Business
New Lawsuit Against New York Cannabis Agency Filed
A cannabis coalition is suing the New York Office of Cannabis Management for not following regulations set by the state’s adult-use cannabis law.
The New York-based Coalition for Access to Regulated & Safe Cannabis (CARSC) recently filed a lawsuit against the Office of Cannabis Management (OCM) on March 16. CARSC is an “unincorporated trade association” that includes a handful of organizations, including Acreage Holdings, PharmaCann, Green Thumb Industries, and Curaleaf, all of which sought to apply for a dispensary license in New York.
The lawsuit is requesting a judge to declare Conditional Adult-Use Retail Dispensary (CAURD) as unconstitutional, and state that the OCM and Cannabis Control Board (CCB) have overstepped their authority.
The lawsuit was filed with the Albany County Supreme Court by Feuerstein Kulick, claiming that the 2021 Marijuana Regulation and Taxation Act required both the OCM and CCB “the initial adult-use retail dispensary license application period … for all applicants at the same time.” Both agencies made the CAURD, which created a new license class, and allowed specific groups to apply for it, rather than “all applicants.”
“Rather than perform the tasks required by the MRTA—which would promote a safe and regulated cannabis industry for medical patients and adult-use consumers alike—CCB and OCM have improperly assumed the role of the Legislature to impose their own policies over those of New York’s elected officials and, by extension, their constituents,” the lawsuit states, according to Syracuse.com.
The lawsuit alleges that the CCB and OCM didn’t complete the requirements of the MRTA, and instead abused its power to create the CAURD. CAURD originated from New York Gov. Kathy Hochul’s Seeding Opportunity Initiative that was announced in March 2022, which “position individuals with prior cannabis-related criminal offenses” to earn one of 150 licenses, and an additional 25 to nonprofit organizations. It requires that an applicant must have been convicted of a cannabis crime in the state of New York, and also must have a “significant presence.”
The lawsuit alleges that a 20-month delay in proposed cannabis regulations is a violation of state law, among other evidence, including having cultivators grow thousands of pounds of cannabis without having retail businesses set up to sell it all.
In July 2022, OCM Executive Director Chris Alexander spoke with NY Cannabis Insider about the threat of a lawsuit such as this one. “I don’t have a concern about the challenge towards the retail opportunity, because the board has the power to create additional licenses,” Alexander said. “We think about legal challenges that may come to the program, but that’s why we stay as close to the law and the powers that law has given us as possible.”
One month before the CAURD application window ended in October 2022, a different lawsuit was filed that prevented the OCM from issuing licenses in five out of 14 areas: Finger Lakes, Central New York, Western New York, Mid-Hudson, and Brooklyn. The lawsuit alleges that CAURD violates the Dormant Commerce Clause, which “refers to the prohibition, implicit in the Commerce Clause, against states passing legislation that discriminates against or excessively burdens interstate commerce.”
Another lawsuit filed by Variscite NY One, a Michigan-based company, was denied a license because it is 51% owned by an individual who has no “significant presence” in New York, and has a cannabis conviction in Michigan, not New York.
Syracuse.com states that 66 CAURD licenses have been issued so far, with the CCB announcing in March that it plans to increase the pool of licenses to 300.
Sen. Jeremy Cooney, who co-sponsored the MRTA, addressed the concerns of the lawsuit in a statement to NY Cannabis Insider. “When we passed the MRTA, there was an understanding that the rollout of adult-use recreational cannabis and expansion of New York’s medical cannabis program would be complex, and encounter obstacles,” Cooney said. “While a potential lawsuit is undoubtedly a new challenge, we must not allow it to become a roadblock to progress. We must continue our efforts to deliver for operators, patients, and consumers as the legal process unfolds. We are committed to increasing patient access for the medical program and creating equity in the recreational market.”
Source: https://hightimes.com/news/new-lawsuit-against-new-york-cannabis-agency-filed/
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/
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