Variscite Lawsuit Backstory and General Update:
Backstory: This one’s important so first a bit of background to bring everyone up to speed: The Variscite case revolves around a Michigan company, Variscite NY One, filing a lawsuit 11/10/22 against New York, claiming that the state’s Conditional Adult-Use Retail Dispensary (CAURD) license requirements discriminate against out-of-state cannabis operators. This is argued to be in violation of the Dormant Commerce Clause which prohibits states from passing legislation that discriminates against or excessively burdens interstate commerce (despite cannabis not being federally legal and interstate commerce not being open to cannabis). U.S. District Judge Gary Sharpe saw merit in Variscite’s position and issued an injunction that prevented the OCM from issuing CAURD licenses in five of the 14 regions where the agency is licensing CAURD dispensaries. The injunction applies to applicants in the Finger Lakes, Central New York, Western New York, Mid-Hudson, and Brooklyn.
Where we’re at now: The case has caused uncertainty, raised questions about the validity of state-based cannabis programs in general, and could potentially impact cannabis legalization statutes in other states. The expectation is that the case will go to trial. Courts in different districts have disagreed on the constitutionality of the matter, indicating that it may eventually reach the Supreme Court.
A New Lawsuit Against NY Cannabis Regulators
Mar 16, 2023
Brief Summary: The “Coalition for Access to Regulated & Safe Cannabis” filed a lawsuit against state regulators, seeking the immediate opening of licensing for all retail dispensary applicants. The lawsuit alleges unconstitutional overreach, abdication of duties, and actions endangering New Yorkers’ health and safety. The coalition further accuses the OCM and CCB of over-promising resources and failing to deliver on social and economic equity plans. The coalition demands a declaration that the Conditional Adult-Use Retail Dispensary license is unconstitutional and urges regulators to pursue civil injunctions against unauthorized cannabis stores.
New York Nixes Line Testing
Mar 10, 2023
Brief Summary: NY Cannabis Insider revealed significant discrepancies between advertised and actual THC content in the majority of the eight highest-potency strains of legal recreational cannabis in New York State. This change affects all cannabis growers, processors, and consumers in the state. The discrepancies were primarily due to the government practice of line testing, which advertised “anticipated potency” without measuring actual potency. Within 24 hours of the story, the Office of Cannabis Management ended its line testing program for flower and pre-rolls and is now establishing a reference lab for retesting, monitoring, and compliance to ensure product accuracy and consumer protection.
Failure of NY’s Society Equity Cannabis Investment Fund
Mar 09, 2023
Brief Summary: Despite eight months of effort, the Dormitory Authority of the State of New York (DASNY) has failed to raise any money for the Social Equity Cannabis Investment Fund, a critical component of the state’s legal marijuana market rollout. The fund was meant to raise $150 million from private investors to combine with $50 million pledged by the state, creating a $200 million budget for the Conditional Adult-Use Retail Dispensary (CAURD) program. The fund has only managed to get two “temporary pop-up” dispensaries up and running, including one that just opened in Ithaca on 3/16/23.
Expansion of CAURD Program
Mar 02, 2023
Brief Summary: New York’s cannabis regulators expanded the number of first-round Conditional Adult-Use Retail Dispensary (CAURD) licenses from 150 to 300, eliciting mixed reactions. The New York CAURD Coalition, a group of current and hopeful retail licensees, welcomed the decision while others argue that the expansion jeopardizes the prospects of many non-CAURD applicants (including social equity applicants) as municipal zoning and setback restrictions in opt-in communities will leave fewer to no locations left to set up shop by the time their turn comes around.
Cannabis Control Board Adopts Adult-use Packaging, Labeling, Marketing and Advertising Regulations, including a Ban on Cannabis Billboards
Mar 02, 2023
Brief Summary: New York’s Cannabis Control Board approved the Office of Cannabis Management’s regulations on advertising and marketing, which includes a ban on cannabis billboards. The move is criticized by some industry advocates who argue that it’s unfair to prohibit weed companies from using the same marketing techniques as other legal sectors, ala alcohol.