New York’s struggling adult-use cannabis sector has suffered yet another setback as a Federal judge ruled this week that the licensing procedures are unconstitutional. The ruling comes only days after a state regulator acknowledged a major oversight which threatened dozens of licensed users.
The US Court of Appeals of the Second Circuit ruled on Tuesday (12 August) that New York’s state policy of prioritizing applicants who have cannabis-related convictions violated the dormant Commerce Clause which prohibits states from enacting protective measures.
Despite the fact that many states have taken similar steps, interstate cannabis trade remains illegal at federal level. New York’s Conditional Adult Use Retail Dispensary scheme (CAURD), introduced in 2022 to help those disproportionately affected by cannabis prohibition and as part of a drive for social equity, is now under federal scrutiny.
Variscite New York LLC Four and Variscite New York LLC Five applied for licences for dispensaries by December 2023. However, they were not eligible for the priority status due to their cannabis convictions occurring in California instead of New York.
In the beginning, a lower court rejected their claim. They agreed with the arguments of the State that due to interstate restrictions on cannabis the Commerce Clause was dormant.
Yet, the appeals court reversed that ruling, concluding that ‘Congress has given New York no clear permission to favour its residents’ and that the state’s policy amounted to economic protectionism.
The majority (2-1) judge Dennis Jacobs wrote: “A prohibition meant to eliminate an interstate product market does not give states permission to create intrastate markets for that same product.”
Damien Cornwell is the President of the Cannabis Association of New York, which represents operators and licensees across the supply chain in the state. He said of this ruling, “New York State’s cannabis industry was founded on the belief that it would help to bring justice to those individuals and communities who have been harmed due to overpolicing of prohibition. This decision of the federal appeals courts undermines our abilities to do so.”
The New York Cannabis Industry must be put on a sustainable path for success, while maintaining its leadership in the country with an equity-first approach.
This comes at a time when New York cannabis businesses and regulators are already facing a difficult situation. Last month, it was revealed that the Office of Cannabis Management in New York could be forced to move over 100 licensed businesses due to blunder.
In what has been described as a ‘catastrophic failure of governance’, the OCM announced in late July that for over two years, it has been approving cannabis store locations based on the wrong zoning rule.
OCM, according to their statement, has used a similar door-to–door measure to regulate liquor stores to determine whether dispensaries have been too close.
New York cannabis law states that dispensaries are required to be 500 feet or more away from the entire school property, and not just its front entrance.
New York’s struggling adult-use cannabis sector has suffered yet another legal blow this week. A Federal court has ruled the licensing procedures unconstitutional. The ruling comes only days after a state regulator acknowledged a serious oversight which threatened hundreds of licensees.
The US Court of Appeals of the Second Circuit ruled on Tuesday (12 August) that New York’s state policy of prioritizing applicants who have cannabis-related convictions violated the dormant Commerce Clause which prohibits states from implementing protectionist measures.
Despite the fact that many states have taken similar steps, interstate cannabis trade remains illegal at federal level. New York’s Conditional Adult Use Retail Dispensary scheme (CAURD), introduced in 2022 to help those disproportionately affected by cannabis prohibition and as part of a drive for social equity, is now under federal scrutiny.
Variscite New York LLC Four and Variscite New York LLC Five applied for licences for dispensaries by December 2023. However, they were not eligible for the priority status due to their cannabis convictions occurring in California instead of New York.
In the beginning, a lower court rejected their claim. They agreed with the arguments of the State that due to interstate restrictions on cannabis the Commerce Clause was dormant.
Yet, the appeals court reversed that ruling, concluding that ‘Congress has given New York no clear permission to favour its residents’ and that the state’s policy amounted to economic protectionism.
Dennis Jacobs (writing for the majority, 2-1) said that a prohibition meant to end an interstate marketplace is not a license for states to develop intrastate markets on the same product.
Damien Cornwell is the President of the Cannabis Association of New York, which represents operators and licensees across the supply chain in the state. He said of this ruling, “New York State’s cannabis industry was founded on the belief that it would help to bring justice to those individuals and communities who have been harmed due to overpolicing of prohibition. This decision of the federal appeals courts undermines our abilities to do so.”
The New York Cannabis Industry must be put on a sustainable path for success, while maintaining its leadership in the country with an equity-first approach.
This comes at a time when New York cannabis businesses and regulators are already facing a difficult situation. Last month, it was revealed that the Office of Cannabis Management in New York could be forced to move over 100 licensed businesses due to blunder.
In what has been described as a ‘catastrophic failure of governance’, the OCM announced in late July that for over two years, it has been approving cannabis store locations based on the wrong zoning rule.
OCM, according to their statement, has used a similar door-to–door measure to regulate liquor stores to determine whether dispensaries have been too close.
New York cannabis law states that dispensaries are required to be 500 feet or more away from the entire school property, and not just its front entrance.
Cannabis Law Resources in Poland
Browse essential legal pages on cannabis sales and cultivation in Poland. You can use these resources to learn about the requirements for certification, permissions and compliance.
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Polish News Registration and Interests of Cannabis Businesses
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Permissions for Cannabis Sales in Poland
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Authorization for Importing or Manufacturing Medical Products
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Permission for Manufacturing or Importing Medical Products
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Certificate of Good Manufacturing Practices (GMP)
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Registration of Medical Products in Poland