Business
NY Regulators Reach Settlement, Clearing Way for Pot Retail in Finger Lakes
The settlement stems from a lawsuit filed last year.
Regulators in New York said Tuesday that the state had reached a settlement with a Michigan cannabis business, clearing the way for the Empire State’s regulated marijuana industry to be fully implemented, specifically including the Finger Lakes region.
The five-member panel of the New York Cannabis Control Board unanimously approved the decision to settle with the Michigan-based Variscite NY One, Inc., which sued the state last year after being denied a cannabis retail license.
The ensuing lawsuit resulted in a court-ordered injunction in November that precluded the state of New York from issuing licenses to several regions, including Brooklyn.
In March, the same federal judge lifted parts of the injunction, which enabled the state to award 99 new licenses, including to Brooklyn, Mid-Hudson and other regions where licenses had been temporarily banned. But the injunction remained in effect in the Finger Lakes, which is currently the only region in New York where licenses have not been allocated.
But the vote on Tuesday by the Cannabis Control Board could change that.
The lawsuit was filed last year by Kenneth Gay, the owner of Variscite who has been previously convicted of a pot-related offense in Michigan.
New York announced last year that the first round of cannabis retail licenses would be awarded to individuals previously convicted of a marijuana offense or a family member of someone who had.
But Gay’s application was denied because his conviction occurred in Michigan, and New York regulators require license-holders to have “significant” ties to the Empire State.
Tuesday’s decision by the Cannabis Control Board must now be approved by a federal judge. If it is, it would officially end the “court injunction preventing the state from granting [Conditional Adult-Use Retail Dispensary] licenses to businesses in the Finger Lakes region,” and “would also guarantee an adult-use license for the plaintiff once general licensing begins,” according to Syracuse.com.
“We felt that we had strong ground on this; however, it is impeding CAURD licensees in that region,” said Cannabis Control Board member Reuben McDaniel, as quoted by Syracuse.com. “I’m very pleased that we’re considering this today … not because I think that this lawsuit has any merit, but our CAURD licensees need to be in the Finger Lakes, as well, getting to work.”
The outlet noted that most of the “details of the settlement will remain confidential until it is filed and approved in court later this week.”
The adult-use cannabis market launched in New York late last year with the opening of a store in Manhattan’s East Village neighborhood.
Other shops followed in Manhattan, and in March, the first legal cannabis retailer opened in the borough of Queens. (It was also the first woman-owned dispensary in the state.)
After the federal judge lifted part of the injunction earlier this year, the Cannabis Control Board announced in April that it had “granted at least one [Conditional Adult-Use Retail Dispensary, or “CAURD”] provisional license in each region other than the Finger Lakes, which remains blocked by the injunction.”
The board explained at the time that the 99 new licenses it had awarded “included four for Western New York, one for Central New York, five for Mid-Hudson, and three for Brooklyn, marking the first provisional licenses to be issued in these regions following last week’s modification of a court injunction that had prevented the Board from issuing them.”“We are proud of today’s approval of 99 CAURD provisional licenses, marking a vast expansion of the Seeding Opportunity Initiative as we continue to build an equitable market that offsets harms caused by cannabis prohibition and its disproportionate enforcement,” Tremaine Wright, the chair of the Cannabis Control Board, said in a statement at the time.
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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