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New legal challenge threatens to delay opening of NY cannabis stores

New York’s budding cannabis industry is facing a fresh legal hurdle that could stall the opening of new dispensaries. Two companies, Variscite New York Four LLC and Variscite New York Five LLC, have filed a lawsuit in the U.S. District Court in New York’s Northern District against the state’s Office of Cannabis Management and its Cannabis Control Board. The filing coincides with the closure of the first application window for adult-use retail licenses.


The lawsuit alleges that New York’s method of issuing cannabis licenses is unconstitutional, claiming it unfairly favors state residents and violates the federal Dormant Commerce Clause. This clause is meant to prevent states from discriminating against business from other states. The plaintiffs, who are seeking to operate dispensaries in New York, argue that their applications should be given “extra priority” status. They contend that despite not being New York residents, they meet all other criteria, including owning a retail location in the state.

This latest legal battle comes just months after a previous lawsuit was settled, which had already delayed the issuance of licenses. The ongoing legal challenges are causing significant problems for New York farmers, who have grown cannabis for these legal dispensaries but are now stuck with unsold products.

The next court date for this case is scheduled for March 18, three months after the lawsuit was filed, leaving the state’s cannabis industry in a state of uncertainty.