Ongoing New York Injunction Sparks Debate Over Retailers Eligible to Open

The court-ordered freeze on all marijuana retail licensing in New York is ongoing until further notice from Albany Supreme Court Judge Kevin Bryant, which led this week to a new dispute over which retail permitholders will be allowed to open for business under certain exemptions that Bryant put in place with a preliminary injunction he issued on Aug. 18.

On Tuesday, the New York Office of Cannabis Management submitted a list of 30 conditional adult use retail dispensary (CAURD) licensees that it asserted met all requirements for licensure under Bryant’s order, meaning that 410 licenseholders are stuck in limbo for now.

Two days later, attorneys for the four service-disabled military veteran plaintiffs filed a formal objection to eight of the 30, while an attorney for two other CAURD permit holders asked the court for an exemption from the injunction so they can open for business as well.

Two of the 30 CAURD licensees appear to not actually be fully legal, attorney Brian Burns wrote in a court filing for the plaintiffs. Burns asserted that Happy Days Dispensary Inc., which was identified by the OCM as eligible to open on Long Island, has a location in the town of Huntington, which Burns said has opted out of recreational marijuana sales. Since state law requires CAURD shops to only be located in towns that have opted into the marijuana trade, Happy Days should be prevented from opening, Burns argued.

The second at issue is a license issued to Michael D. Gant, Burns wrote, who reportedly plans to open a cannabis shop called Smiley Exotics. Since Gant’s proposed location in Manhattan is within less than 500 feet of the Epiphany School’s Early Childhood Center on 29th St., Burns wrote, that license should also be prohibited from opening.

Burns also requested that Bryant clarify his injunction to prohibit six of the 30 CAURD licensees that the OCM identified as eligible for delivery operations be barred from building out their physical storefront locations until the injunction is lifted.

“As to those six applicants with ‘Delivery’ licenses, OCM should not be permitted to continue processing their applications for a retail dispensary license (to the extent such applicants are seeking retail dispensary licensing) while the preliminary injunction remains in place,” Burns wrote in a court filing.

Also, attorney Jorge Vasquez, who represents another two CAURD licensees, petitioned the court to request his clients – Summit Canna and 82-J LLC – also be granted exemptions under the injunction so they can open their dispensaries.

Bryant didn’t issue an immediate ruling on any of the requests on injunction exemptions, or whether the list of 30 from the OCM would be allowed to open, but indicated early in Friday’s meeting that he intended to let most, if not all, of the 30 launch recreational cannabis sales. He also established in the injunction a case-by-case system for more such exemptions to be granted to CAURD licensees if they can prove they were ready and eligible to open prior to Aug. 7.

It’s also not clear yet how exactly the case will proceed; Burns and an attorney for the Coalition for Access to Safe and Regulated Cannabis (CARSC), which filed an earlier lawsuit in March alleging the CAURD program violated state law, raised the possibility of combining the two entwined lawsuits into one for the purposes of trial, but that’s an unsettled question. The original lawsuit from the four veterans, which was just filed this month, requested an injunction from Bryant specifically until the CARSC lawsuit was resolved.

The CARSC includes several of New York’s 10 licensed medical cannabis companies that are also multistate operators, including Acreage Holdings, Curaleaf, Green Thumb Industries and PharmaCann.

Also on Thursday, Deputy Attorney General Shannan Krasnokutski filed a notice with the court of the state’s intent to appeal the injunction to the Appellate Division of the Supreme Court for the Third Judicial Department.

Krasnokutski also said during the Friday court appearance that the final adult use cannabis regulations will be presented to the state Cannabis Control Board for approval during a meeting on Sept. 12. That may precipitate the likely opening of universal marijuana business applications being accepted starting as soon as Oct. 4, regulators have said previously.

Bryant set another meeting in the case for Sept. 15.