On December 12, 2024, the New York Supreme Court in Albany County granted an Article 78 petition seeking a preliminary injunction in the case of Organic Blooms, LLC, et al. v. New York State Cannabis Control Board and Office of Cannabis Management. This case addresses key issues in the State’s cannabis licensing program and has significant implications for the industry and regulatory practices in New York.
The dispute centered on the Conditional Adult Use Retail Dispensary (“CAURD”) program, which allowed “justice-involved individuals” to bypass statutory prerequisites, such as securing a location and providing municipal notice, before applying for a license. In late 2023, the State opened two general application rounds. The first, in November 2023, required applicants to meet all statutory requirements, including securing viable locations and notifying municipalities. The second, in December 2023, allowed provisional applications without full compliance.
Petitioners argued that the CAURD program and the December 2023 provisional application process violated the Marihuana Regulation and Taxation Act (“MRTA”), disadvantaging compliant applicants who adhered to statutory mandates. Petitioners contended that the “two-step” provisional licensing process delayed review of their applications and risked forfeiture of location protections due to proximity restrictions, as CAURD applicants were allowed to designate locations post-approval potentially rendering earlier applicants’ locations too close to subsequent, provisional applicants.
The Court granted the preliminary injunction, finding that Petitioners showed a likelihood of success on the merits and irreparable harm. The injunction halted the Office of Cannabis Management (“OCM”) from processing CAURD applications lacking proof of a secured location with municipal notice by November 17, 2023, as well as provisional applications filed during the December 2023 window. This decision ensures that applicants who complied with statutory requirements, particularly during the November 2023 window, can proceed without interference from provisionally approved CAURD licensees or provisional applicants who applied during the December 2023 round.
This decision negatively impacts CAURD licensees who failed to secure municipally approved locations by November 17, 2023, and those relying on provisional applications from the December 2023 round, enjoining the OCM from reviewing provisionally approved CAURD licensee and provisional applications filed during the December 2023 window pending the outcome of the case.
This decision underscores the necessity for regulatory bodies to adhere strictly to statutory requirements, even when pursuing equity goals. It also highlights the challenges businesses face in navigating a newly regulated market and the OCM’s ever-changing regulatory scheme. While protecting compliant applicants, the decision may delay the operations of those relying on provisional licenses. Stakeholders in New York’s cannabis industry should monitor this case closely as it progresses. The Court’s final determination could shape the future of cannabis licensing and regulation in the State.
Mandelbaum Barrett PC’s Cannabis, Hemp & Psychedelics attorneys stand at the forefront of a dynamic and ever-evolving legal landscape. We possess a detailed understanding of laws associated with the production, sale, use, and regulation of a broad range of controlled substances — from cannabis and hemp to psychedelics.
Disclaimer:
The information provided in this post is for general informational purposes only and does not constitute legal advice. While we strive to ensure the accuracy and timeliness of the content, laws and regulations frequently change, and the information may not reflect the most recent developments. If you require legal advice or assistance, please contact Joshua Bauchner or Natalie Diaz.