Cannabis board OKs settlement of lawsuit that had delayed rollout of stores

ALBANY — New York’s marijuana regulators approved a settlement Monday that could speed up the opening of stores that had been in limbo because of a lawsuit.

The Cannabis Control Board, in a five-minute proceeding, voted 5-0 to approve an agreement that could end a lawsuit that challenged the legality of the state’s plan to give first dibs on sales licenses to those with past marijuana convictions.

The lawsuit triggered an August injunction that blocked the state from awarding any more sales licenses or approving any more store openings.

Board chairman Tremaine Wright said the panel couldn’t discuss settlement details until the agreement is approved by a judge. But if and when it happens, she said “some 436 licensees who have seen their business rollouts come to a dead stop” will be able to move forward.

In a statement after the meeting, Wright called the action a “momentous step.”

“Once this settlement is approved, we are hopeful those impacted by the injunction will be empowered to open their storefronts and embark on their entrepreneurial journeys, bringing us closer to our goals,” Wright said.

At issue was a set of regulations from the board and the Office of Cannabis Management that gave preferential treatment to those with a marijuana-related conviction for the first round of licenses issued.

A group of disabled veterans sued, saying the regulations essentially didn’t follow the letter of the law in New York’s Marijuana Regulation and Taxation Act, which was adopted in 2021.

The group contended the law, as written, should have allowed them to be in the first round of applications, but the regulations adopted by the board made it a requirement for them to be partnered with someone who had a marijuana conviction.

In August, a state judge agreed and issued an injunction that halted the processing of licensing and dispensary approvals. That’s just one of the reasons New York has opened fewer than 30 dispensaries now instead of hundreds, as leaders projected.

Meanwhile, farmers have hundreds of thousands of pounds of cannabis sitting in storage potentially going bad and thousands of illegal pot shops have been operating around the state, witnesses told lawmakers at a hearing last month.

In response, state regulators have sought to settle the lawsuit while also opening up a new “general” application window — as opposed to preferred — to grow, process, distribute or sell marijuana and expects soon to issue another 1,000 licenses.

One key senator said Monday the lawsuit settlement could help “jump-start” the state’s slow rollout of legal marijuana sales.

“I’m pleased this legal challenge is behind us and we can focus on the future of the cannabis industry in New York,” Sen. Jeremy Cooney (D-Rochester), chairman of the Senate Subcommittee on Cannabis, said in a statement. “My priority is to jump-start the legal retail market to ensure safe and legal cannabis across the state.”

By Yancey Roy

yancey.roy@newsday.com@yanceyroy