Government
Hire A New York Cannabis Attorney
If you are applying for an adult-use cannabis license in New York, please please please hire a New York cannabis attorney.
It doesn’t have to be be us, but it should be someone who is actually familiar with the licensing rules and regulations beyond just reading media headlines. We’ve written about it before (here, here and here). Unfortunately, we’ll likely write about it again. Picking the wrong attorney and following inaccurate advice can lead to the loss of time, money and the opportunity to obtain a license in New York’s cannabis industry (or any other state’s cannabis industry for that matter).
Licensing rules and regulations are dense. There are technicalities that make the difference between a license working for a potential applicant and being waste of time and money. The particular rule that makes a difference for an applicant may not be on the first page or the second page of a set of rules and regulations, or even something that’s referenced in official statements. That’s why really, really knowing each specific set of rules and regulations, and having a strong feel for administrative policies and behaviors, is critical to submitting a successful application.
The most recent trigger for our soapbox: the location options for New York’s Conditional Adult-Use Retail Dispensary (CAURD) license. For the last few weeks, we have received too many calls from prospective applicants, many of whom have already identified real estate for a non-conditional retail dispensary license, asking to submit a CAURD application. When asked about the CAURD’s apparent mandate that licensees accept a state-selected dispensary location, we are told that the prospective applicant has “heard” or “read”–or even “been advised”–that CAURD applicants can select their own dispensary locations.
We are confident that CAURD applicants cannot select their own dispensary locations, and any definitive guidance that they can is questionable, at best. Section 116.7(b)(6) of the CAURD regulations makes it a condition of licensure that the licensee “[accept] a dispensary location identified by the fund or office[.]”
The Office of Cannabis Management also published a very useful FAQ that all prospective applicants should read (and which we will write about), which provided as follows (emphasis added):
31. Can I choose where my CAURD licensed retail dispensary will be located?
Applicants who are selected will be assigned a retail dispensary location in one of the fourteen (14) geographic regions of NYS. When applying you will be asked to indicate which region(s) of the State you would prefer to be assigned a license in. You will be able to rank your top five (5) preferred regions. You will not be able to choose the specific street address or neighborhood for this dispensary. Provisional licensees will be able to share their preferences among the available locations in the region for which they have been selected.
If you would like to select your own site for a retail dispensary, the CAURD license may not be the right fit for you. Future adult-use retail dispensary licenses (and those for on-site consumption sites) will have more flexibility in allowing licensees to choose their own location.”
Which is not to say there is 100% certainty, because the OCM also published comments and responses for the CAURD regulations, and included this contradictory tidbit (emphasis added):
“COMMENT: Commenters requested clarification from the Office on the nature of agreements which applicants would be required to enter into as described in section 116.7(c)(6) of the proposed rules. Commenters requested clarification on what support would be offered by the New York Social Equity Cannabis Investment Fund and the specifics of that support, such as disbursement schedule, repayment rate, acceptable expenses, and tax repercussions of accepting support. Commenters noted that “financing with favorable terms” is difficult for cannabis businesses to secure and expressed a desire to obtain support from the Fund for costs beyond build-out of the dispensary. Commenters stated it was unclear what level of control the state would have over their business as a result of accepting this support. Commenters were concerned that the terms of agreements with the Fund would be unfavorable and that licensees would be trapped in predatory arrangements. Commenters expressed a desire to apply for licensure without receiving location assistance from the Fund. Commenters suggested that, before approving any agreements between licensees and the fund, the Board consult with the Chief Equity Officer and Cannabis Advisory Board to ensure the terms and conditions of the agreements promote equity.
RESPONSE: The proposed rules only require licensees to enter into agreements which have been approved by the Board and been made available by the Office. The proposed regulations do not insist upon applicants to use New York Social Equity Cannabis Investment Fund locations and provide for the allowance of an applicant to provide their own location that complies with the proposed regulations. The Office is working with the Fund to ensure that the location assignments are a benefit to all applicants to ensure their success. No changes have been made to the proposed regulations as a result of this comment.”
We expect to get some clarity from the OCM regarding the contradictory guidance, and will update this post as soon as we do. With that said, the disconnect between media reports (which do not and should not get into the gritty details of licensure) and the actual application process should not be a problem because prospective applicants should get legal advice on the actual rules and regulations before deciding to apply. That there is still so much misinformation given the prevalence of New York “cannabis” attorneys is disconcerting.
We’ve said it before and we’ll say it again: if you are planning on applying for a cannabis license, you don’t have to hire us, but you should hire a local, New York cannabis attorney who has more than passing knowledge of the applicable rules and regulations.
Source: https://harrisbricken.com/cannalawblog/hire-a-new-york-cannabis-attorney/
New Mexico regulators fined a cannabis operator nearly $300,000 and revoked its license after the company allegedly created fake reports in the state’s traceability software.
The New Mexico Cannabis Control Division (CCD) accused marijuana manufacturer and retailer Golden Roots of 11 violations, according to Albuquerque Business First.
Golden Roots operates the The Cannabis Revolution Dispensary.
The majority of the violations are related to the Albuquerque company’s improper use of BioTrack, which has been New Mexico’s track-and-trace vendor since 2015.
The CCD alleges Golden Roots reported marijuana production only two months after it had received its vertically integrated license, according to Albuquerque Business First.
Because cannabis takes longer than two months to be cultivated, the CCD was suspicious of the report.
After inspecting the company’s premises, the CCD alleged Golden Roots reported cultivation, transportation and sales in BioTrack but wasn’t able to provide officers who inspected the site evidence that the operator was cultivating cannabis.
In April, the CCD revoked Golden Roots’ license and issued a $10,000 fine, according to the news outlet.
The company requested a hearing, which the regulator scheduled for Sept. 1.
At the hearing, the CCD testified that the company’s dried-cannabis weights in BioTrack were suspicious because they didn’t seem to accurately reflect how much weight marijuana loses as it dries.
Company employees also poorly accounted for why they were making adjustments in the system of up to 24 pounds of cannabis, making comments such as “bad” or “mistake” in the software, Albuquerque Business First reported.
Golden Roots was fined $298,972.05 – the amount regulators allege the company made selling products that weren’t properly accounted for in BioTrack.
The CCD has been cracking down on cannabis operators accused of selling products procured from out-of-state or not grown legally:
- Regulators alleged in August that Albuquerque dispensary Sawmill Sweet Leaf sold out-of-state products and didn’t have a license for extraction.
- Paradise Exotics Distro lost its license in July after regulators alleged the company sold products made in California.
Golden Roots was the first alleged rulebreaker in New Mexico to be asked to pay a large fine.
Source: https://mjbizdaily.com/new-mexico-cannabis-operator-fined-loses-license-for-alleged-biotrack-fraud/
Four marijuana companies, including a multistate operator, have filed a lawsuit against U.S. Attorney General Merrick Garland in which they allege the federal MJ prohibition under the Controlled Substances Act is no longer constitutional.
According to the complaint, filed Thursday in U.S. District Court in Massachusetts, retailer Canna Provisions, Treevit delivery service CEO Gyasi Sellers, cultivator Wiseacre Farm and MSO Verano Holdings Corp. are all harmed by “the federal government’s unconstitutional ban on cultivating, manufacturing, distributing, or possessing intrastate marijuana.”
Verano is headquartered in Chicago but has operations in Massachusetts; the other three operators are based in Massachusetts.
The lawsuit seeks a ruling that the “Controlled Substances Act is unconstitutional as applied to the intrastate cultivation, manufacture, possession, and distribution of marijuana pursuant to state law.”
The companies want the case to go before the U.S. Supreme Court.
They hired prominent law firm Boies Schiller Flexner to represent them.
The New York-based firm’s principal is David Boies, whose former clients include Microsoft, former presidential candidate Al Gore and Elizabeth Holmes’ disgraced startup Theranos.
Similar challenges to the federal Controlled Substances Act (CSA) have failed.
One such challenge led to a landmark Supreme Court decision in 2005.
In Gonzalez vs. Raich, the highest court in the United States ruled in a 6-3 decision that the commerce clause of the U.S. Constitution gave Congress the power to outlaw marijuana federally, even though state laws allow the cultivation and sale of cannabis.
In the 18 years since that ruling, 23 states and the District of Columbia have legalized adult-use marijuana and the federal government has allowed a multibillion-dollar cannabis industry to thrive.
Since both Congress and the U.S. Department of Justice, currently headed by Garland, have declined to intervene in state-licensed marijuana markets, the key facts that led to the Supreme Court’s 2005 ruling “no longer apply,” Boies said in a statement Thursday.
“The Supreme Court has since made clear that the federal government lacks the authority to regulate purely intrastate commerce,” Boies said.
“Moreover, the facts on which those precedents are based are no longer true.”
Verano President Darren Weiss said in a statement the company is “prepared to bring this case all the way to the Supreme Court in order to align federal law with how Congress has acted for years.”
While the Biden administration’s push to reschedule marijuana would help solve marijuana operators’ federal tax woes, neither rescheduling nor modest Congressional reforms such as the SAFER Banking Act “solve the fundamental issue,” Weiss added.
“The application of the CSA to lawful state-run cannabis business is an unconstitutional overreach on state sovereignty that has led to decades of harm, failed businesses, lost jobs, and unsafe working conditions.”
Alabama regulators are targeting Dec. 1 to award the first batch of medical cannabis business licenses after the agency’s first two attempts were scrapped because of scoring errors and litigation.
The first licenses will be awarded to individual cultivators, delivery providers, processors, dispensaries and state testing labs, according to the Alabama Medical Cannabis Commission (AMCC).
Then, on Dec. 12, the AMCC will award licenses for vertically integrated operations, a designation set primarily for multistate operators.
Licenses are expected to be handed out 28 days after they have been awarded, so MMJ production could begin in early January, according to the Alabama Daily News.
That means MMJ products could be available for patients around early March, an AMCC spokesperson told the media outlet.
Regulators initially awarded 21 business licenses in June, only to void them after applicants alleged inconsistencies with how the applications were scored.
Then, in August, the state awarded 24 different licenses – 19 went to June recipients – only to reverse themselves again and scratch those licenses after spurned applicants filed lawsuits.
A state judge dismissed a lawsuit filed by Chicago-based MSO Verano Holdings Corp., but another lawsuit is pending.
Source: https://mjbizdaily.com/alabama-plans-to-award-medical-cannabis-licenses-dec-1/
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
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