Creation of Unauthorized CAURD Licensing Category Has Delayed or Denied Licenses for Hundreds of Qualified Applicants
On August 2, 2023, a complaint was filed in the New York Supreme Court seeking to reverse the state’s regression from bureaucratic oversight to bureaucratic overreach regarding the regulation of its adult-use cannabis market. Filed on behalf of four service-disabled veterans who planned to pursue adult-use dispensary licenses, the suit asserts they were unfairly prejudiced by the actions of the state’s Office of Cannabis Management (OCM) and Cannabis Control Board (CCB) when those agencies unconstitutionally assumed the Legislature’s role by supplanting their own social and economic policies for those of New York’s elected officials.
The complaint illustrates a common and concerning issue that has arisen in several East Coast states that have legalized recreational marijuana in recent years. Specifically, the institution of regulatory schemes of dubious legality that have delayed the creation and implementation of well-regulated and equitable cannabis markets as set forth in the legislation authorizing those markets. These transgressions have led authorities to spend their time and resources engaged in artificial and harmful enforcement actions against individuals simply attempting to avail themselves of legalization’s intended opportunities and benefits.
CAURD License Scheme Unauthorized by Legislature
In this case, the plaintiffs are challenging the OCM’s and CCB’s creation of an entirely new licensing category called the Conditional Adult-Use Retail Dispensary (the “CAURD”) license. As outlined in the complaint, those bodies improperly limited eligibility for this special, yet legally impermissible, license category to only “justice-involved individuals” who own a profitable “qualifying business.” Subsequently, they opened the adult-use retail dispensary application period for only those individuals that qualified as CAURD applicants. This action indefinitely postponed the licensing of hundreds of additional dispensaries necessary to satisfy consumer demand, including licenses the plaintiffs intended to seek.
Accordingly, the plaintiffs are asking the court to enter an order declaring OCM’s CAURD license an unconstitutional licensing category that violates New York’s Marihuana Regulation and Taxation Act and contravenes New York’s separation of powers doctrine. They also ask the court to indefinitely enjoin OCM and CCB from awarding or further processing any more CAURD licenses and/or authorizing any more CAURD licensees to open adult-use retail dispensaries.
On August 7, 2023, the court entered a temporary restraining order prohibiting OCM and CCB from awarding or further processing any more CAURD licenses and/or conferring operational approval upon any more provisional or existing CAURD licensees. The litigation remains pending.
Ansell’s dedicated Controlled Substances & Regulatory Law Practice Group has an in-depth understanding of the laws related to the production, sale, use, regulation, and legalization of controlled substances, including hemp, cannabis, and psychedelics. Controlled substances law remains a multifaceted and complex field with, at times, conflicting regulations from different governing bodies. Our attorneys are prepared to assist in all aspects of this emerging field. They are committed to helping our clients understand their rights and opportunities in this complex and evolving area of law. For additional information, please contact Joshua S. Bauchner at (973) 247-9000 or jbauchner@ansell.law.
