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A federal judge on Friday blocked efforts to halt marijuana licensing in New York, while Gov. Kathy Hochul recently criticized the launch of the state’s legal cannabis market as a “disaster.”
Northern District of New York Judge Anne Nardacci, appointed by President Biden, rejected arguments from a pair of businessmen who argued in a lawsuit that New York’s licensing rules unfairly discriminate against out-of-state residents in violation of the Constitution of the United States. 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 laws that unduly burden interstate commerce.
The judge cited how thousands of cannabis entrepreneurs have made significant investments trying to obtain business licenses in New York, meaning more harm would be done if the rollout of the adult-use market in the state were stifled.
“The balance of the actions is tilted in favor of the defendants,” Nardacci wrote. “Defendants have laid out the significant harm that plaintiffs’ requested injunction would cause to the adult-use cannabis industry in New York.”
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The Marijuana Tax and Regulation Act, signed into law on March 31, 2021, legalized adult-use cannabis, or recreational marijuana, in New York State, for people 21 years of age or older, and also pushed for elimination or elimination of nearly 400,000 cannabis-related arrests and convictions.
Although the state’s cannabis market does not require New York residency, license applicants may be given “additional priority” if they have a prior cannabis conviction in New York State or meet other criteria. In the case before Nardacci, the plaintiffs said the provision demonstrates an unfair advantage to New York residents.
In New York, thousands of illegal marijuana shops operate without licenses, 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 rollout of the state’s legal cannabis market.
“It’s a disaster,” said Hochul, who inherited the state’s marijuana legalization law when he took office from Gov. Andrew Cuomo in August 2021. “I’m not going to defend that for a second.”
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“You have to go back to the beginning. Before my time, legislation was written in a way that was not set up to succeed,” Hochul said, describing the law as having “no teeth.”
Last week, the governor said she expected the Office of Cannabis Management’s Cannabis Control Board to review 400 retailer and grower licenses.
However, in the end the board was only willing to approve just three new retail establishments. The slow pace has resulted in unlicensed sellers selling marijuana freely and openly, without paying taxes to the state and without fear of consequences, according to The Buffalo News.
“It’s not (on) every corner,” Hochul said of unauthorized marijuana sales in New York City. “It’s the same as any other storefront. It’s crazy.”
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