New York cannabis license program put on hold after disabled veterans sue

The fledgling New York recreational weed industry has hit another hurdle. 

State regulators can't issue more retail licenses or take steps to approve the setups of provisional licensees until at least Friday under an order from Judge Kevin Bryant of the State Supreme Court in Albany. Bryant signed a temporary restraining order Monday in a case brought by four disabled military veterans who argued the state didn't properly prioritize them while issuing the first batch of dispensary licenses.

The order doesn't impact dispensaries already permitted to open, including Strain Stars in East Farmingdale, according to Sean McGowan, partner at Kaufman McGowan PLLC, a Hauppauge law firm that focuses on cannabis transactions and clients. 

The New York State Office of Cannabis Management, which oversees the marijuana and hemp industries, is adhering to the court order, press officer Trivette Knowles said.

"We are actively communicating with [conditional adult-use retail dispensary] applicants and provisionally approved licensees to inform them of the impact of the Court's order on OCM operations," Knowles said in a statement.

The bill that legalized recreational pot in New York set the goal of issuing half of all licenses to social and economic equity applicants, including people from communities with high marijuana arrest rates, minority and women-owned businesses, distressed farmers and veterans disabled while in service.

In a court case filed Aug. 3, Levittown resident Carmine Fiore and three other service-disabled veterans argue regulators circumvented the framework laid out in the law by launching a "conditional" or temporary licensing program.

The conditional retail license targets a specific demographic: New Yorkers convicted of — or related to someone convicted of — cannabis offenses, who also owned a business that turned a profit for at least two years. Regulators said they wanted to help people most directly impacted by the past prohibition of pot get established before opening up applications to others. At that point, the state would prioritize the broader pool of social and economic equity candidates. 

"It feels like we [veterans] were used to get a law passed — a good law, one that helps a lot of people, as well as the state," Fiore said in a press release plaintiffs sent out last week. "Then, once it was passed, we were cast aside for another agenda." 

Regulators have handed out more than 460 conditional retail licenses, including 63 to firms authorized to open on the Island. The state plans to start accepting retail applications from other businesses around October. 

Once firms get a provisional license from regulators, they can secure space in their assigned region. Storefronts must be inspected and approved by the state before final authorization is granted.

Strain Stars is the only dispensary on Long Island that has reached that stage. Most entrepreneurs licensed to open in the region haven't been able to find storefronts because many parts of the Island forbid dispensaries and others have relatively strict zoning regulations. 

Fiore's case is scheduled to continue on Friday, at which point the state will have the chance to argue against the court-ordered pause. 

If the judge extends the restraining order, it "will be problematic for a lot of [conditional adult-use retail dispensary] licensees already struggling to get open and become operational," McGowan said.  

Update: This story was updated on Aug. 8 to include a statement from a state Office of Cannabis Management press officer. 

By Sarina Trangle

sarina.trangle@newsday.comSarinaTrangle

Sarina Trangle covers affordability and cost of living issues and other business topics. She previously worked as an editor and reporter at amNewYork.