On Monday August 7th, a New York State Supreme Court judge, Kevin Bryant, issued a restraining order to the Office of Cannabis Management (OCM) which halts the progress of adult-use dispensary licenses. The order came in response to a lawsuit brought against the OCM by four disabled military veterans who claim that the Conditional Adult Use Retail Dispensary (CAURD) program is unconstitutional. According to Judge Bryant’s injunction and order, the government agency is barred from awarding or processing any further CAURD licenses until such time as decided by the Court.
What Is The Disabled Veterans' Lawsuit Against New York's Office Of Cannabis Management?
Veterans Carmine Fiore, William Norgard, Steve Mejia, and Dominic Spaccio filed the lawsuit against the OCM last week. They allege that regulators are keeping disabled veterans and other minority groups from participating as fully in the legal cannabis market as the Marijuana Regulation and Tax Act (MRTA) requires. Under MRTA, disabled veterans are one of five groups that the law prioritizes as social equity; this also includes women and minority-owned businesses, distressed farmers, and people convicted of cannabis-related charges.
However, according to the lawsuit, veterans were excluded from the first round of CAURD licenses, which all went to justice-involved entrepreneurs. Spaccio was quoted in the New York Post as saying, ““The continued issuance of CAURD licenses puts people with criminal convictions in front of service-disabled veterans and all other MRTA-directed social and economic equity classes… What I am suing for is equal access under the law. The MRTA does say that there should be equity for certain individuals and not others. I qualify too.”
Judge Kevin Bryant Prevents Office Of Cannabis Management From Issuing CAURD Licenses
Judge Bryant agreed with the plaintiffs, writing that he believes there is sufficient evidence that they are facing “irreparable injury, loss or damage” without a restraining order put on the OCM. A hearing is scheduled for Friday, August 11th in Ulster County Supreme Court where the agency will have to “show cause why an order should not be entered.” Until then, the OCM is prevented from issuing, processing or conferring operational approval upon any additional CAURD licenses.
This news is causing a frenzy among CAURD licensees. Currently 463 licenses have been granted, but only 21 dispensaries are operational throughout the state, while the majority remain in a limbo of location scouting, design and buildout. The order comes as a blow to what has already been a highly criticized slow rollout of New York’s legal dispensaries.
Additionally, the veterans’ suit is just the latest in a number of legal challenges to the OCM. The department’s enforcement actions against unlicensed cannabis businesses in Upstate New York have resulted in owners of the raided establishments arguing for their constitutional rights. And while the earlier suit from a Michigan-based entrepreneur filed in November 2022 was dismissed this March, some of the questions the case raised about the foundations of the CAURD program seem to be lingering in people’s minds. Even cannabis attorney David Feder, in commenting about Bryant’s order to Green Market Report, admitted the veterans’ case “has legs.”
Cannabis Community Conflict Over CAURD Catch-22: What's Next For New York's Legal Market?
While this is shocking to the cannabis community, many in the space feel conflicted. Prince Franco, Customer Service and Marketing Specialist for Housing Works Cannabis Co (the very first CAURD licensed retailer opened), explained his thoughts on how the order is going to wreak havoc on the industry. “Basically, OCM and CAURD licenses were put on hold, which does a huge disservice to our community and to the entire New York State cannabis [industry] as a whole,” he stated. “Because there’s farmers, there’s people who are trying to get their businesses started, and now they’re putting all these people in this ecosystem in jeopardy. There’s millions and millions of dollars invested into building facilities, keeping your farms running, operational costs. And I think what this does is hurts a lot of progress that we were making.”
On the flip side, Franco expresses some human empathy for the veterans, noting, “I believe that they have a great argument, because veterans do need to get a fair shot at owning and operating and participating. I know New York is very much about social equity, which means we really need to support and build out the social equity dispensaries, but that same support and structure should also be given to veterans. I think we really have to look at what we’re creating, and ask ourselves, ‘Are we actually trying to be fair?’”
Though Franco admits he can’t predict what kind of settlement the case might arrive at, he nails down the most important point: “What I do know about anything legal is it takes a whole lot of time, and we ain’t got that time right now. So I think as adults and as people just understanding the time that we don’t have, we need to come to the table and have real intellectual discussions about what we’re creating. Because if we just continue to let this play out in court, who knows when everybody who just got a license can actually get their operation running? That’s not cool. That’s not fair.”
Finally, he takes the time to remind everyone what the Empire State’s legal cannabis space should really be focusing on. “My ideal dream for New York cannabis would be to have at least 250 stores open by December 29th. That’s it. I would love that. I love competition. I’ve been in New York my whole life. I was an athlete. I’m an artist. So competition is a good thing. We need more people to pop up. We need more brands to pop up. We need more growers growing. We just need more of this beautiful plant and this beautiful city.
The next hearing on CAURD licenses before Judge Kevin Bryant is scheduled for 10AM EST in Ulster County Supreme Court in Kingston, New York.
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Featured image: (C) Tingey Injury Law Firm