New York’s troubled adult-use cannabis program has hit yet another legal roadblock after a state judge barred regulators from processing business applications.
The latest in an increasingly extensive list of legal action against the state’s cannabis regulator, the Office of Cannabis Management (OCM) has been temporarily barred from processing thousands of pending license applications, including some 340 Conditional Adult Use Retail Dispensary (CAURD) applicants.
It relates to a lawsuit filed in May by four companies – Organic Blooms LLC, Niagra Nugget LLC, Blackmark LLC, and Windward Management LLC, which accused the OCM of overstepping its authority by waiving key requirements for early CAURD applicants.
Specifically, the plaintiffs argue that the OCM allowed CAURD applicants to submit applications without securing retail locations and notifying local municipalities, as mandated by the state’s 2021 cannabis law. The court agreed, finding that the OCM’s waiver of these requirements likely violated state law.
The temporary restraining order has left many in the industry reeling, with business owner expressing disappointment and frustration with the ruling.
The ruling’s impact is far-reaching, affecting not only the 340 CAURD applications but also an unknown number of provisional license seekers who submitted applications in December 2023.
The New York cannabis market is already struggling to gain traction, with approximately 1,799 retail applications from November’s window and 3,789 from December’s window remaining unprocessed. The average monthly revenue per dispensary has declined significantly, with about 60% of stores tracking below $1 million in annual revenue. This latest setback may exacerbate the issue, leading to further market saturation and financial burdens for license holders.
The litigation is ongoing, with a scheduling conference set for December 18 to determine next steps.
