>\n

In its request to modify the injunction, OCM stated that approved retailers, processors and cultivators in the Hudson Valley (and the other affected regions) would be irreparably harmed if the Court did not narrow the injunction to the one area where the Petitioner may have be eligible for a retail dispensary license.<\/p>\n

OCM also states in its affidavit that Variscite would not have even qualified for a license in the Finger Lakes region because it did not score high enough on the qualifying application to have been selected.<\/p>\n

OCM also told the Court that the injunction affects the economics of \u201c54 potential retail dispensaries, 121 licensed cultivators, and 16 processors,\u201d many of whom have invested millions of dollars in their operations relying on OCM\u2019s licensing regulations. What the defendant is saying is that if the retailers can\u2019t get up and running, then the entire eco-system of the cannabis market will be disrupted.<\/p>\n

The OCM received more than 900 applications for Conditional Adult Use Retail Dispensary (CAURD) licenses. The Board recently approved 36 provisional licensees, including 28 qualifying individuals, and eight nonprofit CAURD applicants outside the five areas included in the lawsuit. The temporary injunction against OCM prevented the issuance of an additional 18 licenses, six of which would have allowed retailers to operate in the Mid-Hudson Region. The identities of the six Mid-Hudson retailers are being withheld pending the outcome of the litigation.<\/p>\n

Per the law, up to 175 licenses will be granted; roughly 150 may be granted to individual applicants, and about 25 to nonprofit applicants. It it expected that there will be 17 Mid-Hudson licenses approved.<\/p>\n

In addition to asking to modify the injunction, OCM has also filed an appeal, a request to the court to delay enforcement of its order, and a motion to dismiss Variscite\u2019s complaint.<\/p>\n

Variscite filed a similar case in California, also claiming a violation of the Commerce Clause, but earlier this month the District Court in California dismissed the complaint, finding Variscite lacked standing to pursue its case. The court in denying Variscite\u2019s claims also questioned if the Commerce Clause even \u201capplies to federally illegal cannabis markets.\u201d<\/p>\n

It remains uncertain as to whether Commerce Clause violations are applicable to markets and products that are still illegal under federal law. Marijuana is a Schedule I substance under the Controlled Substances Act.<\/p>\n

The case number in New York\u2019s Northern District is: 1:22-cv-01013-GLS-DJS.<\/p>\n

How Do You Know If Your Cannabis Retailer Is Legitimate (Licensed)?<\/p>\n

\"CannabisDecember 16, 2022 \u2013 We recently reported on the dangers of purchasing adulterated cannabis from unlicensed retailers in New York City. But, how does a consumer know if their retail outlet is actually licensed by New York State? State officials are taking steps to steer consumers to licensed retailers. With the first round of retailers ready to open their doors, the OCM unveiled a state-sanctioned icon and scannable QR Code that will be posted in the window of every licensed storefront in the state. Purchasers who buy from unlicensed retailers deprive the state of tax money and may take their health into their own hands.<\/p>\n

\u201cIt is critical that consumers know and trust that the new, legal cannabis market offers tested products and follows protocols designed to protect public health,\u201d said Tremaine Wright, chair of the Cannabis Control Board.<\/p>\n

The state is also planning a marketing program called \u201cWhy Buy Legal New York\u201d that\u2019s set to launch in 2023. Other efforts to crack down on illegal sales are also in the works to shut down illegal storefronts and trucks selling illicit and often tainted marijuana and cannabis products.<\/p>\n

Home Delivery? Really?<\/p>\n

December 9, 2022 \u2013 In an effort to assist a fledgling cannabis market and enable retailers who have yet to open their doors distribute their products, the Office of Cannabis Management has issued delivery guidelines that allow for home delivery of cannabis products. The new regulations will allow:<\/p>\n

Retail licenses to secure a warehouse from which to fulfill delivery orders while building permanent dispensary locations for up to one year;
\nCustomers to place online and phone only; no in-person sales or pick-up from the warehouse location;
\nCustomers must pre-pay; no cash payments from cannabis consumer to delivery employee permitted;
\nDeliveries can be made by bicycles, scooters, motor vehicles;
\nConsumers must be at least 21-years-old with valid identification upon sale and delivery;
\nBusinesses can have up to 25 delivery staff per business, as dictated by New York state cannabis law.<\/p>\n

One reason for the rush to home delivery is likely the enormous backlog of warehoused product from the first growing and processing season. Hundreds of millions of dollars worth of cannabis grown in the state remains warehoused, for want of sales outlets. A report by Bloomberg estimates the value of the 300,000 pounds of warehoused cannabis to be in excess of $750 million dollars.<\/p>\n

OCM Asks District Court Judge To Modify Injunction And Allow Sales In Enjoined Areas, Including Hudson Valley<\/p>\n

December 12, 2022 \u2013 In a recent court filing in the Northern District of New York, the OCM has asked the Court to modify its injunction against issuing adult retail dispensary licenses in Central New York, Western New York, the Mid-Hudson Region and Brooklyn. In support of its motion, OCM relies on the fact that a petitioner\/licensee, Variscite NY One, Inc., could have only received a license in its \u201cfirst\u201d choice area because there were more than the requisite number of applicants in the other areas. Under the rules established by the OCM, licenses would only be issued in 2nd or later choices if there was an inadequate number of applicants in the other areas.<\/p>\n

As it relates to the Mid-Hudson region, OCM reports that it received 75 applications for 17 available licenses, and that approved retailers, processors and cultivators in the Hudson Valley (and the other affected regions) may be irreparably harmed if the Court does not narrow the injunction to the one area where the Petitioner may have be eligible for a retail dispensary license. Petitioner\u2019s first choice for location was the Finger Lakes region.<\/p>\n

OCM reports that the injunction affects the economics of 54 potential retail dispensaries, 121 licensed cultivators, and 16 processors, many of whom have invested millions of dollars in their operations relying on OCM\u2019s licensing regulations. OCM adds in its affidavit that the applicant that sought and received the injunction would not have qualified for a license in the Finger Lakes region anyway, as it simply did not score high enough on the qualifying application to have been selected.<\/p>\n

The case number in the Northern District is: 1:22-cv-01013-GLS-DJS.<\/p>\n

A Hard Look At New York City\u2019s Illicit Cannabis Dispensaries<\/p>\n

November 29, 2022 \u2013 A report<\/a> prepared by the New York Medical Cannabis Industry Association, the New Jersey Cannabis Trade Association, and the Connecticut Medical Cannabis Council reveals significant problems in New York City\u2019s unlicensed and unregulated cannabis retail market. The report says that many of these locations falsely advertise the sale of THC products as legal or licensed, misleading consumers and selling products blatantly masquerading as popular name-brand chocolates, candies, gummies, and other well-known snacks.<\/p>\n

In addition to deceptive advertising practices, these illicit operations and their products represent a significant public health concern. From 2019-2020, more than 2,000 individuals were hospitalized, and 60 people died due to illness caused by vaping-associated lung injury (EVALI), a phenomenon that was largely linked back to additives in illicit THC vapes like those currently sold in these illegally operating shops.<\/p>\n

Testing of the products sold reveals an existing major health crisis. Results revealed the presence of several harmful contaminants, such as E. coli, pesticides, heavy metals, and salmonella in 40 percent of the illegal products purchased, including vapes. Many of the products tested did not contain the amount of THC advertised on the label and in one case, featured double the amount of listed THC. After reviewing the items under the state\u2019s proposed branding regulations, 100 percent of the products failed.<\/p>\n

And, tests conducted at independent labs found the presence of E.coli, salmonella, and pesticides in various products offered for sale.\u00a0E.coli and salmonella were found in flower and edible products purchased at some locations. E. coli in cannabis can cause many types of infection and is most often associated with diarrheal illness and lung infections that can become dangerous. Also, if inhaled, salmonella bacteria can cause severe fevers and fatigue symptoms that can remit and relapse. Salmonella infection can also be extremely difficult to treat and can have prolonged detrimental effects.<\/p>\n

Several products also contained heavy metals, including nickel and lead. Ingesting these contaminants in cannabis is also a cause for concern. Certain metals have the potential to cause headaches, nausea, and in cases of prolonged exposure, cancer, and organ failure. Respiratory illness can also occur upon combustion and inhalation of contaminated flower. To read the report, click here<\/a>.<\/p>\n

Proposed Regulations Affect Cultivators, Establish License Types and Tiers<\/p>\n

The Office of Cannabis Management (OCM) has proposed changes<\/a> to its adult-use cannabis program, with some changes specifically affecting cultivators.<\/p>\n

The proposed regulations and licenses support a structure similar to New York\u2019s alcohol industry, separating supply (cultivation, processing, distribution) from retail. The regulations maintain prohibitions on individuals having an interest in businesses across tiers. Essentially, operators or investors in a business on the supply side cannot also hold any interest in a retail business. This separation opens the market to more potential players and prevents the likelihood of concentrating economic power in a few stakeholders.<\/p>\n

As the regulations affect cultivators, they create different tiers of cultivation licenses that are differentiated by light source. The allotted square footage per license ranges from 5,000 \u2013 100,000 square feet. They also incentivize sustainable cultivation practices and limited energy utilization including outdoor cultivation.<\/p>\n

Cultivators are divided into categories based on the size of the cultivation canopy and the type of cultivation: (1) outdoor; (2) mixed light; (3) combination of outdoor and mixed light; and, (4) indoor. Within each category, there are five different tiers based on \u201ccanopy\u201d size ranging from less than 5000 square feet up to 100,000 square feet.<\/p>\n

Under the regulations, \u201ccanopy\u201d or \u201ccultivation canopy\u201d is an area measured in square feet using clearly identifiable boundaries of all areas(s) that will contain non-immature cannabis, vegetative or flowering, excluding seedlings or small clones. Under the regulations, canopy areas may be non-contiguous.<\/p>\n

The regulations<\/a> are not final until after a 60-day public comment period.<\/p>\n

Cannabis Control Board Approves First Conditional Adult Retail Dispensaries, But No Licenses Issued In Rockland or Hudson Valley<\/p>\n

NYS Cannabis Control Board Approves 28 Licenses for Business Owners with a Cannabis Conviction or a Family Member with a Cannabis Conviction, 8 Approved for Nonprofit Organizations. <\/p>\n

November 25, 2022 \u2013 The Office of Cannabis Management received over 900 applications for CAURD licenses. At today\u2019s meeting, the Board approved 36 provisional licensees, including 28 qualifying individuals and 8 nonprofit CAURD applicants. At least one CAURD license was granted in each available region of the state.<\/p>\n

Because a federal judge temporarily blocked New York State cannabis regulators from issuing licenses in certain regions of New York, including the Hudson Valley, no conditional licenses were issued pending the outcome of that litigation. Regulators said that 18 additional successful applicants would have been announced in the first wave if a recent injunction by a federal judge hadn\u2019t blocked them from issuing licenses in the Finger Lakes, central New York, western New York, Mid-Hudson and Brooklyn.\u00a0 Six of those licenses on hold are from the Mid-Hudson Region.<\/p>\n

Going forward, up to 175 licenses will be granted in total: as many as 150 to individual applicants and up to 25 to nonprofit applicants and licenses applications will be sent to the Board for its consideration on a rolling basis.<\/p>\n

Additionally, the Cannabis Control Board approved an additional 16 Adult-use Cannabis Conditional Cultivator Licenses, growing the total number of approved Adult-Use Cannabis Conditional Cultivator Licenses to 277. The approval of 8 Adult-Use Cannabis Conditional Processor Licenses raises the total issued by the Board to 33, and the approval of three laboratory permits brings the total to seven.<\/p>\n

Judge Blocks Licenses for Some Cannabis Dispensaries in New York<\/p>\n

November 10, 2022 \u2013\u00a0A federal judge temporarily blocked New York state cannabis regulators from issuing retail licenses amid a lawsuit by an applicant denied approval to operate in the state.<\/p>\n

U.S. District Court Judge Gary Sharpe issued the injunction based on a legal challenge brought by a Michigan-based operator. Variscite challenged those provisions in the law that require that licenses for retail cannabis dispensaries be awarded to people who have been affected by New York state drug laws.<\/p>\n

Variscite\u2019s owner was previously convicted of a marijuana-related offense in Michigan. The affected regions\u00a0 \u2014 the Finger Lakes, Central New York, western New York, the Mid-Hudson region and Brooklyn \u2014 are areas in which Variscite had sought and been denied a license to operate.<\/p>\n

Read\u00a0the 29-page injunction<\/a> here. The basis of the injunction was that the limitation to in-state licensees violates the federal interstate commerce clause, which generally prevents states from preferring its own residents over the residents of other states without a showing that its regulations or law are narrowly tailored to accomplish a legitimate purpose and that the preference to residents of its own state was in fact a legitimate purpose that could not be accomplished by other means.<\/p>\n

\u201cWe don\u2019t comment on pending litigation. The Office of Cannabis Management is committed to the Marijuana Regulation and Taxation Act\u2019s goals of including those impacted by the state\u2019s enforcement of cannabis prohibition in the market that we are building and we are additionally committed to getting New York\u2019s cannabis supply chain fully operational,\u201d said Office of Cannabis Management spokesman Freeman Klopott. \u201cThe Cannabis Control Board will soon have before it applications for the Conditional Adult Use Retail Dispensary license which will start closing that supply chain.\u201d<\/p>\n

<\/a><\/p>\n

Will President Biden\u2019s Pardons Lead To De-Scheduling Marijuana And Passage Of The SAFE Banking Act<\/p>\n

October 20, 2022 \u2013\u00a0On October 6, President Biden announced that he would issue pardons for all prior federal convictions for simple possession of marijuana, and urged state governors to do the same. President Biden also directed the Secretary of Health and Human Services (HHS) and the Attorney General to \u201cinitiate the administrative process to review expeditiously how marijuana is scheduled under federal law. \u201d Marijuana is classified as a Schedule I drug, along with heroin and LSD.<\/p>\n

Questions abound as to the possibility that the executive action will usher in cannabis banking reforms. Should cannabis actually be de-scheduled, banks and financial institutions will be more willing banking with cannabis companies. And, there is wide-spread belief that Biden\u2019s announcement may move Congress to finally pass the SAFE Banking Act, or some version of it.<\/p>\n

The SAFE Banking Act \u2013 which has passed the House of Representatives seven times in recent years but has never been taken up in the Senate \u2013 would enable cannabis businesses to access the federal banking system and also allow providers to the cannabis industry such as attorneys, accountants, lenders and landlords to contract with and accept payment from cannabis businesses without the risk of violating federal law.<\/p>\n

Applications for NY\u2019s First Retail Marijuana Locations Are In<\/p>\n

October 6, 2022 \u2013 With the first round of applications for New York\u2019s Conditional Adult-Use Retail Dispensary licenses closed, some 900 hopeful entrepreneurs are now awaiting action on their applications.<\/p>\n

New York\u2019s\u00a0Office of Cannabis Management<\/a> has yet to publish regulations for any of the state\u2019s nine general adult-use cannabis license categories. However, according to Syracuse.com, the state will issue up to 150 CAURD licenses<\/a>, and recipients will open New York\u2019s first legal adult-use dispensaries pursuant to those licenses.<\/p>\n

Individuals who qualify for a CAURD license must have been arrested in New York for a cannabis offense (or have a family member who was) before March 31, 2021, and have run a profitable business for at least two years. License recipients will have access to storefronts that are currently being secured and will be built out into dispensary spaces by the Dormitory Authority of the State of New York<\/a>\u00a0(DASNY).<\/p>\n

Plans also include granting 25 licenses to qualifying nonprofits, but those nonprofits won\u2019t have access to the DASNY properties or New York\u2019s $200 million social equity cannabis investment fund.<\/p>\n

\u00a0<\/p>\n

New York Set to Hobble \u2018Legal\u2019 Cannabis with Taxes and Regulations<\/p>\n

September 6, 2022 \u2013 \u201cSince June 1, the New York\u2019s Cannabis Control Board has issued 162 recreational cultivation licenses,\u201d Bloomberg Tax\u00a0recently noted<\/a>. \u201cThose fortunate enough to obtain one of New York\u2019s recreational cannabis licenses will be forced to contend with a gauntlet of state and local taxes.\u201d<\/p>\n

The analysis, prepared by three accountants, detailed a long list of sales taxes, corporate taxes, and \u201crecently enacted adult-use cannabis taxes.\u201d Given the number of jurisdictions involved and uncertainty as to how they\u2019ll apply to businesses that won\u2019t be able to open their doors until the end of the year, at soonest, the authors declined to guess at the final tax burden. But it will be high, and compliance a guessing game with penalties awaiting those who cross the authorities. It\u2019s a good bet that many entrepreneurs accustomed to operating in the illicit market will remain underground rather than risk the costs and hassles of legal operation as envisioned by Empire State officials. After all, technical legalization hobbled by stiff taxes and regulation has already stumbled elsewhere. Read more\u2026<\/a><\/p>\n

<\/a><\/p>\n

An Update on New York\u2019s Recreational Cannabis Market<\/p>\n

As of June 1, New York state\u2019s Cannabis Control Board has issued 162 recreational cultivation licenses. The first recreational retail licenses aren\u2019t expected to appear until the end of 2022. According to Chris Alexander, executive director of the state\u2019s Office of Cannabis Management, final regulations are still being designed. And while some dispensaries will probably be licensed by end of 2022, a mature market isn\u2019t expected for another two to three years.<\/p>\n

Also, by signing the 2022-2023 state budget into law, New York Gov. Kathy Hochul enacted Senate Bill S8009, freeing state cannabis taxpayers from the burdensome impact of IRS Code Section 280E, beginning January 1, 2023.<\/p>\n

Section 280E disallows deductions and credits on federal returns for expenditures connected with the illegal sale of drugs, requiring retail cannabis businesses to add back such significant expenses as rent and wages for sales staff. Like California, however, New York state now allows these and other standard business deductions on state returns.<\/p>\n

OCM Issues Public Service Announcement<\/p>\n

June 20, 2022 \u2013 The New York State Office of Cannabis Management (OCM) recently released a public service advertisement calling attention to the state\u2019s goals of creating a diverse and inclusive industry and repairing harm done during cannabis prohibition.<\/p>\n

The advertisement released today is the first cannabis related advertisement in the nation focusing on the disproportionate enforcement of cannabis prohibition to appear on broadcast television. It highlights the wide disparity in arrest rates for cannabis offenses for Black, Brown, and White New Yorkers during the 30 years prior to cannabis legalization. It states that Black people in New York were 15 times more likely to get arrested for cannabis than White people over the last 30 years; Latinos were 8 times more likely. Despite these disparities, data has shown that cannabis use among different races is essentially the same. The data points are based on New York State arrest data from data from the U.S. Department of Health and Human Services, Centers for Disease Control and Prevention, National Center for Health Statistics.<\/p>\n

View the PSA here.<\/a><\/p>\n

Misdemeanor and felony marijuana arrest data by race\/ethnicity and county from 1990 to 2020, and notes about the data, are available on the OCM website.<\/p>\n

New York Regulators Approve Marketing Rules for Legal Cannabis<\/p>\n

June 7, 2022 \u2013 New York regulators voted to approve draft regulations for the packaging and advertising of licensed cannabis products in advance of the launch of recreational marijuana sales later this year.<\/p>\n

Under the\u00a0draft regulations<\/a> from the New York Cannabis Control Board, companies will be permitted to advertise their products on television, radio, social media and other platforms. But the proposed rules include strict provisions designed to protect children from being influenced by cannabis marketing.<\/p>\n

\u201cProtecting public health, reducing harm and promoting sustainable industry practices are key components of legalizing cannabis for adult use and I look forward to considering these regulations as we develop the industry,\u201d Cannabis Control Board Chair Tremaine Wright\u00a0said in a statement quoted<\/a>\u00a0by the\u00a0New York Post. \u201cWe are committed to building a New York cannabis industry that sets high standards for protecting children and keeping products safe and sustainable.\u201d<\/p>\n

Labels for cannabis products must include the serving size, potency, ingredients, and directions for usage and storage. Packaging and advertising that contain cartoon characters, bubble lettering, neon colors, references to candy, or other elements likely to appeal to person younger than 21 are not allowed.<\/p>\n

The regulations also forbid the use of endorsements from celebrities who appear to be younger than 21 and ban the use of common terms in the cannabis culture lexicon including \u201cweed,\u201d \u201cpot,\u201d \u201cstoner,\u201d and \u201cchronic.\u201d Misleading claims of health benefits and indications that the product is \u201csafe\u201d or \u201corganic\u201d are also prohibited, as are actual images of marijuana or people vaping or smoking.<\/p>\n

More details about cannabis marketing can be found here.<\/a><\/p>\n

Green Kulture and Two Chicks and Flowers in partnership with NY Small Farma host \u201cErasing the Stigma\u201d at Rockland Community College Cultural Arts Center<\/p>\n

May 15, 2022 \u2013 Erasing the Stigma, is an informational cannabis event on May 20, 2022, 5pm to 8pm at RCC Cultural Arts Center Theater. This FREE event in partnership with NY Small Farma LTD will be produced by NY based cannabis cultivation company Green Kulture; and NY based cannabis lifestyle brand Two Chicks and Flowers. Erasing the Stigma aims to bring awareness to the plight of BIPOC who have been affected by the \u2018War on Drugs\u2019 who are now eligible to apply and operate legally in the cannabis industry in New York State.<\/p>\n

This informational event was carefully constructed with Rockland county local government officials, cannabis advocates, attorneys, business owners and community leaders aimed to bring awareness and provide information to aspiring New York BIPOC and minority entrepreneurs for the highly anticipated licensing process forthcoming. This initiative is particularly laudable as the cannabis industry continues to grow not only nationally but in New York State, with the entrant of more brands and entrepreneurs POC into the space to meet the growing needs of cannabis consumers.<\/p>\n

Green Kulture and NY Small Farma LTD will join forces with Two Chicks and Flowers who recently hosted their cannabis informational event titled \u201cA Piece of The Pot\u201d on December 7, 2021 in Brooklyn\u2019s BedStuy Restoration Plaza which includes a similar layout for Erasing the Stigma.<\/p>\n

Registration for \u2018Erasing the Stigma\u2019 will be a first come, first RSVP approach as this is a FREE public community event limited to the 500 seats capacity theater via a dedicated EventBrite<\/a> link. In accordance with New York State guidelines, attendees will be required to provide proof of vaccination prior to entering the venue.<\/p>\n

Approval of First 52 Adult-Use Cannabis Conditional Cultivation Licenses to Farms in New York<\/p>\n

April 15, 2022 \u2013 The Cannabis Control Board approved 52 Adult-use Cannabis Conditional Cultivator Licenses across the state. These are the first adult-use cannabis licenses granted in New York State and they advance the Seeding Opportunity Initiative.\u00a0<\/p>\n

The approved licenses are from a pool of more than 150 that have been submitted to the Office of Cannabis Management (OCM) following the March 15 opening of the online application portal. The OCM will continue to review applications on a rolling basis and will work to get them to the Board for approval as quickly as possible. A list of the licenses approved today is available\u00a0here<\/a>.<\/p>\n

New Yorkers With Marijuana Convictions Will Get First Retail Licenses<\/p>\n

March 9, 2022 \u2013 New York State plans to introduce retail sales of marijuana by year-end 2022. Abundant stores of product will be available to licensees grown by New York farmers. New York may also lease storefronts to facilitate the opening of dispensaries. The first licensees must be either a person convicted of a marijuana-related offense or an immediate family member of one.<\/p>\n

The policy, to be announced by Gov. Kathy Hochul on Thursday, is part of a concerted push to assure that early business owners in the state\u2019s projected billion-dollar marijuana industry will be members of the communities adversely affected by the state\u2019s criminal justice system. To read the full fact sheet, click here<\/a>.<\/p>\n

CONDITIONAL USE CANNABIS CULTIVATOR LICENSES FOR NY HEMP FARMERS<\/p>\n

February 22, 2022 \u2013\u00a0Governor Kathy Hochul signed legislation creating a new Conditional Adult-use Cannabis Cultivator license, establishing a pathway for existing New York hemp farmers to apply for a conditional license to grow cannabis in the 2022 growing season for the forthcoming adult-use cannabis market. Under the law, conditionally licensed cannabis farmers must meet certain requirements, including safe, sustainable and environmentally friendly cultivation practices, participation in a social equity mentorship program, and engagement in a labor peace agreement with a bona fide labor organization.<\/p>\n

With a conditional adult-use cannabis cultivation license, farmers can grow outdoors or in a greenhouse for up to two years from the issuance of the license. It also allows them to manufacture and distribute cannabis flower products without holding an adult-use processor or distributor license, until June 1, 2023. Cultivators are limited to one acre (43,560 square feet) of flowering canopy outdoors or 25,000 square feet in a greenhouse and can use up to 20 artificial lights. They can also split between outdoor and greenhouse grows with a maximum total canopy of 30,000 square feet as long as greenhouse flowering canopy remains under 20,000 square feet.<\/p>\n

The OCM will be developing a license application process and opening the program as soon as possible. To qualify for an Adult-use Cannabis Conditional Cultivator License an applicant must have been an authorized industrial hemp research partner for the Department of Agriculture and Markets, cultivating hemp for its non-intoxicating cannabinoid content for at least two of the past four years and in good standing as of December 31, 2021, when the research program ended.<\/p>\n

Holders of the license must also participate in a social equity mentorship program where they provide training in cannabis cultivation and processing for social and economic equity partners, preparing them for potential roles in the industry. Growers will also have to meet sustainability requirements to ensure the cannabis is grown in an environmentally conscientious way.<\/p>\n

January 16, 2022: Cannabis Career Institute Online (CCI Online) announced today that they are co-hosting a one-day workshop, Cannabis Business Opportunities in New York, with Rockland Community College. The workshop will showcase the full scope (from seed to sale) of business and career opportunities in the New York Cannabis Industry. The workshop will be held virtually on February 10th, 2022. The cost of admission is $219, and you can register here<\/a>.<\/p>\n

Opening remarks for the event will be delivered by Michael A. Baston, President Rockland Community College. Panels will be made up of entrepreneurs, social equity business owners, economic developers as well as municipality representatives, including Grant Valentine, Deputy Mayor for the Village of Chestnut Ridge and Consultant for New York State Cannabis Association of Minorities & Women Professionals.<\/p>\n

Panel topics to be discussed include, Seizing Cannabis Market Expansion Opportunities: Social Equity, Diversity & Inclusion, Job Creation as well as Employment & Legal, Banking\/Finance, Entrepreneurial Perspectives of Owning Your Own Cannabis Business. By interacting with the extensive list of panelists, participants will gain crucial information needed to successfully enter the emerging market of recreational cannabis and the expanding medical cannabis market.<\/p>\n

\u00a0<\/p>\n

Rockland Opt-In, Opt-Outs
Towns<\/p>\n

Villages<\/p>\n

Marijuana Opt-Out Tracker \u2013 Brought To Us By The Rockefeller Institute<\/p>\n

December 7, 2021 \u2013 For an easy to use and up-to-date presentation of New York\u2019s villages\u2019 and towns\u2019 decisions on dispensaries and consumption lounges, check out the Marijuana Opt-Out Tracker<\/a> by the Rockefeller Institute.<\/p>\n

JP Morgan Chase Restricts Trading on Cannabis Stocks<\/p>\n

November 3, 2021 \u2013 According to Reuters<\/a> and based on a letter it reviewed, JP Morgan Chase plans on limiting its clients access to US-based securities, effective November 8, 2021. Clients will still be able to liquidate their positions after that date.<\/p>\n

Other banks, including Credit Suisse have similarly limited its clients\u2019 abilities to execute transactions or have it hold shares for clients in cannabis-related companies with U.S. operations.<\/p>\n

The Chase restrictions apply to companies with U.S. operations that are not listed on the Nasdaq, the New York Stock Exchange or the Toronto Stock Exchange and have a \u201cdirect nexus to marijuana-related activities.\u201d<\/p>\n

Cowen and Co, another U.S. bank active in the cannabis trading space, in September increased its cash margin requirements for all marijuana related trades on its platform.<\/p>\n

Some investors have blamed recent selloffs in U.S. cannabis stocks on banks backing away from the sector and the new restrictions at JPMorgan and Cowen could add to the pressure.<\/p>\n

\u201cJPMorgan\u2019s move to block its customers from buying securities in fully legal, regulated cannabis companies is beyond disappointing,\u201d U.S. Cannabis Council CEO Steven Hawkins said in a public statement following the news. \u201cPublicly-traded cannabis companies operate entirely within the law, and the industry is poised for tremendous growth. JPMorgan\u2019s new policy is regressive and at odds with the majority of Americans, who want legal, regulated cannabis. What\u2019s more, it\u2019s self-defeating. The end of federal cannabis prohibition is within site, and the industry is already growing rapidly. I imagine more than a few JPMorgan customers will take issue with being blocked from one of the hottest industries on the market today. JPMorgan is on the wrong side of history on this and will come to regret its decision.\u201d<\/p>\n

Nyack Village Board Defers Decision on Cannabis Opt-Out Until November 18, 2021<\/p>\n

October 29, 2021 \u2013 During a lengthy Zoom meeting last night, the Nyack Village Board took public input on the draft of its local law opting out of both retail cannabis dispensaries and lounges. Citing uncertainty in state regulations and a lack of provisions for dispensaries and lounges in its local zoning code, the Board initially was poised to vote on the Local Law opting out. After several speakers on the Zoom conference spoke in opposition to the plan, the Village Board decided to keep the public hearing open, do additional research, and reconvene on November 18, 2021.<\/p>\n

Speakers spoke of lost opportunities for additional tax revenue and the filling of vacant retail space, and misconceptions regarding the availability of dispensary licenses in the future. Residents also pointed out that opting out would only bolster the existing illegal market for cannabis. Others talked about the quality control for the products that licensed dispensaries would provide versus whatever was currently being sold on the streets.<\/p>\n

Gifting of Marijuana Illegal in New York If Part of Another Transaction<\/p>\n

October 26, 2021 \u2013 The gifting of limited amounts of marijuana between adults is not illegal in New York, unless the gifting is part of another transaction. During its October 21st meeting of the Office of Cannabis Management, Tremaine Wright, Chair of the Cannabis Control Board opined on the practice of gifting. Wright said:<\/p>\n

\u201cAs a reminder to all, we do not yet have state regulated adult use cannabis products on the market. We have not authorized recreational sales. We are hearing many examples of sales of marijuana products by individual vendors and retail locations. However, they are not licensed, nor are they selling regulated products. There are current 38 medical dispensing facilities across the state. We do not have any adult use nor recreational dispensaries. Any individuals selling cannabis or marijuana products in these unlicensed dispensaries, pop up shops or markets is not licensed, nor are they selling safe, tested products. I also wanted to share that any unlicensed sale or distribution of cannabis remains illegal. While gifting or transferring cannabis under the possession limit between adults who are 21 years or older without any money paid or services provided is legal.<\/p>\n

Gifting does not include instances in which cannabis is given away at the same time as another transaction nor when it is offered or advertised in conjunction with an offer for the sale of goods or services\u00a0(emphasis added). There are no legal producers of cannabis other than those whose production is intended for medicinal use. The cannabis being exchanged in the transactions just described those remain illicit. There is no gray market in New York State. This conduct is not legal and must stop. Individuals who do not cease run the risk of severe financial penalties.\u201d<\/p>\n

The statements were in response to numerous stories of vendors coupling \u201cgifted\u201d marijuana with sales of over-priced items, under the guise that the marijuana was not actually sold. Wright\u2019s statement likely does not have the force of law. For a full transcript of the meeting, click here<\/a>.<\/p>\n

Town of Ramapo Considers Opting Out of Retail Dispensaries and On-Site Consumption Lounges<\/p>\n

\"optingOctober 28, 2021 (UPDATE) \u2013 Decision deferred to November 10, 2021 Town Board Meeting
October 26, 2021 \u2013 The Town of Ramapo is the latest Rockland County municipal government considering opting out of cannabis retail dispensaries and consumption lounges. At a public hearing on October 13, 2021, the Town Board adjourned without voting and deferred the decision to October 27th\u2019s meeting. The opt-out decision will only affect the unincorporated areas of the Town, not the villages therein. On October 3, 2021, the Village of Suffern in the Town of Ramapo also opted out of retail dispensaries and consumption lounges.<\/p>\n

New Workplace Guidance Issued By New York State Department of Labor<\/p>\n

October 21, 2021 \u2013 The MRTA amended Section 201-D of the New York Labor Law to clarify that cannabis used in accordance with New York State law is a legal consumable product. As such, employers are prohibited from discriminating against employees based on the employee\u2019s use of cannabis outside of the workplace, outside of work hours, and without use of the employer\u2019s equipment or property.<\/p>\n

PERMITTED EMPLOYER ACTIONS<\/p>\n

The MRTA amended New York Labor Law Section 201-D by adding a new subsection 4-a, which provides that
employers MAY take employment action or prohibit employee conduct where:
\u2022 An employer is\/was required to take such action by state or federal statute, regulation, or ordinance, or
other state or federal governmental mandate
\u2022 The employer would be in violation of federal law
\u2022 The employer would lose a federal contract or federal funding
\u2022 The employee, while working, manifests specific articulable symptoms of cannabis impairment that decrease or lessen the employee\u2019s performance of the employee\u2019s tasks or duties
\u2022 The employee, while working, manifests specific articulable symptoms of cannabis impairment that interfere with the employer\u2019s obligation to provide a safe and healthy workplace as required by state and federal workplace safety laws<\/p>\n

Detailed workplace policies are outlined in the DOL Guidance<\/a>, including drug testing, retaliation for use, termination, reinstatement, off-hours or off-site use, and work-from home use. For a more in depth look, review the guidance here<\/a>.<\/p>\n

The MRTA and New York Labor Law Section 201-D do not apply to individuals who are not employees (e.g., students who are not employees, independent contractors, individuals working out of familial obligation, volunteers) or provide any consumer protections. Employees under the age of 21 are also not covered, as cannabis use by individuals under the age of 21 is prohibited by New York Law and not subject to the present protections. The law also does not apply to employees of the federal government.<\/p>\n

New York Municipalities Continue to Opt Out of Recreational Marijuana Dispensaries and Lounges<\/p>\n

October 7, 2021 \u2013 Cannabis consultant Mike Doyle has created and is maintaining a municipal cannabis opt-out tracking map for New York State. The map also tracks opt-ins, pendings, and still-to-be-decideds. Please read the maps notes before using for a full explanation of the icons and methodology.<\/p>\n

Leaning-In are 14 municipalities. Leaning-Out: 20. Opted-In: 37. Opted-Out: 102. Undetermined: 58. Upcoming Meetings: 67 (Information as of 10-7-2021)<\/p>\n

In accordance with the Marijuana Regulation and Taxation Act (MRTA), towns, villages, and cities have until December 31 to decide if marijuana dispensaries and cannabis cafes can situate in their communities. Counties can\u2019t decide, and villages within towns make their own decisions. When a town opts out, it only binds the unincorporated areas within those towns \u2014 not the villages themselves.<\/p>\n

For example, on October 3, 2021, the\u00a0Village of Suffern<\/a>\u00a0opted out, even though the Town of Ramapo has yet to decide the issue. As the year winds down, there will be a flurry of new local laws passed for those municipalities choosing to opt-out.<\/p>\n

Opting-out municipalities believe they can always opt back in at a later date, and while that may be true, if the state limits the number of licenses issued, the opt-back-in vote may not have much meaning.<\/p>\n

Goodness Growth Holdings Completes First National Cannabis Expungement Month<\/p>\n

October 6, 2021 \u2013 Goodness Growth Holdings, Inc., a physician-led, science-focused cannabis company announced the completion of its first ever national cannabis expungement month.<\/p>\n

In September, Goodness Growth hosted or sponsored four expungement clinics in Minnesota,\u00a0Maryland\u00a0and\u00a0New York\u00a0and helped more than 100 people file the necessary paperwork to get their simple, nonviolent cannabis charges expunged from their records.<\/p>\n

In\u00a0New York, Goodness Growth partnered with Women of Color, CannaClusive, the Black Bar Association and other cannabis industry and legal aid organizations to host a 30-day virtual expungement clinic. The clinic also offered resources for those experiencing PTSD and emotional trauma related to their arrest and conviction. The virtual\u00a0New York\u00a0clinic continues through\u00a0Oct. 16; interested persons can take an expungement pre-qualification survey or access information and resources by visiting\u00a0https:\/\/wocworldwide.com\/expungement<\/a>.<\/p>\n

New York Marijuana Regulators Hold First Meeting | Patient Access To Flower Cannabis Approved<\/p>\n

October 5, 2021 \u2013 New York\u2019s Cannabis Control Board (CCB) held its first meeting on Tuesday. The public was invited to listen in online.<\/p>\n

Changes to the state\u2019s existing medical cannabis program include allowing dispensaries to sell flower marijuana products to qualified patients. Home cultivation for patients remains prohibited and although New York Assemblywoman Tremaine Wright (D), who chairs CCB, announced the body is \u201cvery committed to drafting these regulations and issuing them for public comments, and expect it to be an agenda item on one of the upcoming board meetings,\u201d it was not clear when home grow regulations will be put into place.<\/p>\n

Qualified patients will now be able to access flower cannabis products at existing dispensaries, and the $50 registration fee for caregivers and patients was permanently waived.<\/p>\n

The board also signed off on Jason Starr, who served as assistant counsel to former New York Gov. Andrew Cuomo (D) and also worked at the New York Civil Liberties Union to become chief equity officer.<\/p>\n

How Will Interstate Commerce & Competition Affect New York\u2019s Nascent Marijuana Industry<\/p>\n

ANALYSIS<\/p>\n

(October 1, 2021) Marijuana produced in one state \u2013 raw material or finished product, wholesale or retail \u2013 cannot be imported from, or exported to, another state for sale. That\u2019s known as interstate commerce, and each state\u2019s laws limit the movement of marijuana to within the state. Marijuana is still considered a Schedule 1 controlled substance under federal law.<\/p>\n

But looking forward to the federal legalization of marijuana, or at least a provision allowing for interstate transactions, sends chills up the spines of local growers, processors, distributors and investors.<\/p>\n

The Commerce Clause of the U.S. Constitution prohibits state laws that unduly restrict interstate commerce under a well-established doctrine created by the U.S. Supreme Court. Under this doctrine, state laws prohibiting the import and export of state-legal marijuana would likely be unconstitutional, if challenged.<\/p>\n

Until that happens though, states have an economic interest in protecting their home-grown farmers, processing facilities and distribution networks.<\/p>\n

States that have long-established growing facilities and established supply chains (e.g. California, Oregon) would have a cost and logistics advantage over states that have more recently legalized recreational use (e.g. New York, New Jersey), and could adversely affect or even prevent the development of local industry. Those established states already have an oversupply of product and production capacity. Exporting cheaper marijuana grown out west to states like New York and New Jersey would hamper local efforts to establish local supply networks, processing plants and distribution facilities. Facilities in northern states have the added costs of climate control as most year-round growing will likely take place in indoor greenhouses and other energy-hungry facilities.<\/p>\n

\u201cInterstate Commerce is the worst thing that can happen to small farmers and social equity businesses. It would benefit California and Oregon to alleviate their oversupply. But, it\u2019s a disaster for newly legalized states to play catch-up with an established supply chain infrastructure as robust as California or Oregon. Building greenhouses and outdoor operations take years to build,\u201d says Allan Gandelman<\/a>, president of the New York Cannabis Growers and Processors Association.<\/p>\n

\u201cAnd in those two states, specifically, people are selling their cannabis at a low cost of production, which does nothing but drive the market prices to the bottom. The only people who will survive in that system are overcapitalized giant corporations that can scale up and have the financial resources to take a loss for a few years.\u201d<\/p>\n

The interstate movement of marijuana may still be some time off, but in all likelihood will be a reality. Newer states need to accelerate the development of their local industries to fend off competition from established states and eventually imports from Mexico and Colombia, where growing costs are significantly cheaper.<\/p>\n

Also, Interstate commerce could happen before federal legalization, such as through agreements among neighboring states (an idea being spearheaded by the Oregon-based Alliance for Sensible Markets).<\/p>\n

\u201cEven with federal legalization, retail would probably remain local through licensed shops (similar to licensed liquor stores), and Congress would likely ban shipping marijuana products through the mail (similar to nicotine products),\u201d says Marc D. Hauser<\/a> is an attorney and vice chair of the Cannabis Practice Team at the Reed Smith law firm.<\/p>\n

Federal descheduling (or rescheduling) of marijuana could quickly bring a wave of investment, consolidation and competition, all of which could dramatically change how New York businesses and state government might approach the development and acceleration of a New York-based marijuana market.<\/p>\n

Crains Communications Acquires Green Market Report, A Cannabis Financial News Site<\/p>\n

September 29, 2021 \u2013 Green Market Report launched in 2017 and averages about 150,000 page views per month. The New York-based digital media outlet specializes in topics including cannabis legislation, financial reporting and business trends.<\/p>\n

\u201cWe are excited to add Green Market Report to our now 21-brand portfolio,\u201d KC Crain, president and CEO of Crain Communications, said in a news release. \u201cThey focus on the financial, business and economic side of the cannabis industry, so it\u2019s a natural fit with our other business brands.\u201d<\/p>\n

Goodness Growth Sale\/Leaseback Deal Closes<\/p>\n

September 28, 2021 \u2013 Goodness Growth Holdings, Inc.\u00a0 closed on a sale\/leaseback deal with Innovative Industrial Properties, Inc. (IIP) in New York. Goodness Growth reported that it sold IIP approximately 92.3 acres of land for $1.2 million. The site is next to Goodness Growth\u2019s existing cannabis cultivation and processing facility in Johnstown, New York, which was formerly the site of a juvenile detention center. IIP said it plans to provide a tenant improvement reimbursement to Goodness Growth of roughly $55 million for the construction of a new 324,000 square foot cannabis cultivation, processing, and research and development facility.<\/p>\n

U.S. House Passes SAFE Banking Legislation (Again)<\/p>\n

September 28, 2021 \u2013 The U.S. House of Representatives passed SAFE Banking legislation by voice vote, as an amendment to the National Defense Authorization Act.<\/p>\n

The SAFE Banking amendment would enable financial institutions to support the cannabis industry by explicitly permitting financial institutions to do business with cannabis companies and prohibiting the government from terminating or limiting a financial institution\u2019s deposit or share insurance solely because the financial institution has cannabis clientele.<\/p>\n

Only a limited number of financial institutions are currently willing to take on the risk of providing banking services to cannabis companies. Those institutions that are willing to bear the risk often charge exorbitant fees that foreclose access to many smaller and diversity-owned entities. As a result, the economic development of all cannabis industries has been stymied, through reduced access, high barriers to entry, and an unwarranted and unsustaintable dependence on cash transactions. Limited banking option encourages and industry dependent on cash-only transactions \u2014 a major security concern to the cannabis industry and to municipal governments that host cannabis related businesses.<\/p>\n

The bill will next go to the Senate, which is working on its own version of the legislation.<\/p>\n

IRS Provides Resources To Help Cannabis Business Owners Successfully Navigate Unique Tax Responsibilities<\/p>\n

September 27, 2021 \u2013 In its most recent issue of \u201cA Closer Look<\/a>\u201d the IRS focuses on the tax implications for the rapidly growing cannabis\/marijuana industry. <\/p>\n

However, because it\u2019s a Schedule I controlled substance, Section 280E of the tax code applies, even if the business operates in a state that has legalized the sale of marijuana.<\/p>\n

At last count, 36 states plus the District of Columbia have legalized marijuana for recreational or medicinal use, or both. These states, such as\u00a0California<\/a>,\u00a0Washington<\/a>\u00a0and\u00a0Colorado<\/a> provide tax guidance for businesses and we strongly encourage industry members to remain compliant with state taxes as well. And while there are 14 states that still ban cannabis use, the IRS expects both unlicensed and licensed marijuana businesses to continue to grow.<\/p>\n

While IRS Code Section 280E is clear that all the deductions and credits aren\u2019t allowed for an illegal business (marijuana is still considered a Schedule 1 controlled substance under federal law), there\u2019s a caveat: Marijuana business owners can deduct their cost of goods sold, which is basically the cost of their inventory. What isn\u2019t deductible are the normal overhead expenses, such as advertising expenses, wages and salaries, and travel expenses, to name a few.<\/p>\n

Here are some other helpful tips from the IRS to help cannabis\/marijuana business owners:<\/p>\n

Know your investors<\/p>\n

There are thousands of people trying to get into the industry legitimately; however, there are some pitfalls with investors that business owners need to be aware of to make sure their investors don\u2019t cause more harm than good. The social stigma and federal designation as an illegal substance have led to unregistered and \u201csilent\u201d financing and ownership arrangements within the industry. Individuals associated with these funding and ownership arrangements are often referred to as \u201cbeneficial owners.\u201d\u00a0A beneficial owner enjoys the benefits of ownership, but the property\u2019s title or activity is in another name. This creates complex compliance challenges for the IRS and may contribute to a business\u2019s failure to file a tax return or accurately report gross receipts. IRS examiners explore the potential for these arrangements during examination engagements.<\/p>\n

Additionally, cannabis\/marijuana business owners should be aware of nefarious investors who will try to put funds into these new businesses that could cause them to lose their entire business. For example, if one of these silent investors gives initial money, say $5,000 or $10,000, and it grows to where they can then claim ownership, these businesses can become complicit in laundering money for drug traffickers.<\/p>\n

Ensure you\u2019re licensed<\/p>\n

Make sure you\u2019re licensed for whatever your location requires. Cannabis\/marijuana businesses are highly regulated by state and municipal regulatory agencies from a licensing, product development and movement perspective.<\/p>\n

File and pay your taxes on time<\/p>\n

As mentioned earlier, even if your business operates with cash, you are still responsible for filing and paying your taxes on time.<\/p>\n

The Internal Revenue Code doesn\u2019t differentiate between income derived from legal sources and income derived from illegal sources. It\u2019s all income and is taxable and must be reported on your tax return. However, because it\u2019s a Schedule I controlled substance, Section 280E of the tax code applies, even if the business operates in a state that has legalized the sale of marijuana.<\/p>\n

But Section 280E doesn\u2019t prohibit a participant in the marijuana industry from reducing their gross receipts by properly calculating the cost of goods sold to determine its gross income. For example, a marijuana dispensary may not deduct advertising or selling expenses, but it may reduce its gross receipts by its cost of goods sold.<\/p>\n

Cannabis businesses have no exemption from their employment tax obligations, and as with other small businesses, they often need to make quarterly tax payments. These business owners should always pay their taxes on time to avoid interest and penalties.<\/p>\n

Enforcement efforts in the industry indicate there are taxpayers operating in segments of the industry (growers, transporters, wholesalers and retailers\/dispensaries) who fail to file U.S. tax returns. These business owners should be aware that non-filers are an IRS enforcement priority.<\/p>\n

Another of our top enforcement priorities in the cannabis industry is the use of cryptocurrency. Those who use it need to understand that the IRS considers it property, and there are gains that are taxable.\u00a0 Anyone using cryptocurrency in their business to work with a reputable exchanger.<\/p>\n

Report your cash transactions<\/p>\n

Because marijuana is listed as a U.S. Schedule 1 drug, many businesses do not participate in the U.S. banking system and conduct transactions in cash.<\/p>\n

Keep good records<\/p>\n

All records, such as receipts, canceled checks and other documents that support an item of income, a deduction or a credit appearing on a return should be kept regardless of whether they\u2019re tracked by hard copy or electronically. It\u2019s important for a cannabis business to maintain records for all expenses, even those that are not legally deductible at the federal level, because good, well-organized records make it easier to prepare a tax return, track expenses, substantiate items reported on tax returns, and help provide answers if a return is selected for examination.<\/p>\n

Ulster County And Hudson Valley Towns Welcome Cannabis Economy, While Some Opt Out of Economic Benefits<\/p>\n

September 22, 2021 \u2013 A major cannabis facility may be coming to Ulster County as early as spring 2022.<\/p>\n

Cresco Labs, a vertically integrated cannabis and medical marijuana company, is planning on developing a major cannabis cultivation, processing, packaging and distribution facility in the Ellenville area.<\/p>\n

Cresco Labs is eyeing the former Schrade knife company near Ellenville, a site which closed down 17 years ago.<\/p>\n

Cresco Labs says the facility will employ 300 to 400 people. The facility is expected to be at least 360,000-square-feet and would include a new building for cultivation, as well as spaces for processing, packaging, distribution, and offices.<\/p>\n

Ulster County has 400-plus farms and nearly 60,000 acres of farmland perfect for growing cannabis.<\/p>\n

New York State towns have until Dec. 31 to opt out on allowing marijuana dispensaries or retail cannabis locations in their municipalities. The Towns of New Paltz, Poughkeepsie, Newburgh and Kingston have opted in.<\/p>\n

Poughkeepsie has not taken any action on opting out of cannabis sales, and is unlikely to do so.<\/p>\n

Newburgh supports allowing dispensaries and on-site marijuana consumption in the city limits.<\/p>\n

In the Hudson Valley, the towns of Goshen, Rhinebeck, Phillipstown, Middletown, Crawford, the Village of Chester and the Village of Cold Spring have all opted out.<\/p>\n

Cannabis Campus Flowers in Warwick<\/p>\n

September 22, 2021 \u2013 In an ironic twist, the Mid-Hudson Correctional Facility in Orange County will be re-purposed as a center for medical\/recreational cannabis cultivation and production. The facility was closed in 2011 and the 150-acre campus was sold as \u201csurplus state property\u201d to a Local Development Company (LDC).<\/p>\n

\"\"Renamed Wickham Woods, there was a formal groundbreaking for Chicago-based Green Thumb Industries\u2019 (GTI) first cannabis growing facility in New York on the former prison grounds. New York is the 15th state in which GTI has established operations.<\/p>\n

The first phase of GTI\u2019s buildout is valued at $60 million. When the next two phases are complete, the total investment will be approximately $150 million, and an estimated 150 to 200 jobs with benefits will be created by GTI\u2019s, many ranging in the six-figure category. The project is expected to be fully operational by 2023.<\/p>\n

\u00a0<\/p>\n

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