Business
New York court keeps order blocking new adult-use cannabis retail licenses
The court order blocking new entries into New York’s struggling adult-use cannabis market remained in force after a Friday hearing in Ulster County Supreme Court – despite a new appeal filed by the state attorney general to lift the stay.
However, 30 applicants who filed for their permits in time might be able to open for business.
Several hundred more would-be recreational marijuana entrepreneurs, including both small businesses and major multistate marijuana operators, must wait at least a few more weeks to see how an ongoing legal challenge to the state’s Conditional Adult Use Recreational Dispensary (CAURD) program plays out.
The latest kink in the rollout of New York’s legal marijuana market started Aug. 2, when a group of four service-disabled military veterans sued the Office of Cannabis Management (OCM) and the Cannabis Control Board, alleging the CUARD program is unconstitutional.
The veterans claim they want to open dispensaries across the state, including in Manhattan and Queens.
But because they are not “justice impacted individuals” with a qualifying arrest, they do not meet the criteria for a CUARD license.
As of Friday, only 23 licensed adult-use stores are open for business in the entire state, according to the OCM. Of those, five are delivery-only.
Separately, a lawsuit brought by a group of MSOs calling themselves the Coalition for Access to Regulated and Safe Cannabis (CARSC) remains pending.
An Aug. 18 injunction on granting any new licenses, imposed by Supreme Court Judge Kevin Bryant, remains in place.
In that hearing, Bryant declared the CUARD program in “legal jeopardy.”
The judge said it’s likely that a final ruling will find the CUARD program violated the state’s March 2021 marijuana legalization law and that the OCM’s refusal to award licenses to the defendants likely caused “irreparable harm.”
More arguments are scheduled for Sept. 15.
Separately, the state formally appealed Bryant’s injunction in an Aug. 24 court filing.
The injunction does not apply to anyone who’d completed most of the process by Aug. 7.
The state on Tuesday released a list of 30 would-be retail operators who met that criteria.
During a roughly 35-minute court appearance on Friday, attorneys for the plaintiffs argued for the release of documents that would outline the state’s enforcement strategy against the estimated 2,000 illicit cannabis sellers currently operating in the state.
The plaintiffs also objected to several of the 30 licenses identified as sufficiently in-progress by Aug. 7.
One is in a town that has banned dispensaries, another is too close to a school and six are delivery-only and should not be allowed to operate temporary brick-and-mortar retail locations, they argued.
Bryant took no immediate action on the plaintiffs’ objection.
Attorneys for other retail applicants who argued their clients should not be subject to the injunction have until Sept. 5 to make their case, Bryant also ruled.
Source: https://mjbizdaily.com/new-york-court-keeps-order-blocking-new-adult-use-marijuana-retail-licenses/
Business
New Mexico cannabis operator fined, loses license for alleged BioTrack fraud
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/
Business
Marijuana companies suing US attorney general in federal prohibition challenge
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.”
Business
Alabama to make another attempt Dec. 1 to award medical cannabis licenses
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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