New York’s Adult-Use Market Set to Move Forward on Hundreds of Licenses

Hundreds of licensees will be allowed to move forward with opening adult-use cannabis stores in New York following the settlement of a pair of lawsuits filed over the state’s rocky recreational rollout.

Under the first settlement, a detailed timeline has been established for the transition of registered organizations (the term applied to medical operators in the state) to adult-use cannabis licenses.

The case involves a coalition of five medical cannabis companies:

• Curaleaf
• PharmaCann
• Green Thumb Industries
• Acreage Holdings
• iAnthus Capital Holdings Inc.

The companies, which had sued in March over the state’s licensing approach, will now be allowed to start selling recreational marijuana at designated locations in December, with further expansions permitted in June 2024.

While the state currently has 11 medical operators, the terms of the settlement only apply to the five companies involved in the lawsuit.

On or before Dec. 8, the Cannabis Control Board will host a meeting to consider the RO applications to transition their licenses for adult-use sales. At that meeting, the Office of Cannabis Management will be required to recommend approval for RO’s that have met all technical and deficiency-related requirements.

The CCB must authorize all approved “registered organizations with dispensing” (ROD) to open their first co-located adult-use dispensary by Dec. 29., and then on June 29, 2024, they will be permitted to open their second and third locations.

RO’s have a deadline of Dec. 6 to address any application deficiencies to receive approval for ROD licenses under the settlement.

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CAURD licenses

Separately, four service-disabled veterans – led by Carmine Fiore – who had also sued the state will each receive a license to operate an adult-use cannabis retail dispensary.

That settlement also lifted an August court order that stalled the issuance of more than 400 licenses under the Conditional Adult-Use Retail Dispensary (CAURD) program. The lawsuit originally challenged the constitutionality of the program, claiming it violated the separation of powers doctrine.

A preliminary injunction had been in place since August, when the challenge was first lodged against the state, halting the processing and approval of the licenses. The settlement effectively removes these barriers, allowing the program to proceed. It also includes a moratorium on new licenses.

Key aspects of the Fiore settlement include:

• The defendants will award one adult-use retail dispensary license to each plaintiff and take necessary steps to ensure their operational readiness, including compliance inspections.
• Initially, provisional licenses will be granted to each plaintiff with site protection for one location, based on submission of required documents like a letter of intent or lease.
• Upon meeting all requirements, plaintiffs will be awarded final adult use retail dispensary licenses. The defendants are obliged to review and notify the plaintiffs of license approval or deficiencies within five business days of application submission.
• The defendants agree not to issue new or additional provisional CAURD licenses until April 1, 2024, to focus resources on the current licensing window for adult-use licenses.
• The plaintiffs will have the opportunity to participate in all programs available to other social and economic equity applicants, including application support and business development services.

The settlement also includes initiatives to increase service-disabled veteran participation in the cannabis market and to conduct research into veterans’ health concerning cannabis.

The OCM opened the license application process to the public in October . The state expects to issue a number of licenses across various categories, including retail, microbusinesses, cultivators, processors, and distributors. That application window closes Dec. 18.

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