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Veterans vs. Equity: The Legal Battle Shaking Up New York's Cannabis Industry

**New York Cannabis Social Equity Program Faces Legal Challenge**

In a recent legal twist, the future of New York’s cannabis social equity program hangs in the balance. Four disabled military veterans have filed a lawsuit against the New York State Cannabis Control Board and Office of Cannabis Management, claiming the current licensing process unfairly discriminates against them. In response, a judge has issued a temporary order halting the issuance of any further dispensary licenses under the program.

**A Brief Overview of New York's Cannabis Legalization and Social Equity Program**

Back in March 2021, New York legalized cannabis through the Marijuana Regulation and Taxation Act (MRTA). Advocates for cannabis justice, along with allies in state government, sought to rectify the damage of cannabis prohibition. To achieve this, the law includes "social equity" provisions aimed at giving priority and support to people from communities disproportionately affected by cannabis criminalization and other marginalized groups.

In 2022, the state launched its "conditional adult-use retail dispensary" (CAURD) licenses, which were reserved for people with a history of marijuana arrests or jail time, and who were New York residents at the time of arrest. Additionally, they must have at least 10% ownership in a business that has been profitable for at least two years.

**Lawsuit Details**

The four plaintiffs—Carmine Fiore, William Norgard, Steve Mejia, and Dominic Spaccio—filed their suit on August 2, alleging that the CAURD licensing process "improperly limited eligibility" and "indefinitely postponed the licensing of hundreds of additional dispensaries." All four plaintiffs are service-disabled veterans, a group explicitly mentioned in New York's cannabis equity plans but not included in the current licensing round.

In support of their case, the plaintiffs cite MRTA provisions that prioritize applications from communities disproportionately affected by cannabis prohibition or those who qualify as minority or women-owned businesses, distressed farmers, or service-disabled veterans.

**Implications and Reactions**

David C. Holland, a New York-based marijuana law attorney, commented on the lawsuit. According to him, the plaintiffs argue that they should get priority as social equity applicants under the MRTA. In contrast, the state asserts that it has the discretion to address inequalities in structuring the licensing process.

Wei Hu, an attorney representing 11 business owners awarded conditional dispensary licenses, is asking for "emergency intervention." Hu argues that nothing in the state law requires all equity licenses to be issued simultaneously. His clients have already incurred significant costs and are directly affected by the lawsuit. In his view, the public interest is best served by more dispensaries and a swift rollout, as a delay would undermine confidence in the market and push people to unlicensed stores.

Emily Ramos Rodriguez, co-founder of ¡High Mi Madre!, voiced concerns about the injunction's impact on those harmed by the drug war. She stressed that the CAURD program is currently the only initiative for those directly affected by the War on Drugs to obtain a license and make reparations.

This lawsuit isn't the first against New York's cannabis equity program. In 2022, Kenneth Gay, principal of Variscite Inc, sued the state in federal court, claiming he was unfairly excluded due to his Michigan residency. The lawsuit was ultimately settled in May, with Gay receiving a guarantee for a general (non-equity) adult-use dispensary license. Holland worries about the precedent this decision sets and the potential for more lawsuits in the future.


While it remains to be seen how the court will rule, this lawsuit highlights the complexities and challenges involved in designing a fair and inclusive cannabis equity program. Amid ongoing legal battles, the importance of crafting an equitable licensing process that addresses the diverse needs of those disproportionately affected by cannabis prohibition cannot be overstated.

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