Herb Report: New York’s State Judge Halts Cannabis Applications

Journal

Jan 24

Written By Damian Nicholas

The ruling arises from a lawsuit claiming that the OCM unfairly favored CAURD applications.

Cannabis | Herb Report

Words by Damian Nicholas

FRASSPOT

New York’s adult-use cannabis program is facing another significant hurdle as a state judge has paused the processing of thousands of business applications. On Thursday, Albany County Supreme Court Judge Sharon Graf issued a temporary restraining order that halts the Office of Cannabis Management (OCM) from granting certain applications. As a result, the OCM is temporarily barred from processing all provisional adult-use retail dispensary applications that did not submit proof of a “municipally noticed secured location” by November 17, 2023.

This ruling has the potential to impact a vast number of applications, with Judge Graf highlighting that around 340 Conditional Adult-Use Retail Dispensary (CAURD) applications are still awaiting a decision from the OCM. There are also concerns about an undetermined number of the 3,189 applications received in December 2023 that aimed for provisional permits. The OCM is required to respond by December 18, according to the court’s order.

This development adds to a series of challenges that have plagued New York’s CAURD program, which was designed to prioritize businesses owned by those affected by past cannabis laws. In the wake of previous legal disputes and an ongoing illicit marijuana market, Governor Kathy Hochul has referred to the state’s efforts to launch adult-use sales as a “disaster.”

The plaintiffs claimed this waiver created an uneven playing field, potentially jeopardizing their applications that adhered to the real estate requirements. Judge Graf agreed, emphasizing that allowing CAURD applicants to designate their locations later creates inequities and could render the claims of other applicants invalid. As a result of this ruling, the OCM is now prohibited from processing CAURD applications that did not submit proof of a secured location by November 17, 2023, as well as any other pending provisional applications.

CHEF FOR HIGHER USING HIS INFUSED HONEY / BK EXOTIC (LICENSED CAURD DISPENSARY)

Ironically, the majority leader of the New York State Assembly has recently been advocating for extending financial relief to CAURD operators. These operators are struggling with burdensome, high-cost loans from a social equity fund established as part of the state's marijuana legalization framework. The social equity fund was operated by New York City-based cannabis equity firm Tuatara Capital, which administers three-year loans of up to $100,000 at 9.5% interest for each eligible Conditional Adult-Use Retail Dispensary (CAURD) license holder in the city.

In November 2022, the first batch of cannabis operating licenses was awarded to individuals with ties to marijuana-related offenses. Many hopeful entrepreneurs are now overwhelmed by debt due to inflated buildout costs for their storefronts. This financial strain has become difficult for operators like Roland Conner, owner of Smacked Village, who opened the first dispensary under the fund.

Despite OCM's declared commitment to building an equitable and socially just industry, these injunctions consistently hinder the very individuals they intend to support. Applicants should closely monitor any developments in the lawsuit and, if necessary, talk with an industry professional to understand your options and to develop a strategy.

Damian Nicholas

Editor-in-Chief, Frasspot

Damian Nicholas is editor-in-chief for Frasspot. He manage all content, production, and consumer experiences across all platforms. He has contributed as editor-in-chief since December 2019.

Jan 24, 2025

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