Wasn’t decriminalization supposed to keep marijuana outside of the courtroom? It would seem New York State’s equity-intentioned cannabis industry keeps hitting snag after legal snag, but at least there’s been some progress this year.
According to the Office of Cannabis Management (OCM), New York now has 62 “licensed adult-use cannabis retailers” but only 14 majority Black-owned dispensaries.
The state’s legal cannabis shops are a mixture of Conditional Adult Use Retail Dispensary (CAURD) carriers, or those previously convicted of a marijuana-related offense, with brick-and-mortar locations, delivery services, and adult-use dispensaries co-located with existing medical dispensaries, said OCM.
The state was slapped with the first of many a lawsuit in March 2023 by a coalition of medical cannabis companies. A separate lawsuit filed by four service-disabled veterans was later filed in August 2023. In December 2023, the state rejected a CAURD application for the Michigan-based company Variscite. The company filed a lawsuit claiming that the state violated the Dormant Commerce Clause, which prohibits laws that discriminate against or burden interstate commerce. The state managed to reach a settlement agreement with the two former groups, but the battle with Variscite continued.
“We launched the CAURD program squarely focused on realizing the commitment made by the [Marihuana Regulation and Taxation Act] MRTA—that those most impacted by prohibition would have a meaningful opportunity to participate in New York’s cannabis market,” said OCM Executive Director Chris Alexander in a statement. “We are one step closer to resolving litigation brought forth by equity entrepreneurs and our medical operators who felt that they were being left behind. Now that we have opened up licensing to all equity entrepreneurs and provided a clear pathway to participation in the adult-use market for our medical operators, we are able to continue to move this program forward together.”
The Variscite v. New York case played out in the U.S. District Court for the Northern District of New York. This February, a federal judge denied Variscite’s efforts to stop issuance of retail cannabis licenses to Black and brown justice-involved individuals.
“I am pleased with today’s court decision rejecting attempts to prevent New York from having an equitable cannabis industry,” said Attorney General Letitia James in a statement after the decision. “This is an important victory in our efforts to ensure that disproportionately impacted communities are given their fair share in the legal cannabis industry.”
However, there’s seemingly more legal trouble ahead for OCM. In January of this year, the Valencia AG v. NYS OCM et al. lawsuit went to great lengths to allege that the state violated the Equal Protection Clause because OCM leadership board does not include “white men.” There’s also the Friendly Flower v. New York case filed at the tail end of last month in Albany that alleges the state “arbitrarily” created an applications process queue line without proper policies in place.
Kelly Hilland, an experienced entrepreneur and 38-year service-disabled veteran, and her son, Michael, are the latest to open a minority- and/or women-owned business enterprise (M/WBE) dispensary. It’s called Brownies and is in Colonie, NY.
“It’s so beautiful to be here, celebrating Black History Month while celebrating Kelly Hilland’s leadership in establishing Brownies as the 14th majority Black-owned dispensary in our state,” said Alexander at the Hillands’ grand opening on February 6. “This is a milestone that underscores the importance of inclusivity and represents a significant step forward in our mission to ensure that all communities, especially those historically marginalized, have opportunities to participate and thrive in the cannabis industry.”
“I think that OCM has done a great job in everything that they’ve done,” said Michael Hilland to the Amsterdam News.
In the meantime, the slow rollout of the state’s cannabis industry has unfortunately left a lane wide open for thousands of illegal shops to take root throughout the state—an occurrence that electeds statewide have railed against and banded together about to call for more crackdowns from law enforcement.
In her executive budget, Governor Kathy Hochul dedicated efforts to strengthening enforcement authority to speed up closures of unlicensed weed shops and any related illicit activity. Alexander thanked Hochul for her “steadfast commitment” to ridding the cannabis market of “illicit operators.”
In its latest (2023) enforcement report, OCM said there have been inspections at a total of 470 locations, 125 of which have been re-inspected. More than 13,000 pounds of illicit cannabis goods worth more than $63 million have been seized. This year, OCM and the Department of Taxation and Finance (DTF) have vowed to continue inspections weekly as well as dole out hefty fines and “ultimately padlock businesses found to be in repeated violation.”
Unlicensed dispensaries also pose public safety concerns—they’re often targeted for robberies because many are limited to only accepting cash.
Does the uptick in enforcement against illegal smoke shops in the wake of cannabis legalization undermine decriminalization efforts? Alex Vitale, the author of “The End of Policing,” says it depends.
“Within the statute, you have decriminalization of personal use and possession, and the decriminalization of growing a certain amount at home for personal use,” said Vitale. “The licensing means there are regulations around sale[s]. But the penalty for violating those regulations is not generally a criminal matter…so in the end, the distinction is whether or not anyone is getting arrested and put in jail. And in New York, while businesses are being fined or shut down or threatened, people are not being rounded up and put into prison.”
Last month, Queens Assemblymember Jenifer Rajkumar introduced a bill allowing municipalities to close down illegal smoke shops and seize contraband without going through the state.
“It is time to immediately close all 36,000 illegal smoke shops across our state, including the 1,500 illegal smoke shops fueling crime in New York City,” she said in a statement.
Vitale believes the illegal market will decline as licenses become more available and accessible to local retailers. Expect decreases in illegal smoke shops as barriers of entry decline, said the Brooklyn College professor.
“When you have a legalization regime, like we have—if you make the legalization process too difficult, too expensive, and too restrictive, you risk defeating the purpose, which is to reduce the power of the black market,” said Vitale. “The solution for New York is to get more licenses in the hands of people.”
Ariama C. Long and Tandy Lau are Report for America corps members who write about politics and public safety for the Amsterdam News. Your donation to match our RFA grant helps keep them writing stories like this one; please consider making a tax-deductible gift of any amount today by visiting https://bit.ly/amnews1.