Federal judge green lights New York marijuana licensing despite ‘disaster’ legal cannabis market rollout

A federal judge on Friday blocked efforts to stall New York’s marijuana licensing, as Gov. Kathy Hochul recently blasted the state’s legal cannabis market roll-out as a “disaster.” 

Northern District of New York Judge Anne Nardacci, who was appointed by President Biden, rejected the arguments of a pair of entrepreneurs who argued in a lawsuit that New York’s licensing rules unfairly discriminate against out-of-state residents in violation of the U.S. Constitution, according to Politico. Several state recreational cannabis programs have been challenged in federal court under the Dormant Commerce Clause, a constitutional doctrine that prevents states from passing legislation excessively burdening interstate commerce. 

The judge cited how thousands of cannabis entrepreneurs have made significant investments in seeking to win business licenses in New York, meaning more damage would come from stifling the roll-out of the state’s adult-use market. 

“The balance of equities tips in Defendants’ favor,” Nardacci wrote. “Defendants have laid out the significant harm Plaintiffs’ requested injunction would cause to New York’s adult use cannabis industry.”

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The Marijuana Regulation and Taxation Act, signed into law on March 31, 2021, legalized adult-use cannabis, or recreational marijuana, in New York State, for individuals ages 21 and older, and also prompted the removal or expunging of nearly 400,000 cannabis-related arrests and convictions.

Though the state’s cannabis market does not require New York residency, license applicants can be granted “extra priority” if they have a past cannabis conviction in New York state or meet other criteria. In the case before Nardacci, the plaintiffs said that stipulation demonstrates an unfair advantage for New York residents. 

In New York, thousands of illegal marijuana storefronts operate without a license, according to Politico. Meanwhile, fewer than 60 licensed dispensaries are open. 

In an interview with The Buffalo News editorial board last week, Hochul, a Democrat, criticized the state’s legal cannabis market roll-out.

“It’s a disaster,” Hochul, who inherited the state’s marijuana legalization law when she assumed office from Gov. Andrew Cuomo in August 2021, said. “I will not defend that for one second.”

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“You have to go back to the very beginning. Prior to my time, the legislation was crafted in a way that was not poised for success,” Hochul said, describing the law as without any “teeth.” 

Last week, the governor said she expected 400 retail and grower licenses to be reviewed by the Office of Cannabis Management Cannabis Control Board. 

Yet the board was ultimately only prepared to approve just three new retail locations. The slow-walking has resulted in unlicensed sellers freely and openly peddling pot, without paying taxes to the state and with little fear of consequences, according to The Buffalo News. 

 

“It’s not (on) every street corner,” Hochul said of unauthorized marijuana sales in New York City. “It is every other storefront. It is insane.”