Breaking News; Dispensary Openings; Legal Wrangling; Cannabis Licensing – Rockland County Business Journal

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New Searchable DatabaseNew York Licensed Adult Use Dispensaries

(As of September 8, 2024)
***Denotes Delivery Only

New! Proximity Protected Location Map (From data.ny.gov)

Hemp Sellers Fight Back

September 2, 2024 – 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.

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’s 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.

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.

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’s 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.

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.

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’s relationship with their landlords and efforts to seize of the retailer’s financial accounts by labeling the lawful retailer a “criminal.”

Plaintiff’s charge: “Respondents’ Gestapo-like conduct cannot continue unabated.  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.  Without swift action by this Court, Respondents’ unconstitutional actions will continue in violation of fundamental constitutional rights, and Petitioners and many other licensed hemp retailers will suffer irreparable harm.  Judicial action is necessary to put an end to Respondents’ unconstitutional enforcement scheme.”

On Friday, the Court ordered the OCM and other defendants/respondents to appear in Court on September 13th and defend their tactics, effectively requiring the state to “show cause” why the hemp sellers should not get the relief they seek.

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.

Read the Court Complaint

Sales Tax Revenue Starts To Flow Back To Local Municipalities Where Cannabis Is Sold

August 24, 2024 – For all of the excitement over gross revenue, the flow of tax dollars to municipalities has been – well – slow.

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

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.

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.

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.

So, where is the money?

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’s about $23 million in cannabis taxes.

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.

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.

So, again, where’s the money?

(Map: Office of State Comptroller)

Anti-Cannabis Group Files Another Lawsuit Seeking To Undermine Cannabis Industry

August 6, 2024 – The Cannabis Impact Prevention Coalition and 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’s various programs supporting cannabis cultivation, distribution, distribution and other endeavors related to cannabis.

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.

The arguments raised focus around the state’s 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.

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 “caused, is now causing, or is about to cause a wrongful expenditure, misappropriation, misapplication, or any other illegal or unconstitutional disbursement of state funds.”

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.

This is not the first attempt by these plaintiffs to derail New York’s cannabis industry.  Last year, the group filed a federal lawsuit against New York and the state Office of Cannabis Management, alleging that the State’s Social Equity Fund was illegal.

Before that, the coalition filed suit to overturn MRTA alleging that the underlying claims supporting passage of MRTA and about cannabis were fraudulent.

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  whose mission is to prevent the social, health, public safety and environmental impacts of marijuana/cannabis.

Proximity Protection Upheld By Albany County Supreme Court

August 4, 2024 – 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.

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’s 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 too vague to pass constitutional muster, both as written and as applied.

In a well-reasoned opinion, the Court rejected those claims and denied GG the temporary relief it sought.

The Court addressed the merits of GG’s 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.

On the Home Rule argument, the Court found the rules promulgated by CCB were applicable statewide and did not infringe on a local jurisdiction’s 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.

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.  The Court found the proximity protection provision clear on its face. The Court considered plaintiff’s argument that not knowing what areas were protected at the time it applied to secure their preferred locations, 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.

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 – but the judge has made his views on the merits pretty clear.

Read the Court’s Order here.

Governor Hochul Has Bills Sitting On Her Desk That Could Help Stabilize New York’s Cannabis Industry

August 4, 2024 – Bills sitting on Governor Kathy Hochul’s desk could improve the economic prospects of participants in New York’s cannabis industry.

Several bills made it past both the Assembly and Senate and await signature, veto or lapse at year-end.

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.

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?

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.

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

So, what are stakeholders looking for?

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.

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.

The success of the CGS helped launch New York’s 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.

Advertising Rules Relaxed For Retail Cannabis Shops

July 14, 2024 – New York’s 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.

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.

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.

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.

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’s logo, name, and location address.

“New York’s packaging, labeling, and marketing regulations for cannabis are some of the most restrictive in the nation, making them incredibly challenging for brands, and we’re thankful the CCB acted (this week) to make at least some changes that will help brands in our state better compete,” said Mack Hueber, president of the Empire Cannabis Manufacturers Alliance, as reported in the Albany Times Union.

But he added that “far 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.”

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.

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.

Board Approves 109 Adult-Use Licenses, Bringing Total Adult-Use Licenses to 730 Issued in 2024 Thus Far

July 14, 2024 – At its last meeting on July 10th, the CCB authorized the issuance of 109 adult-use cannabis licenses spanning the supply chain, encompassing microbusinesses, cultivators, processors, distributors, and retail dispensaries.
The breakdown of the 109 license types approved today includes:

Adult-Use Cultivator License: 23
Adult-Use Distributor License: 20
Adult-Use Microbusiness License: 23
Adult-Use Processor License: 22
Adult-Use Retail Dispensary License: 21

58 out of the 109 are transitioning conditional cultivators or conditional processors.

For a complete list of the approved applications, click here.

IN BRIEF:

July 14, 2024 – A new analysis of violence between intimate partners concludes that legalizing marijuana for adult use “results in a substantial decrease in rates of intimate partner violence.”

The finding also indicate that recreational cannabis legalization “substantially impacts the relationship between heavy drinking” and intimate partner violence (IPV), possibly as the result of people substituting marijuana for alcohol.

Author Samantha Gene Baldwin, a Georgetown master of public policy student, wrote in the thesis that the findings are “surprising,” saying the links between recreational marijuana legalization (RML) and IPV “require careful consideration.”

Read the full story (Legalizing Marijuana Leads To ‘Substantial Decrease’ In Intimate Partner Violence, Study Shows) here:

Cannabis Control Board Approves 105 Adult-Use Licenses, Bringing Total Adult-Use Licenses to 654 Issued in 2024 Thus Far

June 14, 2024 – The New York State Cannabis Control Board (CCB) took substantial steps to advance the state’s cannabis regulatory framework during this month’s board meeting, addressing several key topics: license approvals, market updates, home grow regulations, and enforcement updates. The CCB authorized the issuance of 105 varied adult-use cannabis licenses spanning the supply chain, encompassing microbusinesses, cultivators, processors, distributors, and retail dispensaries. This move paves the way for entrepreneurs and businesses to enter the budding adult-use cannabis market, driving economic growth and fostering innovation.

“New York is building a robust and equitable legal market that is driving significant economic growth within our communities,” Governor Hochul said. “The issuance of 105 additional adult-use licenses is just the next step in developing the nation-leading industry New Yorkers expect and deserve.”

The breakdown of the 105 license types approved today includes:

Adult-Use Cultivator License: 25
Adult-Use Distributor License: 22
Adult-Use Microbusiness License: 22
Adult-Use Processor License: 19
Adult-Use Retail Dispensary License: 17
45 out of the 105 are transitioning AUCC or AUCPs

The CCB also issued denials to 100 applications at the board meeting. These applications either did not meet the eligibility for licensure or had already been issued an adult-use cannabis license from another application.

The Office of Cannabis Management announced that in May alone, sales surged by $4.4 million, reaching a total of $46.2 million, and with the month ending with a new weekly sales record of $12.5 million.

Projections show that 2024 cannabis sales will exceed $200 million by early June, underscoring the sector’s rapid expansion and growing consumer capture.

Another Lawsuit Challenging Cannabis Board’s Social Equity Program

May 19, 2024 – 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 “arbitrary and capricious” application of state law and that “and any and all licenses improperly granted pursuant to this program are invalid.”

The suit once again raises challenges to New York’s controversial Conditional Adult-Use Retail Dispensary (CAURD) program, which prioritized “justice-impacted” individuals who could demonstrate harm caused by the war on drugs.

In a lawsuit filed May 9 in state Supreme Court in Albany County against New York’s Cannabis Control Board and Office of Cannabis Management, four plaintiffs – Organic Blooms, Niagara Nugget, Blackmark and Windward Management – 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.

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..

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.

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.

Nearly all of the retail stores open in New York are CAURD licensees.

A copy of the lawsuit is available here.

Rescheduling Marijuana To Schedule III, What Does It Mean?

May 5, 2024 – 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).

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.

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

One positive business impact — marijuana firms can officially take federal tax deductions that they’ve been barred from under an Internal Revenue Service (IRS) code known as 280E.

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.

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.

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.

The rescheduling does not directly address another important issue to cannabis businesses – 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.

“While 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,” Senate Majority Leader Sen. Chuck Schumer of New York said in a statement. “Congress must do everything we can to end the federal prohibition on cannabis and address longstanding harms caused by the War on Drugs.”

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.

New Litigation Filed Challenging License Issuance Under OCM’s Queue System

May 5, 2024 – A Hudson Valley applicant seeking a marijuana cultivation and processor license is suing regulators in the latest legal challenge to alleged “priority” status in the state.

Tree Hill Innovations, operated by its majority owner, Marguerite Mikol of Saugerties, filed a petition claiming certain applicants were given “extra priority” by submitting up to three applications in a lottery designed to vet requests, according to a story in the Albany Times Union.

The lawsuit against the state’s Cannabis Control Board and Office of Cannabis Management alleges regulators changed licensing application rules last year in an “arbitrary and capricious” manner without informing the public.

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

“This 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,” Mikol wrote in court papers.

Mikol takes issue with allowing up to three duplicate applications to be submitted and says the change was made “without disclosing it to the public prior to the (second) application period … and suggests that it was established and implemented in an arbitrary and capricious manner.”

She also alleges that some applicants may have submitted more than three applications in the Office of Cannabis Management’s online queue to try and improve their chances of having one reviewed.

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’s regulatory authority and in excess of its jurisdiction.

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.

The Court has ordered OCM to “show cause” on June 7th in Albany why it should not grant the relief requested. The case has been assigned to Justice Justin Corcoran.

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.

Some of the litigation has stalled the rollout of the state’s cannabis program which Governor Kathy Hochul described as a “disaster.”

New York 2025 Budget Screws Growers, Replaces Potency Tax, Bolsters Local Law Enforcement, Eliminates State Share of Medical Excise Tax

April 21, 2024 – Maybe it’s just a disconnect. New 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’s $237 billion spending plan during negotiations.

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.

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.

Cannabis Farmers Alliance acting President Joseph Calderone said many cannabis farmers in the state are facing financial ruin. The CFA recently polled the state’s 289 licensed cannabis cultivators, and 97% of those who responded said they’re operating at a loss.

“The burden rate for our farmers is $300,000 a year,” Calderone said. “It’s really difficult to make business decisions.”

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’s share of the medical excise tax, keeping in place only the local tax share.

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.

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.

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 “customarily or habitually” engaged in selling cannabis without a license, rather than “solely or primarily” doing so.

The changes in the burden of proof are intended to eliminate a defense illegal sellers utilized to avoid closure and eviction – making it easier for landlords to remove unlicensed operators.

Court Tosses Regulations Banning Third-Party Platform Participation

April 7, 2024 – 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. In laymen’s terms, he basically said that OCM more or less “made up” regulations barring third party marketing firms from participating in New Yok’s legal cannabis market.

What third party marketers or platforms (TTPs) do is basically provide a sort of one-stop shop for cannabis information – 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’s database and mapping programs.

For reasons that were never articulated, or that were justified only after-the-fact, OCM’s 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’t accept (probably didn’t 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.

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.

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.

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.

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.

He said that there was a “complete lack of justification for the action in the record” and that the “regulations constituted impermissible restrictions” on Leafly’s right to free speech and that they were also unconstitutionally vague.

Lawsuit Challenges Regulations On Proximity Protection

April 7, 2024 – Perhaps OCM needs to hire some additional lawyers.

Last week, a suit was filed in Albany Supreme Court against New York’s 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.

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.

An attorney from Prince Lobel told that New York Law Journal: “Finding an invisible competitor, not knowing where they are located, and being told, ‘Too bad, you should’ve known’ is incomprehensible.”

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.”

The action also takes issue with regulators usurping local municipal planning and zoning by reserving the final say on location with OCM.

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.

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’s grant of proximity protection to other retailers.

Last month, OCM put out an interactive map designating current and pending storefronts.

Cannabis Farmers Relief Fund Proposed For New York Budget

March 20, 2024 – If the New York State Senate has its way with this year’s 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.

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.

The Cannabis Farmers Relief Fund will require proof of financial hardship before licensed cultivators and processors could access benefits.

Potency Tax Repeal Considered

March 20, 2024 – 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.

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.

COD List? What’s That About?

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.

Suppliers are also required to send a “Notice of Default” 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.

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.

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 CODReporting@ocm.ny.gov. The 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.

Powerhouse Pacific Legal Foundation Joins The Fray Challenging New York’s SEE Licensing Preferences

March 11, 2024 – January’s lawsuit by Jamesville, New York’s Valencia, AG LLC was largely minimized (and sometimes laughed at) by New York’s Cannabis Bar – the commentaries of experts who predict the outcomes of every lawsuit, even though most have been resolved by settlement and not litigation.

Valencia’s 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 “males of light pigmentation who might best be described as Caucasian or white men.” 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.

In OCM’s randomized hierarchy for reviewing applications, Valencia ranked 2,042 out of what was supposed to be 2,200 “operationally-ready” applicants and knew he had no chance of having his application reviewed or receiving a coveted license.

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.

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.

Valencia’s 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.

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.

Then, a funny thing happened on the way to the courthouse.

On February 29, 2024, Valencia’s local counsel got some help. Two attorneys from the Pacific Legal Foundation (PLF) entered appearances as co-counsel on plaintiff’s behalf. On Friday, the team from PLF asked to have the Motion For A Temporary Injunction taken off the Court calendar.

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.

Its practice has been focused lately on challenging race-based preferences. It filed a lawsuit last month challenged Alabama’s 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.

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.

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.

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’s SEE policies in granting cannabis licensing preferences.

This is now the case to watch.

Potency Tax Repeal?

March 11, 2024 – New York’s controversial “potency tax” 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.

According to the Albany Times Union, sources in the Senate and Assembly said their “one-house” 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.

Governor Hochul’s 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.

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.

Whatever the ultimate tax rate, it seems that the potency tax is on the way out.

Will (And When Will) Cannabis Events Take The Place Of Growers’ Showcases?

March 11, 2024 – We may have to wait some time for the release of regulations governing the reincarnation of Growers’ 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.

Growers’ Showcases were instrumental in relieving the backlog of product in cultivators’ inventories late last year when there were only a handful of open licensed dispensaries and dozens of showcases operating.

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’s guess right now, but any opportunity for increased sales will presumably be welcome especially in those areas of the state with minimal retail options.

Opportunity Knocks! Community Reinvestment Grant Funding

March 4, 2024 – Last week, we explained that after the costs of administering 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).

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.

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

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.

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.

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.

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.

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:

Mid-April: Public 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/) to receive updated notifications on available opportunities. Nonprofit organizations must also be prequalified to receive awards and may visit https://grantsmanagement.ny.gov/get-prequalified to learn more about registering early.
Early June: Goal to release the RFA, allowing applicants to start the application process.
October 1st: Projected deadline for applicants to submit their applications.
November/December: Anticipated Announcement of the awardees, culminating the selection process for community-based nonprofits and local governments.

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’s sales won’t reach community-based organizations until early 2025 — at best.

New York awards 110 more adult-use marijuana business licenses

February 18, 2024 – It’s the event that we’ve 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.

The approvals mark the first round of non-conditional licenses issued by the state.

On Friday, the governor celebrated the board’s issuance of non-conditional licenses.

“Adult-use cannabis is a growing industry in New York that will help local economies across the state,” she said. “The 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.”

[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.]

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.

For a complete list of licensees, click here.

2100 applications were received in the last round for what has been announced to be 250 licenses.

Some good news: New York retailers have recorded at least $174 million in legal cannabis sales, according to OCM figures released Friday.

New York Regulators Approve Marijuana Home Grown Rules

February 18, 2024 – Rolled over from the canceled meeting last month was consideration of rules allowing the home cultivation of recreational marijuana. At last week’s meeting, proposed rules were approved, but the approved resolution also starts a 60-day public comment period before the rules are finalized.

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.

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.

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.

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.

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.

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.

Landlords May Face Civil Forfeiture Of Real Property For Allowing Illicit Retail Operators

February 18,2024 – Readers of this newsletter know that we’ve been advocating for an amendment to the MRTA that would allow “in rem” 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.

Last week, an Assembly bill was sent to the Economic Development Committee for review. The bill is titled, “The SMOKEOUT Act, (Stop Marijuana Over-Proliferation  And Keep Empty Operators of Unlicensed Transactions” (Okay, doesn’t really flow off the tongue).

The SMOKEOUT Act does just that – 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.

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 “smoke shop” and “paraphernalia” 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?

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.

The Senate version of the SMOKEOUT bill is currently in Investigations and Government Operations Committee.

New Lawsuit Challenges Licensing and Fee Schedule Advantages For Women and Minorities; Claims White Men Denied Equal Protection

January 25, 2024 – 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 “males of light pigmentation who might best be described as Caucasian or white men,” 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.

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.

In January, when OCM published it list of the hierarchy of applicants based on the “randomized,” but prioritized and weighted selection of applicants, plaintiff ranked 2,042 out of about 2,200 “operationally-ready” applicants. Based on statements made by OCM, plaintiff believes it is unlikely that it will have its application reviewed or receive a license.

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.

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.

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

New Jersey Opens Doors To Cannabis Lounges – Sets Rules

January 28, 2024 – New Jersey Cannabis Regulatory Commission (NJ-CRC) finalized regulations to allow marijuana consumption lounges statewide. The regs are set to be published next month.

Here’s how the “social use” licenses will work:

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;
A consumption area must be attached to a dispensary, customers must be at least 21 or older;
Food trucks will be allowed, if provided for in the local municipal code;
Medical cannabis patients would be able to bring their own marijuana products;
A business would be limited to owning one social use license;
Microbusinesses would pay a $1,000 fee for a “consumption area endorsement” and standard businesses would pay $5,000;
The application process hasn’t opened yet, but according to NJ-CRC Chief Counsel Christopher Riggs, the application portal for prospective licensees will open soon; and
There will also be an exclusivity period (length of time unknown) for social equity and diversity licensees before other social use licenses will be awarded.

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.

OCM Establishes A Randomized Queue For Reviewing Adult-Use License Applications

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

According to OCM, “The random queuing process was audited by an independent third-party to ensure it was random and unbiased.

Keep in mind that the queue order doesn’t indicate that order in which licenses will be issued, if at all, just the order in which the applications will be reviewed.

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

Hochul Vetoed Law Allowing Growers To Sell Surplus To Tribal Retailers

January 15, 2024 – 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.

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.

With the continue, but slow rollout of licensed dispensaries, growers will have additional outlets to sell inventory. But with sunsetting of Growers’ 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.

Multistate Operators Slow To Take The $5 Million Plunge

January 15, 2024 – PharmaCann is the only medical operator to open a co-located store in the state.
Although six cannabis multistate operators were approved by New York regulators to open retail shops, only one has so far taken the plunge.

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.

The other five MSO’s 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.

To open, MSOs will have to pay $5 million to the state for new adult-use cannabis retail locations. Each retail licensee – including the multistate operators – will ultimately be allocated three locations.

Speculation is that until New York’s illicit market is tamed, the $5 million entry fee makes the New York retail market less appealing.

Here’s The Skinny On Cannabis in New York State

January 7, 2023 – OCM issued its 2023 Annual Report. Here are some highlights:

Adult-Use sales are expected to top $150 Million in 2023, with $137 million recorded as of December 9th.
The state has 46 operational adult-use dispensaries opened and operating.
State 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.
The 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.
OCM officials has released a map that identifies the communities deemed disproportionately impacted by past cannabis enforcement (Loads Slowly). Approximately 25% of New York’s population experienced 75% of the arrests over the last four decades.
The 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.
The OCM’s 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.
Regulators 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.
The 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.
Regarding New York’s medical cannabis program, the state has more than 121,900 registered patients.
Officials 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.
Dispensary sales rose month by month throughout 2023. Adult-use cannabis sales grew from $2.2 million in January to $18.8 million in November.
Adult-use dispensaries carry roughly 550 locally grown strains.

End Of A Good Thing — Cannabis Growers Showcases Sunset December 31st

December 11, 2023 – New York’s Office of Cannabis Management made an unexpected announcement on Friday and dealt a fatal blow to the state’s small contingent of craft growers who received a lifeline through Cannabis Growers’ Showcases (CGS).

OCM announced the successful Cannabis Growers Showcase program would be scrapped by year-end – over the objections and contrary to the wishes of cultivators.

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’s 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.

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.

“There’s not enough distribution for small farmers,” Wyatt Harms, the co-founder and CEO of Brooklyn-based pre-roll brand Flamer, told MJBizDaily. He added “that many invested their life savings into legal marijuana. I don’t know why you would stop a program that is providing at least some relief to the farmers.”

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

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

Two New Retail Dispensaries Open In Capital Region

On Friday, the Office of Cannabis Management said 31 adult-use stores are now open statewide.

Two newly opened retail dispensaries in the Capital Region include:

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.

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.

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.

Six New Registered Organizations (Multi-State Operators) Receive CCB Approval

The CCB, at its meeting Friday, approved the following six registered organizations for adult use retailing:

Columbia Care NY, whose parent is New York-based MSO The Cannabist Co.
Curaleaf NY, part of New York-headquartered MSO Curaleaf Holdings.
Etain Health, owned by RIV Capital, a Toronto-based investment firm.
NYCanna, part of New York-headquartered MSO Acreage Holdings.
PharmaCann of New York, whose parent is Chicago-based MSO PharmaCann.
Valley Agriceuticals, whose parent is Chicago-headquartered MSO Cresco Labs.

In June, New York’s 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’s 10 vertically integrated medical marijuana providers.

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.

Other states, like Maryland’s relatively recent launch of adult cannabis, allowed ROs/MSOs access on day one of opening the adult market without incident.

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.

The ROs should open their doors to adult-use retail sales on or around December 29th.

Stipulation And Order Of Settlement Submitted To Court – Clock Starts On Acceptance

November 28, 2023 – The long-awaited “Stipulation And Order Of Settlement And Dismissal” 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.

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.

No consideration is given for a modification of the terms of the injunction – 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.

The Stipulation settles all of the claims between the parties, with each side paying its own costs and attorney’s 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  allow each plaintiff to become “fully operational.” Each plaintiff will also get “site protection” for the sites submitted.

Part of the bargain struck precludes OCM from issuing and “new or additional provisional” CAURD licenses until April 1, 2024, purportedly to allow OCM to focus and dedicate itself to process the pending applications and licenses.

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.

And, to prevent similarly situated potential plaintiffs from relying on this settlement to secure their own licenses, the language declares the settlement has no “precedential value” and not binding beyond this agreement.

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.

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?

Justice Bryant issued the temporary injunction because the implementation of the awarding of licenses ran afoul of the law – not just for the four plaintiffs, but for any applicant similarly situated. Yes, it’s true that there was no effort to establish a “class” 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’t. Justice Bryant said it wasn’t.

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.

View the Stipulation and Order Of Settlement and Dismissal here.

Find a Cannabis Growers’ Showcase Near You (As of December 2, 2023)

“Settlement In Principle” Reached In Disabled Veterans’ Litigation

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’s 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.  Stay tuned…..

New Regulations From CCB Seek To Offer Clarity On General Non-Conditional Licensing

September 18, 2023 – 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’s cannabis industry.

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 – both of whom claim that the CCB’s rollout was in contravention of the plain language of the enabling law.

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.

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.

The new rules also offer some clarity on priority licensing for social equity and economic equity applicants and include distressed farmers.

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.

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

Pending will be additional guidance on completing applications and qualifying as a social and economic  equity applicant.

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

The regulations do not contemplate a cap on the number of dispensary licenses, though the New York Times recently referred to analysts who estimate up to 2000 dispensaries would be necessary to handle consumer demand.

One category missing from the new regulations is guidance on consumption lounges.

Not all commentators at last week’s 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.

Feds Consider Rescheduling Marijuana From Schedule I To Schedule III

Change would affect taxes, but not access to institutional banking.

September 8, 2023 – The Health and Human Services Department has recommended moving marijuana from a “Schedule I” drug to “Schedule 3” essentially reclassifying cannabis from a category of drugs deemed to have “no currently accepted medical use and a high potential for abuse” to a less regulated, but still controlled category.

No action has yet to be taken, and the decision will be made in conjunction with the Drug Enforcement Administration. A lengthy and public review process would follow, including opening a public comment period.

Schedule I drugs include heroin, quaaludes and LSD.

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.

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’t pay income taxes have an unfair advantage over licensed sellers.

The ban against deducting business expenses doesn’t apply to Schedule III drugs, so the proposed change would cut dispensaries’ taxes substantially and level the playing field against illegal and unlicensed competitors.

That said, the reclassification from Schedule I to III doesn’t change the federal rules regarding banking where federal regulations deny dispensaries access to institutional banking. Those changes won’t come until the SAFE Banking Act passes in one form or another.

National Organization for the Reform of Marijuana Laws Deputy Director Paul Armentano said that reclassifying marijuana would be “perpetuating the existing divide between state and federal marijuana policies.”

Minority Cannabis Business Association President Kaliko Castille said rescheduling just ”re-brands prohibition.”

“Schedule 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,” Castille said.

Change comes slowly and in incremental steps.

Yet Another Lawsuit Seeks to Undermine New York’s Fledgling Cannabis Industry

Coalition equates state funding with money laundering.

September 8, 2023 – Not everyone is happy that recreational cannabis has been legalized in New York State.

Anti-cannabis groups — the Cannabis Impact Prevention Coalition and the Cannabis Industry Victims Seeking Justice, along with several individual plaintiffs – filed suit in federal court in Albany charging that New York’s $200 million dollar, state-established fund supporting social equity licensees is essentially “money laundering”.

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.

The suit takes a clever approach to shutting down New York’s 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’s status as a Schedule 1 narcotic.

“It is unlawful to knowingly open, lease, rent, maintain, or use property for the manufacturing, storing, or distribution of controlled substances,” the lawsuit claims. “DASNY normally finances, designs, and builds health and education infrastructure. Ironically, DASNY would instead become the biggest marijuana trafficking landlord in New York.”

“The taxes that the state collects from marijuana sales are the proceeds of marijuana trafficking,” the lawsuit states. “The fact that the state collects these proceeds as taxes does not magically cleanse them of their illegality.”

This is the second lawsuit filed by the coalition seeking to undermine New York’s legalization laws. The earlier suit was based on federal preemption, arguing that federal law making marijuana illegal trumps state laws that legalize it.

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.

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.

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.

Let’s just say that lawyers representing New York State, CCB and OCM have a lot of work to do to save what’s left of New York’s entry into the recreational marijuana market.

Court Reverses Itself And Shuts Down Any New Openings Of Dispensaries Pending Truthful Submission From Cannabis Control Board

September 1, 2023 – It seems like only last week (that’s 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.

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’s most recent affidavit in the case admitted that “not all thirty applicants have met all licensing requirement” despite Justice Bryant’s clear instruction that only those licensees that “met all of the requirements for licensing, including but not limited to site plan approval from the CCB and where applicable  from local municipalities” be submitted.

Something must have gotten lost in the translation, because despite further submissions by the CCB, Justice Bryant said that the additional information “still does not provide the clarity that is necessary for this Court to determine whether-or-not a particular licensee should be exempt.”

Bryant described the submission under oath by the CCB as containing “contradictory and confusing assertions that leave significant  questions as to whether the licensees on the list have actually me all requirement.” What was not clear to the Court was whether any of the thirty identified licensees are actually fully approved and compliant with the Court’s order.

Based on clear frustration with the CCB’s submissions, Bryant re-imposed the preliminary injunction against all licensees and granted no exemptions — meaning no licensee may open until the CCB provides clear and unambiguous information regarding full approval, including site plan approval.

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 — the four disabled veterans who have been denied access to license applications — objected to the individual submissions as unnecessary, encompassed by CCB’s submissions, and a potential cause of unnecessarily complicating the litigation.

Justice Bryant was as clear as he could be in his earlier ruling: the CCB illegally preferred “justice” 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.

Another hearing is set for September 15th.

Court Allows 23 New Retail Licensees To Open; Holds Off On Seven Contested Applications; Halts Hundreds Of Pending Applications.

August 28, 2023 – State Supreme Court Justice Kevin Bryant is unambiguous about his ruling — New York State illegally preferred “justice” 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.

In fact, Justice Bryant basically felt the entire licensing process used by CCB/OCM was flawed as the state legislature never 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 “overreach” and an illegal “creation:of the CCB/OCM.

Despite these flaws, Bryant recognized that disrupting the 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.

Of those 30, only seven were challenged — mostly delivery-only locations and one where it was unclear it the site selected was suitable — 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.

The 30 licensees submitted to the Court were:

Another hearing is set for September 15th.

New York’s First Round Of Approved Cannabis Growers’ Showcases

August 21, 2023 – New York State has approved several Growers’ Showcases to help ease the accumulation of inventory for growers with limited venues for selling, and to give licensed retailers a financial boost.

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 here.

Judge Extends Temporary Marijuana Licensing Shutdown For Two More Weeks

August 11, 2023 – As it stands, drug felons have a preference over disabled veterans in New York’s 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.

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’s drug laws.

On the other side, a group of four disabled veterans read the language of New York’s Marijuana Regulation and Taxation Act’s social equity provisions as putting them on the same ground as justice-affected applicants. They say the law does not give one “social equity” group – justice affected individuals — a higher standing or preference over any other “social equity” group, including disabled veterans.

In a preliminary injunction issued last Monday, the Court agreed with the disabled veterans.

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.

According to papers filed in the case, marijuana retail license applications will open for all applicants on October 4th.

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

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’s program illegally favored in-state applicants over out-of-state applicants in contravention of the U.S. Constitution’s Commerce Clause.

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.

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.

All bets are on a settlement, as OCM gets ready to open applications to more groups this fall.

212 New Conditional Adult Use Retail License Issued Statewide; 18 More In Mid-Hudson Region

The Cannabis Control Board voted Wednesday to approve 212 additional CAURD retail licenses.

Licenses were awarded to 46 applicants in Manhattan, 44 in Brooklyn, 28 in the Capital Region, 24 on Long Island, 18 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.

The eighteen new licensees in the Mid-Hudson are:

It marks another, but unexpected, expansion of the state’s 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.

“This expansion is necessary to help prepare New York’s market for the next phase of adult-use cannabis,” Office of Cannabis Management Executive Director Chris Alexander said at Wednesday’s meeting. “The 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.”

Licensees must still secure retail locations and submit plans for approval to OCM.

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.

“The provisional approval of today’s 212 CAURD licenses by the Cannabis Control Board marks a momentous leap forward in our pursuit of an inclusive and fair cannabis industry,” Cannabis Control Board chair Tremaine Wright said in a statement Wednesday. “These licensees are demonstrative of the innovation and diversity of New York state.”

Of the 463 licenses, only 20 legal dispensaries are open across New York.

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.

For a complete list of new licensees, sorted by region, click here.

New York Expands Conditional Licenses to 300

Applicants with a family history of marijuana convictions will soon be eligible to open dispensaries with conditional licenses.

March 6, 2023 – 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.

“As we’ve continued to review applications we found there’s still many qualified individuals who can make the most of this opportunity outside of that initial 150,” Chris Alexander, executive director of the Office of Cannabis Management, said at the most recent meeting of the Cannabis Control Board.

There were originally about 900 applicants for conditional licenses, with 150 granted.

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.

The actual increase in license opportunities will be in line with the original geographic awards, largely based on populations within the different established regions.

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’s 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’s policy prioritizing the awarding of licenses to in-state residents.

Efforts to modify or lift the injunction fell on deaf ears in the District Court. The 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.

What To Do With All That Weed?

February 27, 2023 – In its first harvest, in what some would call an “upstate cultivation boom” 300,000 pounds of weed were produced, valued at three-quarters of a billion dollars.

Here’s 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’s today’s 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.

And, there are only a handful of state-licensed dispensaries with open doors and delivery services are nascent. So, what’s going to become of all of that product. Lines at open dispensaries snake around the blocks where they are located – some with “bouncers” to moderate the crowd. How many new retailers are ready to open?

So where will all of that product go? What about all of that tax revenue that the state touted?

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’s up New York?

What can be done to get the dispensaries open a bit faster?What about roadside “pick-your-own” 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?

Retail licenses to secure a warehouse from which to fulfill delivery orders while building permanent dispensary locations for up to one year;
Customers to place online and phone only; no in-person sales or pick-up from the warehouse location;
Customers must pre-pay; no cash payments from cannabis consumer to delivery employee permitted;
Deliveries can be made by bicycles, scooters, motor vehicles;
Consumers must be at least 21-years-old with valid identification upon sale and delivery;
Businesses can have up to 25 delivery staff per business, as dictated by New York state cannabis law.

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.

Rockland Opt-In, Opt-Outs
Towns

Town
Opt-In
Opt-Out

Clarkstown

Haverstraw

Orangetown

Ramapo

Stony Point

Villages

Villages

Opt-In

Opt-Out

Airmont

Dispensaries

Lounges

Chestnut Ridge

Dispensaries

Lounges

Village of Haverstraw

Hillburn

Nyack

Dispensaries

Lounges

Piermont

Dispensaries

Lounges

Pomona

Sloatsburg

Spring Valley

Suffern

Wesley Hills

West Haverstraw

Marijuana Opt-Out Tracker – Brought To Us By The Rockefeller Institute

December 7, 2021 – For an easy to use and up-to-date presentation of New York’s villages’ and towns’ decisions on dispensaries and consumption lounges, check out the Marijuana Opt-Out Tracker by the Rockefeller Institute.

JP Morgan Chase Restricts Trading on Cannabis Stocks

November 3, 2021 – According to Reuters 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.

Other banks, including Credit Suisse have similarly limited its clients’ abilities to execute transactions or have it hold shares for clients in cannabis-related companies with U.S. operations.

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 “direct nexus to marijuana-related activities.”

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.

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.

“JPMorgan’s move to block its customers from buying securities in fully legal, regulated cannabis companies is beyond disappointing,” U.S. Cannabis Council CEO Steven Hawkins said in a public statement following the news. “Publicly-traded cannabis companies operate entirely within the law, and the industry is poised for tremendous growth. JPMorgan’s new policy is regressive and at odds with the majority of Americans, who want legal, regulated cannabis. What’s more, it’s 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.”

Nyack Village Board Defers Decision on Cannabis Opt-Out Until November 18, 2021

October 29, 2021 – 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.

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.

Gifting of Marijuana Illegal in New York If Part of Another Transaction

October 26, 2021 – 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:

“As 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.

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 (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.”

The statements were in response to numerous stories of vendors coupling “gifted” marijuana with sales of over-priced items, under the guise that the marijuana was not actually sold. Wright’s statement likely does not have the force of law. For a full transcript of the meeting, click here.

Town of Ramapo Considers Opting Out of Retail Dispensaries and On-Site Consumption Lounges

October 28, 2021 (UPDATE) – Decision deferred to November 10, 2021 Town Board Meeting
October 26, 2021 – 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’s 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.

New Workplace Guidance Issued By New York State Department of Labor

October 21, 2021 – 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’s use of cannabis outside of the workplace, outside of work hours, and without use of the employer’s equipment or property.

PERMITTED EMPLOYER ACTIONS

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:
• An employer is/was required to take such action by state or federal statute, regulation, or ordinance, or
other state or federal governmental mandate
• The employer would be in violation of federal law
• The employer would lose a federal contract or federal funding
• The employee, while working, manifests specific articulable symptoms of cannabis impairment that decrease or lessen the employee’s performance of the employee’s tasks or duties
• The employee, while working, manifests specific articulable symptoms of cannabis impairment that interfere with the employer’s obligation to provide a safe and healthy workplace as required by state and federal workplace safety laws

Detailed workplace policies are outlined in the DOL Guidance, 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.

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.

New York Municipalities Continue to Opt Out of Recreational Marijuana Dispensaries and Lounges

October 7, 2021 – 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.